ASX: publicly listed company and market regulator?

[ghotib]

Not sure if this belongs on this board or on General Chat. There's a long article in today's Sydney Morning Herald about problems within ASX (the company) and with its performance as market regulator and enabler (including a rise in trading failures).

Following is an extract, with the url to the full article below.


The Australian Stock Exchange is an odd beast. As a publicly listed company, it has a duty to maximise the wealth of its shareholders. But it also has a duty as a market regulator - a duty that is enshrined in the Corporations Act and is one of the main conditions imposed by the government-issued licence.

The stock exchange, in turn, is regulated by the Australian Securities and Investments Commission, which has made plain its view in writing that the ASX needs to improve its supervisory role.

When he arrived at the ASX's Bridge Street headquarters in the wake of Richard Humphry, who had delivered a doubling in the stock price, D'Aloisio initiated a no-holds-barred review of the stock exchange and its businesses.

Last week the first public result of the review emerged. There was to be a 10 per cent cut in jobs.

That came as no surprise to staff, who had been leaving for months knowing the cuts were inevitable.

Now there are signs the slashing of staff numbers is beginning to bite. Insiders say trading errors are on the rise, leading at times to an uninformed market.

It is believed AMP has recently had two accidental trading halts, for which the ASX has apologised.

D'Aloisio's review also revealed that he has serious staff morale problems. Hewitt Associates, a global management consultancy, was hired to conduct a survey of ASX staff. The results were not good news for D'Aloisio: they showed staff engagement levels were at 34 per cent, or crisis point.
http://www.smh.com.au/news/Business/The-man-who-put-the-change-back-into-exchange/2005/06/03/1117568376834.html

It's almost enough to make you think corporatisation might not always be a good idea.

Ghoti

[GreatPig]

But then you can't complain too much about their share price over the last couple of years.

I wonder if they ever accidentally put themselves into a trading halt :rolleyes:

GP

[Jikx]

I never understood the ASX as a company.. its like a regulator but its a public company! Can you imagine if the government tried to outsource ACCC? :sly:


Actually better not give them any ideas. They might start charging $0.50 a minute to call them..

[ghotib]

But then you can't complain too much about their share price over the last couple of years.

I wonder if they ever accidentally put themselves into a trading halt :rolleyes:
Yabbut what if their share price is at the expense of investors' confidence in the
fairness (relatively speaking) of the market. Look Mum, no more little capitalists. I wonder which price would tank first - ASX or the rest.

Ghoti (in doomful mood)

[Smurf1976]

In my experience the outsourcing of practically anything which is in any way associated with government, either regulation or actually doing the work, leads to problems. Whoever takes on the work makes $$$ but the quality goes down. The end result is that the customers (in this case everyone in any say asociated with the ASX but in most other cases taxpayers) are worse off than before. Seen it too many times.

:2twocents

[Profitseeker]

It is an absolute joke. surely their position must lead to conflicts of interest?

[TjamesX]

I don't agree with a private company like the ASX being a regulator. However ASIC regulates the ASX (ASX does not regulate itself with regards to its own operation and governance), I think ASIC also has powers over the whole market over and above ASX.

TJ