Published On: Mon, Oct 31st, 2011

Chi-X Australia Open For Business

Today, October 31, marked the long awaited first day of business for Chi-X Australia, a subsidiary of Chi-X Global. Early indications have the display alternative processing over 800 trades worth more than A$5 million by the end of close. Trades were realized in all 8 securities (BHP Billiton, CSL, Leighton Holdings, Origin Energy, QBE Insurance, Woolworths the SPDR 200 Fund and the iShares S&P/ASX Small Ordinaries Fund) putting average trade size at around 6,250 shares.

It was reported that all 22 brokers had executed at least one trade in what was characterized as a “Toe in the water” assessment to see that trades could be placed, changed, canceled and executed as promised.

Peter Fowler, the COO of Chi-X Australia was pleased to report that it was an “uneventful day” in the wake of the ASX trading outage last week with the matching engine, vendors are marketing data performing without a hitch. Mr. Fowler confirmed that they plan to go through two full trading cycles before they ramp up the universe of securities Chi-X will cover which will include those comprising the Sydney Price Index and the remaining Exchange Traded Funds (more than 250 names in all).

It won’t be know until Thursday (or T+3) what the first trades were and by whom in compliance with trade reporting of the Market Integrity Rules.

Chi-X Australia is offering a maker taker pricing scheme were passive orders pay 6bps and aggressive order 12bps compared to the flat fee of 15bps at the Australian Securities Exchange. That being said the A$5 million they executed today would have netted them A$9000 in fees (more than the brokers would have earned).

It seems that exchange competition has finally arrived in Australia not so much as a bang but neither a whimper too.

What do you think will be the end result? We are running an Opinion Poll that asks “What Market Share Will Chi-X Australia Capture in The First 2 Months?VOTE

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