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ERDesk: ASX Risk of Competition

FMX | Connect – www.fmxconnect.com - (Reported 5/03/2010)

Price Erosion and Market Share Loss after the Entry of ATSs

 

 

 

 

 

 

 

· Exchanges lost ~35% market share in 30 months since the entry of ATSs   

 

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· New entrant fees were a fraction of the incumbents’ exchange at the time of entry

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· Incumbent exchanges were forced to cut trading fees to protect market share – eg, TSX cut its fees by 75% to fend off competition

 

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· NYSE cut fees by half as market share dropped to a third 

 

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· The Australian regulator awarded a license to Chi-X, which could cause ASX’s stock price to fall by 24% if market share declines by 35% and the exchange is forced to cut fees by 50%

 

 

 

Provided By: Equity Research Desk, www.erdesk.com