ASX CEO welcomes competition to listings market

By Scott Murdoch

SYDNEY, Oct 14 (Reuters) - Australian Securities Exchange ASX.AX chief executive Helen Lofthouse said on Tuesday she welcomed competition in the sector but said there were benefits to having one "marketplace" for equities trading, especially in price discovery.

Australian regulators last week approved CBOE Australia [RIC:RIC:CBOE.UL], the local unit of the Chicago-headquartered exchange operator, to list new companies on its boards, ultimately providing direct competition to the ASX as a listing venue.

The ASX has been under regulatory pressure for a number of failures in the past few years, primarily for equity trading settlement delays and slow technology upgrades.

The Reserve Bank of Australia in September criticised the ASX and said it must make "foundational changes" to its governance, culture and risk management after last year's trading settlement failure.

Lofthouse told a Citigroup conference in Sydney on Tuesday, competition to the ASX could prove beneficial if it allowed markets to grow and be more vibrant.

But she warned equity price discovery processes and transparency could be fractured with more than one major exchange operator.

"If you have one marketplace where everyone comes for that price discovery, that is helpful for price transparency or you're looking at settlement system, there are benefits for customers if everyone is using the one settlement system," she said

"That is the core challenge in the financial market infrastructure, space, it's balancing the network benefits from one provider with the competitive benefits you get from multiple providers."