Regulator clears ASX, Singapore stock exchange merger

Australia's competition regulator the ACCC has said it would not stand in the way of plans by Singapore Exchange Limited (SGX) to acquire the Australian Stock Exchange (ASX).

The green light is the final hurdle in a bizarre technology integration project that began in 2006, led by executives of a technology vendor with an interest in merging stock exchanges around the world to guarantee the future viability of its systems.

That vendor is NASDAQ OMX – owner of the US technology stock index NASDAQ and seven further stock exchanges in Europe and technology supplier to many more.

Experiencing phenomenal growth in the past few years, NASDAQ OMX has successfully acquired and merged multiple stock exchanges around the globe - particularly in Europe and the United States.

But in Asia Pacific, the company has so far been content to license out its electronic trading platform to stock exchanges. The global stock exchange business has essentially become a game of scale - and the consolidation of technology platforms and staff has been the primary means of achieving it.

NASDAQ OMX sold its first electronic trading software to the ASX in 2006 [PDF], which replaced the Australian Stock Exchange's in-house developed SEATS trading platform.

The architect of this transformation – ASX group IT manager Bob Caisley, then resigned to join Singapore Exchange Limited in January 2008.

In July of this year, Caisley was quoted in a profile for Financial Services Technology Media discussing the introduction of this same NASDAQ OMX technology at the SGX for the exchange's "fast trading platform".

Meanwhile, Nasdaq OMX president Magnus Bocker stepped down from his position in July 2009 to become the chief executive of the Singapore Stock Exchange.

Bocker was credited as having "played an integral role in the successful merger of NASDAQ OMX" and has since - via the attempt to takeover the ASX - looked to do the same in the Asia Pacific.

NASDAQ OMX also acquired Sydney-based trading surveillance vendor SMARTS in July of this year.

NASDAQ OMX has sold the ASX a major upgrade of its trading platform, which is due to go live in mid-2011 [PDF].

A spokesman for the ASX told iTnews it was "very premature" to comment on the merger proposal, which "even the most optimistic" prediction would not go ahead until roughly the same time - June 2011.

Nate Cochrane and John Hilvert contributed to this story.