Asx Signs Up For Share Registry Deal
Sydney Morning Herald
Tuesday March 21, 2000
The Australian Stock Exchange has moved into the share registration business through a $50 million joint venture with Perpetual Trustees Australia.
The venture, which gives ASX a 50 per cent stake in Perpetual Registrars due diligence allowing plans to capitalise on Australia's growing share ownership, as well as moving into the international arena.
``By joining with the ASX we will create a substantial knowledge and technical base," Perpetual Trustees Australia managing director Mr Graham Bradley said.
``This will give us the ability to fast-track initiatives in e-commerce, improvements in customer service, new Internet-based information services and the investigation of international markets."
ASX managing director Mr Richard Humphry said: ``The joint venture with Perpetual is in line with our strategy of adding complementary products and services for our customers across the investment spectrum.
``It will also diversify our revenue streams and fit well with Perpetual's plans to expand its registry operations."
Perpetual accounts for about 35 per cent of the Australian sharemarket, with Telstra, Commonwealth Bank and Woolworths among its key corporate clients, and more than 5 million registered shareholdings.
Market observers said the new venture posed a threat to Computershare's dominance of the market, although Mr Stuart Crosby, Computershare's director of strategic business development, was dismissive.
``We're not worried. Computershare is used to existing in a competitive environment.
``We're confident we are the best registry business in the world and are happy with our dominant position," Mr Crosby said.
Computershare, which accounts for 55 per cent of the local share registration market, provides Perpetual Registrars with its back-end processing system. This will be abandoned when the new venture develops its own software.
The new company hopes to implement a one-day settlement period after the execution of a share trade, as opposed to the present three-day period.
To avoid any conflict of interest arising from ASX's role as market regulator, scrutiny of Perpetual's activities will pass to the Australian Securities and Investments Commission. ASIC already supervises the activities of ASX and Computershare.
Neither Perpetual nor the ASX was prepared to discuss the nature of the overseas expansion. However, any move is expected to be in the US, Britain or Canada.
Late last year the ASX revealed that it was handing over control of the sharemarket's indices to US market operator Standard & Poor's.
However, a spokesman for the exchange said there was no ``immediate or direct connection" between the ASX's business relationship with S&P and its Perpetual venture.
ASX shares fell 8.5c to $15.09 yesterday, while Perpetual Trustees climbed 50c to $22. Computershare closed up 13c at $8.10.
© 2000 Sydney Morning Herald