Derivatives top agenda for ASX chief (from efinancialnews.com)


http://www.efinancialnews.com/story/2013-08-22/asx-results-june-2013?omref=email_TopStories

Derivatives top agenda for ASX chief

Michelle Price in Hong Kong

22 Aug 2013

The chief executive of the Australian Securities Exchange has said the company will focus on expanding its derivatives business over the next 12 months, as regulatory efforts to overhaul the global swaps market gather pace in Asia Pacific.

Derivatives top agenda for ASX chief

During the exchange’s annual results presentation this morning, ASX managing director and chief executive Elmer Funke Kupper said derivatives is “the business where the vast majority of our energy is going in 2014”. The exchange is looking to exploit new rules that will see over-the-counter trades pushed onto exchanges and through clearing houses.

Funke Kupper added: “In 2014 we will be focusing on the implications of the international regulations…International regulations create new business opportunities and they affect our clients as regulators demand that some products that are presently traded OTC are cleared. We are investing in new services that we are bringing to market to help our clients.”

His comments came as the ASX reported net profits of A$348 million ($313 million) for the 12 months to June 30, up 3% on the year-ago period. Revenues came in at A$617 million, up 1.1% on the preceding period.

The first six months of the year acted as a drag on ASX’s full-year performance as subdued trading activity and increased competition in the cash equities market resulted in lower fees from trading and information services. Revenues across both businesses fell 8% for the 12 months to June 30 on the year-ago period.

 

These declines were offset by a strong performance in ASX’s listings, technical services, and the derivatives franchises, revenues for which grew 5%, 10% and 5% respectively in the 12 months to the end of June, compared with the previous year.

The ASX is one of several bourses in the Asia-Pacific region ̶ including the Japan Exchange Group and the Singapore Exchange ̶ making a play for the region’s $42.6 trillion OTC derivatives market. The company has been building out its OTC clearing house and in July it completed a A$553 million capital-raise that will bring ASX Clear in line with international standards on capital levels at OTC clearing houses.

Funke Kupper described the capital raise as the “most important” development for ASX during the past 12 months and added that the ASX’s new interest rate swap clearing service would begin to clear its first interdealer swaps in coming weeks. The launch of client clearing will take place during the latter half of the year.

The exchange expanded its listed futures business with the launch of new electricity futures contracts in May and is set to launch new volatility futures contracts based on the VIX index, also known as the “fear” index, in October. It is also expanding into collateral services to help meet growing client demand for liquid assets.

 

–write to michelle.price@dowjones.com and follow on Twitter @michelleprice36

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About carlarweir
I am a Cross Asset FIX Connectivity SME working for international banks. i also sit on the FIX Protocol Ltd Global Steering Committee, and am Co-Chair of the Global Cross Asset Committee. I also have a very strong background in Mobile Telephony, Cloud computing, SaaS, IaaS, PaaS, Big Data, innovation, and am a pioneer in Pseudolite technology.

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