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ASX should follow law firm lead

ASX should follow law firm lead

International partnerships of lawyers reflect the forward thinking that was absent in the failed merger of the ASX and SGX, according to the Chair of ASX Compliance.In a speech to the Corporate…

International partnerships of lawyers reflect the forward thinking that was absent in the failed merger of the ASX and SGX, according to the Chair of ASX Compliance.

In a speech to the Corporate Law Conference held on Tuesday (23 August) in the NSW Supreme Court to discuss "New Trends in Sharemarket Regulation", Alan Cameron said he found it "irresistible" not to focus on "the lessons of the failed merger" between the Australian stock exchange (ASX) and Singapore Stock Exchange (SGX).

Cameron likened the ASX merger debate to regulatory issues that seemed to make it "too difficult" 30 years ago to run interstate alliances of law firms, but which were now a non issue.

"It was only 30 years ago... the idea that a Sydney firm and Melbourne firm would align was regarded as very radical and now we are contemplating international law firms operating all over the world," said Cameron.

"There is a risk that the attitudes have been taken toward exchange mergers are a bit in the past and don't reflect what is happening."

A 'take over' of the ASX, Cameron said, remained "extremely difficult" given it required ministerial approvals.

"A whole lot of other countries have managed to give up sovereignty over their allegedly national and iconic exchanges, [but] apparently were not yet ready to do that," said Cameron, citing a current list of groups of international exchanges including the NYSE Euronext, Deutsche Börse, London and Tokyo exchanges and Baltic, Nordic and US NASTEC.

Cameron refuted Treasurer Wayne Swan's reasoning in his rejection (on 8 April 2011) of the merger on the basis of "national interest" and said the Treasurer had pandered to an "extraordinary range of hysterical and xenophobic reactions from a wide range of commentators and politicians".

Tendering to the audience as "exhibit A", Cameron showed the minutes of Foreign Investment Review Board (FIRB) discussions on the decision, painting it as a "largely blank" document; it's only material being "trivial and unimportant."

Cameron affirmed ASX head David Gonski's support for the choice of Singapore as a merger partner and said that the SGX system was "complimentary to ours" and that "their regulatory, legal and technological arrangements are at a high standard aligned with our own."

With the speed and scale of market transactions only set to accelerate, Cameron said Australia would benefit from becoming a larger player of more regional relevance with an expanded range of product and services and access to cheaper capital from a deeper pool of liquidity.

Stephanie Quine

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