10 October 2000

ASX Ownership Limits Freed Up

The Minister for Financial Services & Regulation, Joe Hockey, today announced plans to free up the ownership limits on the Australian Stock Exchange.

The ASX will now have a 15 per cent ownership limit. Anyone wanting to buy more than 15 per cent will have to apply to the Minister to seek a variation of the limit. A higher limit may be approved if the acquisition is in the national interest.

Currently the ASX has a 5 per cent limit.

The new rules apply to market operators and clearing and settlement facilities that are of national significance.

"This new policy gives the ASX greater flexibility and lets it get on with the business of operating on the international stage as a competitive world stock exchange," the Minister said.

"Like markets overseas, Australia's share and futures markets are turning into competitive international businesses. ASX need to be able to compete in this international environment without one hand tied behind its back.

"This is part of an ongoing process of fine tuning resolution of commercial and market issues. It shows the Government appreciates the dynamic nature of the exchange and settlement businesses.

"It will place all Australia's markets on an equal regulatory footing. We have imposed a 15 per cent limit because a major exchange like ASX is of national economic significance and I don't think it is desirable for any one party to get control of it without the Government considering whether it is in the national interest," the Minister said.

These changes will be included in the Financial Services Reform Bill.

Other measures in the Bill will allow ASIC to apply a 'fit and proper' person test to controllers and senior managers of Australian financial markets and clearing facilities. ASIC will have to report at least annually to the Minister on the adequacy of their supervision.

The ownership limits will be similar to ones already applying to deposit-taking institutions under the Financial Sector (Shareholding) Act 1998.

The Financial Services Reform Bill is planned for introduction into Parliament by the end of this year.