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Stockbrokers and Financial Advisers Conference 2019Delivering new customer opportunities with digital, data and DLT
Dominic Stevens, CEO
22 May 2019
Agenda
DLTCHESS replacement
DataASX DataSphere
Digitalasx.com.au
Open infrastructure solutions - Create new products and services- Improve operational efficiency- Reduce risks and costs
History of delivering industry efficiency and innovation
The evolution of equities clearing and settlement
Share certificates
T+10 T+5
Electronic messaging
T+3Expanded into new products
T+2DLT-based
CHESS
Co-location for low latency connections
The evolution of trading and data services
Data centre services
Cross-connections across industry
Global connectivity Electronic trading
Chalk boards
mFund
ETFs
ALC
Enhancing ASX’s core customer proposition through world-leading innovation
Updated clearing and settlement systemNew functions and optionality for the 2020s and beyond
CHESS replacement
Replace aged COBOL system
Open source software language
Global ISO standard
All existing functionality
Plus 35 new specifications –for the market by the market
Choice of connectivity
Access real-time, synchronised, source-of-truth data
Updated clearing and settlement systemNew functions and optionality for the 2020s and beyond
Customer Development Environment Now open
Design, build and test system changes
Assess new functionality
First of 7 software drops
New functionality every ~8 weeks
Compare access options
Full functionality and industry-wide testing mid-2020
CHESS replacement
Replace aged COBOL system
Open source software language
Global ISO standard
All existing functionality
Plus 35 new specifications –for the market by the market
Choice of connectivity
Access real-time, synchronised, source-of-truth data
Will offer message-based connections
Will replace current functionality and add more
Will not change rules to require new information
Will not increase cost of like-for-like services
Updated clearing and settlement systemNew functions and optionality for the 2020s and beyond
Customer Development Environment Now open
Design, build and test system changes
Assess new functionality
First of 7 software drops
New functionality every ~8 weeks
Compare access options
Full functionality and industry-wide testing mid-2020
CHESS replacement
Replace aged COBOL system
Open source software language
Global ISO standard
All existing functionality
Plus 35 new specifications –for the market by the market
Choice of connectivity
Access real-time, synchronised, source-of-truth data
CHESS replacement
Updated clearing and settlement systemNew functions and optionality for the 2020s and beyond
Customer Development Environment Now open
Option to access real-time, synchronised, permissioned, source-of-truth data
On track for DLT-based go-liveMarch-April 2021
CHESS replacement
Replace aged COBOL system
Open source software language
Global ISO standard
All existing functionality
Plus 35 new specifications –for the market by the market
Choice of connectivity
Access real-time, synchronised, source-of-truth data
Will offer message-based connections
Will replace current functionality and add more
Will not change rules to require new information
Will not increase cost of like-for-like services
CHESS replacement
Delivering contemporary, open infrastructureProvide more value-added products and services to customers
Contemporary technology
Stronger foundations
Improved infrastructure
AI efficiency
New opportunities
8 |
ALC Net upgrade
Secondary Data Centre
ASX DataSphere
Open infrastructure solutions to benefit customers
Industry connectivity
Data analytics
Post-trade infrastructure
Customer challenge ASX solution Customer benefits
Australian Liquidity CentreTier-3 data centreData centre investment
Data management & expense
Competitive services
Community connectivity
ASX DataSphereOpen ecosystem platform
Technology, governance, datasets and analytical tools
Curate and standardise
Big data science capability
Commercialise and distribute
Improved data generatingproduct development
Governed data platform without upfront investment costs
Product distribution
Cost and inefficiency
Multiple reconciliations
Data inaccuracies
Bespoke solutions
DLT Solutions Enterprise-grade technology
infrastructure
Smart contract software
Safe and secure delivery of real-time, synchronised
source-of-truth data
Productivity benefits
New revenue opportunities
Perfect information, and cost and time savings
Efficient workflows
New products and services
Opportunity to unlock value and reduce costsDLT solution
*Rainmaker Consulting May 2017 report for the 2016 year
Cost of ASX fees to settle ALL of the
equities traded in Australia
$22.4bnAustralia’s
superannuation industry fee
revenue*
?Value unlocked by
permissioned, synchronised, real-time, source-of-truth
information?
~$50m
Improving the digital experienceRedesigning and modernising the ASX website
More ways to connect
New data analytics and insights
New pricing and issuer pages
Quality products and trusted advice
New products and services to capture opportunity Meet increasing demand and changing investor appetites
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035
Compulsory
super
introduced
Currently around $2.7tr
growing to $9.4tr in 2035
Source: ABS, Deloitte Actuaries and Consultants
Diversification across asset classes, sectors and geographies
Capital growth and income
Liquidity and transparency
Partnering with local and global fund managers
$b
n
LICs and LITs
Strong growth in ASX investment productsmFund growth continues with 43% increase in FUM over past year
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Mar
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cap
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isat
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, bill
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Nu
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er L
ICs/
LITs
Exchange traded products
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5
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40
90
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190
240
Ap
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cap
ital
isat
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, bill
ion
s
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TPs
mFund
0
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Ap
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ket
cap
ital
isat
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, mill
ion
s
Nu
mb
er m
Fun
ds
$43bmarket cap (FUM)
113Funds
$48bmarket cap (FUM)
243Funds
$899mmarket cap (FUM)
222Funds
Source: ASX Investment Products Monthly Update – Apr 19
Choice through sectoral and geographic diversity ASX’s international listings strategy
56 46 20 17 113
Total Foreign Listings 280+
Source: ASX Data, May 2019
11
New Zealand United States SingaporeIsrael Canada IrelandMalaysia
Expanding and diversified listings franchiseTech listings have provided attractive returns to investors
$9.27bn
$3.93bn
$7.29bn
$4.22bn
$2.17bn
$2.28bn$2.54bn
$4.98bn
$1.97bn
$6.85bn
$2.68bn
$1.17bn
Source: Bloomberg, 17 May 2019. Indexed to 100 rebased from January 2009.
0
50
100
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200
250
300
S&P/ASX 200 vs S&P/ASX 300 Info Tech index
S&P/ASX 200 S&P/ASX 300 Information Technology Index
Quality is key for market integrityContinued evolution and strengthening of listings framework
2012 2014 2015 2016 20172013 2018 2019
Good fame and character requirements
Back door listings regulation
Mining, oil and gas code
Continuous disclosure improvements
10% minimum free float applied
More control over listings decisions
New (foreign exempt) category for NZ entities
3rd edition Corporate Governance Principles and Recommendation
Tighten acceptable structure, minimum free float, and minimum spread for emerging market issuers
New pre-vetting process for listings
20% minimum free float
New suspension policy for back doors introduced
Major strengthening of admission rules
Automatic removal of long-term suspended entities
Tightened rules on reverse takeovers
Tightened guidance on minimal working capital
Introduced ‘show cause’ process to terminate delinquent listed entities
Removed trading halts for block sales
Tightened guidance on good fame andcharacter requirements
4th edition Corporate Governance Principles and Recommendations
Consulting on simplifying,clarifying and enhancing listing rules
Thank you.
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