Nationalise the expense, privatize the profits, Down Under style
The media is treating the story as the exchange's loss. Guambat reckons it's the taxpayer's loss. There was no quid pro quo in the deal for the taxpayer, just a shovel and a pile of manure to pick up.
In a move welcomed by brokers and institutional shareholders, ASIC is to supervise the share market from early 2011 while the ASX will continue to ensure companies comply with listing rules.
The decision is a victory for ASIC chairman Tony D'Aloisio.
Trade regulation powers to ASIC
D'Aloisio was the former head of the ASX, which had a rather lackluster record when it came to regulating the market. Now, as chief of the government ASIC, can we expect any better record? Or is this just another insider trading quickie? The proof of the pudding will be in the eating.
Not all reporting was glossy. Martin Collins is on a horse Guambat would back in this article:
ASX loses battle but wins the war
Contrary to the prevailing view, in many respects the ASX could be seen as the winner from yesterday's move, but it depends on how the government handles the clearing and settlement of cash equities, which account for two-thirds of the $163 million in trading revenue the ASX collects from sharemarket trading.
Supervision costs the ASX about $16m a year, after tax, and much more in terms of reputational damage, so it could easily wave goodbye to that without shedding any tears.
The global financial crisis has shown Australia's regulatory structure to be basically fine. What has been missing is regulators who regulate.
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