For personal use only Australian Securities and Investments - - PDF document

ASX Limited ABN 98 008 624 691 20 Bridge Street Sydney NSW 2000 PO Box H224 Australia Square NSW 1215 Customer service 13 12 79 asx.com.au

22 May 2019 Australian Securities and Investments Commission ASX Market Announcements Office Mr Nathan Bourne ASX Limited Senior Executive Leader, Market Infrastructure 20 Bridge Street Level 5, 100 Market Street SYDNEY NSW 2000 SYDNEY NSW 2000

2019 STOCKBROKERS AND FINANCIAL ADVISERS CONFERENCE PRESENTATION

Attached is the presentation that ASX Managing Director and CEO Dominic Stevens will deliver today at the Stockbrokers and Financial Advisers Conference in Sydney. Daniel Csillag Company Secretary Further enquiries: Media Matthew Gibbs General Manager, Media and Communications T +61 2 9227 0218 M 0411 121 219 E matthew.gibbs@asx.com.au Analysts/Investor Relations Josie Ashton Head of Investor Relations T +61 2 9227 0646 M 0416 205 234 E josie.ashton@asx.com.au

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Stockbrokers and Financial Advisers Conference 2019

Delivering new customer

• pportunities with

digital, data and DLT Dominic Stevens, CEO

22 May 2019

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Agenda

DLT

CHESS replacement

Data

ASX DataSphere

Digital

asx.com.au

Open infrastructure solutions

• Create new products and services
• Improve operational efficiency
• Reduce risks and costs

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History of delivering industry efficiency and innovation

The evolution of equities clearing and settlement

Share certificates T+10  T+5 Electronic messaging T+3 Expanded into new products T+2 DLT-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

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Updated clearing and settlement system

New 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

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Updated clearing and settlement system

New 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

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  

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 system

New 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

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Updated clearing and settlement system

New 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-live

March-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

   

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Delivering contemporary, open infrastructure

Provide 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

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Open infrastructure solutions to benefit customers

Industry connectivity Data analytics Post-trade infrastructure

Customer challenge ASX solution Customer benefits

Australian Liquidity Centre Tier-3 data centre Data centre investment Data management & expense Competitive services Community connectivity ASX DataSphere Open ecosystem platform Technology, governance, datasets and analytical tools Curate and standardise Big data science capability Commercialise and distribute Improved data generating product 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

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Opportunity to unlock value and reduce costs

DLT solution

*Rainmaker Consulting May 2017 report for the 2016 year

Cost of ASX fees to settle ALL of the equities traded in Australia

$22.4bn

Australia’s superannuation industry fee revenue*

?

Value unlocked by permissioned, synchronised, real-time, source-of-truth information?

~$50m

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Improving the digital experience

Redesigning and modernising the ASX website

More ways to connect New data analytics and insights New pricing and issuer pages

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Quality products and trusted advice

New products and services to capture opportunity

Meet increasing demand and changing investor appetites

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

$bn

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LICs and LITs

Strong growth in ASX investment products

mFund growth continues with 43% increase in FUM over past year

5 10 15 20 25 30 35 40 45 50 40 50 60 70 80 90 100 110 120 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19

Market capitalisation, billions Number LICs/LITs

Exchange traded products

5 10 15 20 25 30 35 40 45 50 40 90 140 190 240 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19

Market capitalisation, billions Number ETPs

mFund

100 200 300 400 500 600 700 800 900 40 60 80 100 120 140 160 180 200 220 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Apr-18 Oct-18 Apr-19

Market capitalisation, millions Number mFunds

$43b

market cap (FUM) 113 Funds

$48b

market cap (FUM) 243 Funds

$899m

market cap (FUM) 222 Funds

Source: ASX Investment Products Monthly Update – Apr 19

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Choice through sectoral and geographic diversity

ASX’s international listings strategy

56

46

20 17

11 3

Total Foreign Listings 280+

Source: ASX Data, May 2019

11

New Zealand United States Singapore Israel Canada Ireland Malaysia

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Expanding and diversified listings franchise

Tech 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. 50 100 150 200 250 300

S&P/ASX 200 vs S&P/ASX 300 Info Tech index

S&P/ASX 200 S&P/ASX 300 Information Technology Index

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Quality is key for market integrity

Continued evolution and strengthening of listings framework 2012 2014 2015 2016 2017 2013 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

• ver 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

• f admission rules

Automatic removal

• f 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 and character requirements 4th edition Corporate Governance Principles and Recommendations Consulting on simplifying, clarifying and enhancing listing rules

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Thank you.

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