Brokers To Pay More To Asx
The Age
Tuesday April 25, 2006
BROKERS will pay an extra $20 million in fees to the Australian Stock Exchange next year - about $10 million less than previously imagined - under a new pricing structure from July 1.
Macquarie Research analyst Steven Kench told The Age that under the old pricing scheme the Australian Stock Exchange refunded 45 per cent of fees to brokers on days when trading volumes exceeded 135,000 trades.The average daily trade in the three months to March 31 was about 134,000 - dangerously close to the 45 per cent refund threshold.He said that, assuming average daily trading volumes of about 130,00 trades, brokers would receive about $15 million in refunds for the year to June 30 next year. This compares with about $35 million he estimates for the this financial year."There's quite a bit of revenue leakage coming back out of the ASX as volumes grow," Mr Kench said. "That's one of the reasons why they've struck a new pricing mechanism."The exchange's third-quarter update, also released yesterday, showed trading volumes up from the previous corresponding period. In the nine months to March 31, 114,953 trades took place on an average day compared with 86,325 in the previous corresponding period.The exchange also reported profit of $106.5 million during that period, including profits from the sale of registry service Perpetual.The exchange also said it had spent $2.5 million over the nine-months on the proposed merger with the Sydney Futures Exchange."As these costs are expected to be capitalised, they are not included in the reported profit," the ASX said. "Should the merger not proceed, all merger costs will be expensed and included in reported profit."KEY POINTS ? A new pricing structure means brokers will pay more in fees. ? Increased trading volumes are behind the new pricing.? ASX reports a $106.5 million profit to March 31.
© 2006 The Age