The Australian Stock Exchange history starts with six separate exchanges established in the state capitals Sydney (1871), Hobart (1882), Melbourne (1884), Brisbane (1884), Adelaide (1887) and Perth (1889).
The first interstate conference was held in 1901. The exchanges then met on an informal basis until 1937 when the Australian Associated Stock Exchanges (AASE) was established, with representatives from each exchange. Over time the AASE established uniform listing rules, broker rules, and commission rates.
Trading was conducted by a call system, where an exchange employee called the names of each company and brokers bid or offered on each. In the 1960s this changed to a post system. Exchange employees called 'chalkies' wrote bids and offers in chalk on blackboards. They also recorded transactions made.
In 1976 the Australian Options Market was established, trading call options.
In 1980 the separate Melbourne and Sydney stock exchange indices were replaced by Australian Stock Exchange indices. This is essentially the start of the modern Australain Stock Exchange history.
broker's commission rates were deregulated. This has allowed competition
to lower commissions gradually ever since, with rates now as low as
0.12% or 0.1% from discount internet-based brokers.
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In 1987, the separate exchanges merged to form the Australian Stock Exchange. Also in 1987 the all-electronic SEATS trading system was introduced. It started on just a limited range of stocks, progressively all stocks were moved to it. This enabled the trading floors to be closed in 1990. Also in 1990, the warrants market was first opened.
In 1993 fixed interest securities were added. Also in 1993 the FAST system of accelerated settlement was established, and the following year the CHESS system was introduced, this superseded FAST.
In 1995 stamp duty on share transactions was halved from 0.3% to 0.15%. The ASX had agreed with the Queensland State Government to locate staff in Brisbane in exchange for the stamp duty reduction there. This caused the other states followed suit so as not to lose brokerage business to Queensland. In 2000 stamp duty was abolished in all states.
In 1996 the exchange members voted to demutualise. The exchange was incorporated as ASX Limited and in 1998 the company was listed on the ASX itself. The ASX arranged with the Australian Securities and Investments Commission to have it enforce listing rules for ASX Limited.
As you can see, the Australian stock exchange history is one of quickfire change and technology improvements. While each of these upgrades and improvements were likely viewed as a risk at the time, they have certainly paid off. The market is considered to be one of the more progressive. This reputation combined with the ease with which big funds and banks can access the market has helped to push it into the big leagues, bringing in investment money to the country and making a country with a small population a global player.
For the ASX to maintain this position will take continued investment in the latest technologies to enable faster trades in greater numbers from the large algorithmic funds that now hunt the world for opportunities.
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