Asia Pacific Exchange Limited (APX)
Formerly known as Australia Pacific Exchange Limited
APX is one of three operating groups of a securities exchange in Australia with a market licence granted by the Australia Securities & Investments Commission (ASIC). APX operates a licensed securities market under the supervision of ASIC and is required by law to act fair, orderly and transparent at all times.
Whilst APX was granted a stock exchange licence by ASIC in August 2004, the origins of the exchange date back some 8 years to the successful operation of the Exempt Markets (EM). During its life, the exempt markets generated over 5,000 trades and 163 million shares traded with a turnover value of approximately A$500million.
A number of S&P / ASX 300 companies listed on the Australian Stock Exchange (ASX), such as Sigma Company Limited, Sydney Futures Exchange Corporation Limited and SPC Ardmona Limited were all traded successfully on EM before moving to the ASX.
In Oct 2008, AIMS Financial Group (“AIMS”) became the new major shareholder of APX and has provided the necessary funding facilities for APX to continue its domestic business strategy. In addition, APX is now in a more competitive position to develop a longer term regional approach with an initial focus on opportunities in China.
Domestically, APX will continue to aim to provide quality services to Listees where price transparency is of a high priority and appropriate liquidity can be provided by the market. At the same time, it will actively explore and develop growth opportunities in Asia, particularly in China on a longer term basis.
As a securities exchange, APX provides ‘listing’ facilities to companies and securities issuers as well as ‘trading’ facilities for stock brokers, traders and investors to buy and sell shares/securities.
The securities that can be traded on APX include: shares issued by companies, units issued by trusts and other pooled investment products as well as fixed interest instruments, such as, bonds.
The key features of the APX market consist of:
- Simple operating rules for the market by imposing fewer constraints on the structure of the listed company providing an easier entry level. For example, there are no requirements to change the control features, board or organisational structure of a Listee.
- Use of modern technology and an effective trading platform, which enables brokers to place orders over the internet and investors to track their orders. The trading system is an evolution from the exempt market system which was developed and tested over more than five years.
- The provision of simple trading, clearing and settlement systems, which cater for low volume markets as well as medium volume markets.
- There is a panel of specialist participants dedicated to the market providing support to Listees and ensuring that the market has integrity and is information rich.
In essence, the APX market is designed to ensure active and profitable participation of all participants.
OTHER ROLES OF APX
As a securities exchange licensed by ASIC, some of the main commercial roles of APX include:
Creating Capital Raising Opportunities for Corporate
The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
Creating Investment Opportunities for Investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore, the Stock Exchange provides the opportunity for both small and large investors to own shares in companies of their choice.
Facilitate Company Growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase their market share or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.
Mobilizing Capital for Investments
When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activities with benefits for several economic sectors such as agriculture and commerce and industry, resulting in stronger economic growth and higher productivity levels.
Oversees Corporate Governance
By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the varying demands of these shareholders, and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies tend to have better management records and general Corporate Governance than privately-held companies.