ASX - Slide 2 The Australian Securities Exchange 1. W hat...

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1 30/04/09 Slide 2 The Australian Securities Exchange 1. What is it? 2. What does it offer? (what doesn’t it do: OTC, currency) 3. Who uses it and why? 4. How do they use it? 5. How does it work? 6. How is it controlled? 7. How do people use it to make money (Risk or Return)? 8. How can you or I use the ASX? Slide 3 What is it? The Australian Securities Exchange is a publicly owned company that holds an Australian Market Licence as described in the Corporations Act, S795-798. On the basis of that licence, it provides a trading platform for a wide range of financial instruments: Shares Futures (since the acquisition of the Sydney Futures Exchange (SFE) Options REITS (real estate investment trusts) Infrastructure funds Warrants Managed funds Exchange Traded funds CFD's Interest Rate securities Its job is to provide a ‘fair, transparent and orderly’ market for the transfer of Australian financial securities. The record shows that the ASX commenced business on 1 April 1987. This doesn't mean that Australian companies and investors had no way of trading shares. Up until that date, each state has its own exchange but at that point all agreed to an amalgamation, so those six became one. Not long after that, trading changed from floor trading to electronic/ automated (SEATS - which surprisingly enough means Stock Exchange Automated Trading System!). The date was October 19, 1987. Possibly not the most auspicious day to go electronic because some analysts have suggested that computer-based automated trading was one of the causes of the October 19 rout.
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2 30/04/09 In 2006, the Exchange moved from SEATS to ITS (Integrated Trading System) which handles the trading of all of the securities handled by ASX. You'll often hear the ASX called the Australian Stock Exchange. But it's really the Australian Securities Exchange. While equities do form a large part of the Exchange's activity, over the years it has broadened its attention to include the range of other securities described above. To talk about shares however, the number of companies listed changes all the time but it's around 2000 in all sorts of industry sectors -- but with mining and resources quite strongly represented. Of these 2000, probably 2-300 dominate in terms of market cap, research attention, and inclusion in the primary market indices (All Ords and the S&P). It's a global exchange, meaning that it competes with international exchanges for listings - and it provides services to international investors. So in an everyday sense, the ASX is a Stock exchange. But over the years it has been in the position (driven by demand) to develop machinery for new products ( eg bonds) or to acquire businesses that are already providing security market services eg SFE, the Sydney Futures Exchange. To give you some idea of the market and its operations, some figures at the
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ASX - Slide 2 The Australian Securities Exchange 1. W hat...

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