- Australian equities are being reshaped by shrinking on-screen trade sizes and super funds shifting allocations offshore.
- ASIC has approved Cboe Australia as a listing venue (with NSX also in play), ending ASX’s near-monopoly on new listings.
- Regulators are forcing ASX governance and infrastructure upgrades, including a $150m capital charge and tighter oversight.
- Market plumbing is changing too, with new opening/closing auction mechanics and APRA phasing out bank hybrid capital by 2032.
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The Australian equities market is currently in the midst of what many may regard as a long-anticipated shake-up—one combining regulatory, structural, and competitive shifts that are reshaping how capital is raised, traded, and governed.
1. Liquidity dislocations and portfolio repositioning. Data reported by ASX and ASIC show that average trade sizes are shrinking: AUD 2,229 on ASX and AUD 1,479 on Cboe the latest quarter, down roughly 50% or more over 5-10 years. Domestic investors—especially superannuation funds—are increasingly underweight Australian‐listed equities relative to overseas peers, shifting towards global tech, semis, AI sectors that are poorly represented in ASX’s main indices.
2. New competition in listings. In October 2025, ASIC granted Cboe the right to list new companies in Australia. This opens the door for dual listings and foreign companies to list domestically under competitive terms. Also, CNSX Global Markets acquired NSX and signaled intent to build up its listings business. Both developments threaten to erode ASX’s dominance in IPOs and early-stage listings.
3. Regulatory overhaul and governance reform of ASX. Following several high profile infrastructure failures (e.g., CHESS system missteps), the ASIC-led inquiry concluded the ASX had over-prioritized shareholder returns at the cost of stability and continuity. Immediate outcomes include a $150 million capital charge, restructured boards of clearing and settlement licensees, limits on executive compensation, and a reset of the ASX’s Transformation (“Accelerate”) program with detailed Milestones.
4. Structural improvements to trading mechanics and instruments. As of 23 June 2025, ASX moved from a staggered opening to a synchronized single open; introduced a Post-Close trading session to ensure securities with price-sensitive releases near market close can participate in closing auctions. Separately, APRA has committed to phasing out bank hybrid capital (Additional Tier 1 instruments) by 2032, removing both yield opportunities and associated risks for retail and institutional holders.
Strategic implications:
- ASX must accelerate modernization to retain listing and trading flow; any lag may lead to permanent loss of market share especially if listing standards lower on competing venues.
- Investors, especially domestic super funds, may need to re-think allocation strategies if domestic equities liquidity remains constrained or costly.
- Corporate governance, compliance, and disclosure frameworks will be under higher scrutiny; firms should anticipate tighter requirements and more frequent regulatory interventions.
- Capital raising costs may diverge based on exchange choice, particularly for smaller or founder-led companies; floor below ASX demands may drop, driving new funding models or hybrid vehicles.
Supporting Notes
- ASX’s average on-screen trade size in recent reports: AUD 2,229; on Cboe: AUD 1,479. These averages have roughly halved compared to five years ago and even more so compared to a decade prior.
- Cboe (formerly Chi-X Australia) obtained regulatory approval in October 2025 to list new companies domestically, not just secondary trading of ASX-listed securities.
- CNSX Global Markets’ acquisition of NSX consolidates competitive pressure in the listings space from alternative exchange venues.
- ASIC’s inquiry found ASX had paid out 95% of profits over past five years, underinvested in infrastructure; ordered $150 million capital charge, restructured boards, and restrictions on overlapping directorships.
- ASX implemented from 23 June 2025 a synchronized single open for all stocks, replaced staggered rotation; introduced Post-Close session so that securities releasing announcements near closing time can still have closing auctions.
- APRA announced phase-out of Additional Tier 1 bank hybrids by 2032; as of April 2025, ASX-listed hybrids market valued A$43.2 billion; bank hybrids presently offer yields 2-2.25% above the bank bill swap rate.
- ETF sector: Betashares reports total assets under management (AUM) in Australian ETFs surpassing AUD 300 billion, up ~36% year-on-year; projected to exceed AUD 500 billion by end-2028.