Paul Brech, chief executive of broker BTIG Australia, is not sure if Australia is big enough for two exchanges.
Chi-X Australia Ltd. plans to open for business by October 31, breaking the Australian Stock Exchange Ltd.’s monopoly.
“Two markets does not necessarily mean you have more people buying and selling,” says Brech, a Wimbledon, London native who has lived more than two decades in Australia and joined the firm in 2008. “Execution may come at a cheaper price but not necessarily with an improvement in execution.”
A myriad of opportunities to trade stocks has resulted in confusion for fund managers in Europe and the United States who have seen markets fragment, making price discovery and execution increasingly difficult.
By exploiting fears in the $1.4 trillion Australian fund management industry that investment banks with their myriad of businesses are conflicted, BTIG have garnered more than 100 Australian clients in three years.
Brecht declined to disclose market share data or fees charged to its customers.
BTIG sees brokerage being disaggregated between a fee for pure execution and a fee for research. The company’s brokers mostly service customers that have hundreds of millions of dollars under management.