Alternative execution platform Chi-X Australia has recruited a former London Stock Exchange executive, Jamie Crank, as head of market operations.

Crank, who was most recently head of commercial management, equity and derivatives markets, at the LSE comes to the position only weeks after the inaugural chief of Chi-X Australia, Peter Fowler, announced he was standing down from the role to take a board position.

Chi-X is a subsidiary of Japanese giant Nomura Holdings – also a parent to online dealer and ASX participant Instinet – and operates in Canada and in Europe, where it has won nearly 30 percent of volume on the London Stock Exchange in only three years. A Singapore-based joint venture with the Singapore Exchange – Chi-East – was closed down in May this year after barely 18 months of operation, blaming slower market volumes.

Chi-X is into the second year of operation in Australia and its market share peaked at 12 per cent of Australian daily market turnover in October. The firm’s value proposition is around cost and speed of execution, which in turn attract the high frequency traders.

Regulator ASIC released a review of Chi-X in November, saying that while Chi-X was meeting its regulatory obligations there were issues with transparency as it built market confidence.

In response, Chi-X said it undertook to disclosure any future potential conflicts of interest involving shareholders Instinet and Nomura and independent director David Trude, who is also chairman of broking house EL&C Baillieu.

Chi-X is also pondering a move into derivatives trading if regulators agree in December to introduce competition in clearing services.

Derivatives are one of the few growth areas at the ASX, with revenue up 9.6 per cent last financial year to $188.7 million.

ASX revenues from equities trading, however, were down 7 per cent to $124 million due to competition not just from Chi-X, but also from “dark pools” offshore.

 

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