Most articles on the issue of the proposed Singapore-Australian stock exchanges merger have been replete with emotional outbursts on national interest and the impact on investors' profits.
Here are some objective analysis by economic, industry, legal and regulatory experts that should be considered seriously than politicising an economic issues.
The main players are keen but each side is worried that they have the short end of the deal. Most Australians' concerns focus on compromises on regulations of companies' listing, complaince such as disclosure requirements and independence. Singaporean analysts, on the other hand, are uncomfortable that the venture is overpriced and laden with obstacles on approval as well as potential management and competition issues from Chi-X.
It is a perennial challenge to achieve an optimal balance between regulation and economic vibrance.
QUOTE :
[Lawyers Michael Wilton and Jill Gauntlett say : ... shareholders should be comforted by the long historical links in regulation between Australia and Singapore. When Singapore fashioned its corporations law almost 50 years ago, it modelled it on the uniform Companies Act passed by all Australian states in 1961. Revised uniform listing rules took effect in Australia at the same time.]
[Singapore has different financial track record requirements and does not have an equivalent of Australia's assets test that allows mining exploration companies to list before they turn a profit.]
[Jennifer Hill, Professor of Law in University of Sydney says :
Australia and Singapore allow their exchanges to grant waivers case by case. This ''may potentially constitute a form of selective regulation'' ... the corporate governance consultancy ISS released a report in 2007 that concluded that the Australian waiver scheme lacked transparency, especially compared with New Zealand, but was substantially more transparent than London or New York .... such disparities could be a concern as global competition among exchanges increases.]
[''During the 1990s, it was often assumed that the trend towards cross-listing of foreign firms in the United States was itself a new form of regulatory competition, under which foreign companies from jurisdictions with poor corporate governance would cross-list to gain regulatory credibility,'' she says.
But this assumption was questioned after the Sarbanes-Oxley Act was passed in 2002, when many high-profile Asian companies bypassed the New York Stock Exchange in favour of other international exchanges.
''This suggested that overly stringent governance may repel, rather than attract, cross-listing,'' Hill says. ''This remains a danger for securities exchanges, particularly given increased competition for listing and trading revenues.'' ]
http://www.theage.com.au/business/asx-merger-plan-raises-questions-of-governance-20101028-175s7.html
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