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NZX’s Axe ECN not generating returns

NZX’s Axe ECN not generating returns

(14 January 2010 – New Zealand) The New Zealand Exchange (NZX) has announced it will be winding up the operation of Axe ECN, saying its Australian venture could not "generate sustainable economic returns". Axe was established in 2006, with NZX taking a 50 percent stake in the venture, while brokers Citigroup, CommSec, Goldman Sachs JBWere, Macquarie Bank and Merrill Lynch each taking a 10 percent share.

After formation the Axe applied for an Australian Markets Licence in an effort to rival market heavy weight ASX.

Australian laws stinted the group from moving forward until last year when the government approved changes that would open up the market to new players.

Chris Bowen, minister for financial services, said at the time that the Axe was not pushing its application.

The NZX has now revealed that after a review and careful assessment of the market it no longer saw opportunities for its business model to generate sustainable economic returns and shareholders had therefore agreed to cease operations of the legal entity.
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