Transformation at the National Stock Exchange

As a Tier 1 marketplace, the fundamental purpose of the National Stock Exchange (NSX), is capital formation; bringing together companies who require capital to fund growth, with investors who have capital and are looking for investment opportunities. By targeting companies with sub $50m market-cap, we see ourselves as funding innovation and facilitating diversification in the Australian economy.

When I took the job, I started with a blank piece of paper, defining the attributes the organisation needed to be successful. I then went about rebuilding the business from the ground up.

We aim to provide a competitive, compelling alternative for listed equities, competing with the Australian Stock Exchange (ASX) by bringing innovation, tailored product delivery and specific solutions to companies and investors.

I was appointed Managing Director and CEO in June 2016 with a clear mandate, endorsed by a supportive board, to transform NSX into an exchange that can compete with ASX in Australia and sit comfortably among global marketplaces with similar missions, NASDAQ being one of them. When I took the job, I started with a blank piece of paper, defining the attributes the organisation needed to be successful. I then went about rebuilding the business from the ground up. The biggest blockers to success have traditionally been our fragmented distribution infrastructure and lack of investable product; essentially, investors didn’t have ready access to companies listed on the exchange and those companies weren’t attractive enough to ensure liquidity. We structured our transformation program around those drivers.

In our industry one of the key pieces of the distribution puzzle is the IRESS technology platform which provides distribution to a significant portion of the market. Shares in NSX listed companies weren’t available for trading through IRESS. Brokers had to go to a separate terminal, log in and place an order when a customer wanted to trade an NSX security. That in itself was a real hurdle. We needed to enable NSX securities to be traded through the IRESS platform in the same way as ASX securities were. IRESS took on the project and now, less than 12 months later, we’re in the process of rolling out the platform to the broking community. Removing that barrier is a game changer for us while also removing an inefficiency in the market. Questions for investors now relate to a company’s prospects rather than the exchange they’re listed on.

We then focused on sourcing the right product which has meant finding companies that have an attractive story to tell. That’s not to say they’re always profitable or certain to grow in value, but it’s companies that are communicating a story that engages and brings investors to the exchange. There are three components to our proposition for companies that have an Initial Public Offering (IPO) in their future.

We then focused on sourcing the right product which has meant finding companies that have an attractive story to tell…it’s companies that are communicating a story that engages and brings investors to the exchange.

Firstly, there’s the access they get through our listing process, along with the transparency and confidence that brings. From the beginning, our team works very closely with the company and their advisers. The road to IPO can take many turns, so it’s important to know at all times where you stand. It requires a big investment of scarce management time. Working closely with our executive team gives companies the best chance of a successful listing.

Second is external visibility. There are approximately 76 securities listed on NSX, as opposed to 2,200 companies listed on ASX, which ensures prominent visibility. Listing on a slightly smaller exchange gives companies the opportunity for a higher profile. To amplify that, we have invested in an NSX equity research program to provide independent commentary on companies listing on the exchange, supporting their first step into the marketplace.

Finally, there’s cost. We run a very lean operation. To list on NSX is two thirds the cost of listing on ASX. We don’t primarily compete on cost, but we know it’s an important consideration for small and mid-sized companies.

Transforming the business meant closing our Newcastle and Melbourne offices and opening a new head office in Sydney. That move brought us into the heart of the financial services industry, giving us an opportunity to engage with our stakeholders and demonstrate relevance to the market. We’re included in conversations that we weren’t previously part of, contributing thought leadership on industry changes such as CHESS replacement. It also meant hiring a new team. I’m incredibly fortunate to have found such an experienced, entrepreneurial, and engaged team who are committed to creating something new in the Australian equities market.

Having gone a long way to achieving that the changes required, we are now thinking about how we differentiate ourselves. A wave of entrepreneurial activity coupled with the high retail participation rate in Australia, opens up new opportunities for us. The ASX top 200 has remained largely unchanged for almost ten years and yet our economy and the global economy have changed dramatically over that time. The lack of competition for listings has created an inefficiency in the allocation of capital. It’s important that ASX has competition in order to fund innovation and broaden investment opportunities. On a global basis, Australia has the fourth largest pool of investable funds and yet many fund managers look offshore to allocate new capital flow.

It’s important that ASX has competition in order to fund innovation and broaden investment opportunities.


We’re well on our way to transforming NSX. There’s barely a person, server, process or even chair that is the same as it was twelve months ago. Our vision is to be an international market of the same caliber as similar marketplaces in the US (Nasdaq), Singapore (SGX), New Zealand (NZX) and Canada (TSX). In doing so we’ll be providing a valuable platform to Australian investors, Australian companies and the Australian capital markets industry

Ann Bowering is CEO of the National Stock Exchange of Australia.