The Commerce Commission has said its preliminary view is that it will authorise amended by-laws for the Sydney Futures Exchange Clearing House (SFECH).
The Commission issued a draft determination giving its preliminary view today. A final determination should be released by August 1.
The New Zealand Futures and Options Exchange, the Sydney Futures Exchange and SFECH had applied for authorisation of by-laws covering admission to membership, clearing and guaranteeing trades and disciplinary action. Trades in New Zealand are cleared and guaranteed by SFECH.
The Commerce Act prohibits arrangements which substantial lessen competition and also prohibits arrangements between competitors which could exclude a rival from a market. However, it also allows them to be authorised if it can be shown that public benefits outweigh detriments to competition.
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The Commission has indicated that it intends to impose conditions on the authorisation requiring it to be notified of any proposal to change the net tangible asset requirement or to impose a net liquid asset requirement.
In December 1993 the Commission authorised SFECH by-laws to be in effect until October 31 this year. There is only one amendment to the existing by-laws. It would require clearing members to have net tangible assets of A$5 million rather than the current A$2 million minimum.
