NSX Ltd (ASX: NSX), the company behind the National Stock Exchange of Australia, could soon be about to change how we invest in shares in Australia.
In a move to challenge ASX Ltd (ASX: ASX), the NSX announced today that iSignthis Limited (ASX: ISX) has taken a 12.96% position in NSX with a $4.2 million placement at $0.145 per share, causing the NSX share price to rocket 128% to $0.20 today.
NSX will now seek shareholder approval to raise an additional $3.8 million to $5.8 million of which ISX has the option to invest for an additional allocation, for up to a 19.9% final stake in NSX.
What are NSX and iSignthis going to do?
They are forming a joint venture called ClearPay to develop a multi-currency, real-time, same day delivery versus payment platform and it will be integrated with iSignthis’ ISXPay and Paydentity.
The system will initially be utilized alongside the current National Stock Exchange of Australia’s current post-trade arrangements, though eventually it is intended that all transactions will be processed on the new platform.
The partners aim for Clearpay’s same-day settlement offering to be superior to the process offered by other domestic and global exchanges by utilising blockchain technology, making it one of the most advanced systems in the world.
NSX looks to attract companies
Acting CEO of NSX Thomas Price said: “Market commentators are in broad agreement that cash equity exchanges are facing a global technology revolution which is challenging legacy methods of clearing and settlement. Having patiently monitored the development of the appropriate technology and know how we consider that this is the right time for the NSX to act.
“The ClearPay joint venture with iSignthis allows the NSX to expediate its plants to transform its licenced exchange market within a cost-efficient framework. The introduction of an already experienced provider of RegTech and payments systems is very satisfying for us as it allows an accelerated build process.
“More exciting is that it creates a solid foundation for the NSXA to be a true independent first-class venue of choice for companies seeking to be serviced via the most advanced infrastructure and distribution in their goal of attracting investors from here and abroad.”
Could it happen?
Look at the US. The NASDAQ came in with better technology and now it has many of the leading US technology companies listed there, rather than the New York Stock Exchange.
However, the ASX is also investing in new technology which could be enough to see off this intriguing competition from iSignthis and NSX.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.