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Trading starts on new Australian stock exchange

A new Australian stock exchange conducted its first trades Monday, ending a decades-long monopoly in the country, with the government hailing the market as a boon for "mum and dad" investors. The Chi-X bourse opened for trading in Sydney, giving investors an alternative to the dominant Australian Securities Exchange (ASX) for the first time in more than two decades. The ASX was formed in 1987 by the merger of six state-based exchanges. While the value of trades was low as Chi-X conducts a week-long "soft launch" -- just Aus$5 million ($5.3 million) compared with the Aus$4.47 billion exchanged on the ASX -- the company said its systems worked without a hitch. "All trading participants have been active today and executed at least one trade, some of them certainly put through tens of thousands of orders," Chi-X Australia chief operating officer Peter Fowler told reporters. Treasurer Wayne Swan welcomed the new competition, saying it would help drive down the cost of trading in shares and add liquidity to the market. "Mum and dad investors and other market participants will have more choice and benefit from more competition following today's launch," he said. The presence of Chi-X, owned by Japanese investment bank Nomura Holdings, has already had an impact on the Australian market, with the ASX slashing its transaction fees 50 percent ahead of its rival's opening Monday. More than 20 brokers have registered to trade on the new market, including major firms such as Commonwealth Securities and Goldman Sachs. RBS head of Australian sales trading and execution Justin Gallagher said it was a low-key opening as traders and investors familiarised themselves with the new exchange. "We are connected and it's all systems go," he told Dow Jones Newswires. "But it's a bit of an anticlimax to be honest, as people are treading very carefully. Obviously you have to see if things settle properly, so it's all kind of slow and steady." Chi-X exchanges already operate in North America and Europe, where they have captured significant market share. In April, the Australian government rejected a proposed link-up between the ASX and Singapore's SGX, labelling it a takeover by the city state's exchange which would not serve the national interest.