THE Federal Government has been urged to speed up the approval process for potential rivals to the Australian Securities Exchange.
A Government-commissioned report says the move would foster competition and aid Australia's quest to become a financial services hub.
The report, by the Australian Financial Centre Forum, argues for the ''early consideration'' of licence applications lodged by potential market operators so that successful applicants are able to launch quickly after market reforms are put in place later this year.
Corporate Law Minister Chris Bowen foreshadowed the end of the ASX's market operator monopoly in August when he announced that the Australian Securities and Investments Commission would take over from the ASX as market supervisor.
The decision was prompted by potential conflicts of interest in the ASX's dual roles of supervisor and market operator, especially if ASX competitors were allowed to enter the market.
Under Mr Bowen's plan, the transfer of powers from the ASX to ASIC would be finished during the third quarter of this year, after which consideration of licence applications would take place.
But AFCF argues that the licence applications should be considered earlier, so competition can be introduced ''as soon as possible'' after the reforms are finished. ''Evidence from other countries … suggests that competition has resulted in innovation and generally lower transaction costs,'' it said.
Three potential market operators lodged licence applications more than two years ago, but the reform process stalled as the global financial crisis hit.
Mr Bowen said the Government would now consider the report's recommendations.
