Dear ASX - hire some more people?

Hi there, 

It’s been an eventful week for the ASX! Unfortunately another technical issue, which no doubt resulted in a lot of internal, and external, meetings and head scratching.

Meanwhile, CBOE is selling their freshly-upgraded Australian exchange, and several international buyers including exchanges from New Zealand, Canada, and Singapore are circuling with interest.

And recently, the National Stock Exchange was bought by the Canadians who built the CSE into a genuine challenger to the TSX with more than 700 listings. If they can do that in Canada, you can see why they view Australia as an opportunity. Weeks like this probably add to it.

With the CSE already coming via the NSX, and the CBOE sale attracting other international exchanges, it is very likely that 2026 will see us go from a one exchange country to two, or three! With those entries will existing ASX companies look to move to other exchages?

Large caps within indicies, or close/aspiring to be in them, likely wont. Many Aussie fund managers would have mandates that specify "ASX 200" or "ASX All Ords" - so not being on the ASX might remove a lot of potential buyers.

But new listings, smaller caps, and companies whose cap tables or capital needs don’t align with ASX rules might be tempted - especially if those new exchanges bring competition on price and offering. 

So - should there be more than one exchange in Australia? Are we big enough? Is there enough liquidity? If brokers route trades across all exchanges, does it even matter?  

I honestly don't know the answer, but my gut says a single, strong and flexible exchange is better for Australia.

So ASX - the question then becomes what can you do to help stave off this competition? Or if the competition comes, how can you ensure the cut isn't deep?

My view: concentrate on the Companies - how can you get them to stay, how can you get them to want to be listed on the ASX?

The ASX only earns 19% of its revenue directly from listed companies. The balance 81% comes from selling access to those companies - trading, data, prices, access. Investors and banks will go with the deals, volume and companies are.

So if you win the companies, you win the market.

Here are three ideas the ASX could implement now to (1) easily add value to their core customer base, and (2) protect themselves against competition in 2026 and beyond:

1. Give listed companies more time, and more love.

For most companies, the only interaction they have with the ASX is through compliance or finance - that's not exactly relationship or loyalty building. Yes big or sexy companies get a lot of attention, but the vast majority just skate through.

And that is partly because the team that manages them is, in my opinion, really under-resourced.

It wouldn't take many more people - say an extra 10 - to drastically change the engagement and community building that could come from the ASX. Call it $2m all in cost per year - that is 0.4% of their $510m NPAT, and I think it would be worth every penny.

2. Create more nuanced rules for different types of companies.

I sit on an AIRA panel, and most people agree that there is an imaginary line at the ASX300 where things change. You're now a $1bn+ company, are in the indexes, have super funds auto investing in you, have to deal with AI-driven hedge funds and more.

The 300th largest company is worth $1.3bn. The 300th smallest is work $8m. They are vastly different companies - but the same rules and expectations apply.

I'd keep this in mind and make nuanced changes to the rules and implementation of them to facilitate a better listed experience for both large and small companies - and for the investors that back them!

3. Bring back reverse takeovers.

RTOs aren't perfect but they're better than nothing. They allow seemingly dead companies to come back to life, and it has created some amazing outcomes. 

Zip and Afterpay are two examples of reverse takeovers of mining shells by finance companies and they're some of the biggest success stories on the ASX.

Getting rid of, or drastically reducing, RTO's has lead to fewer listed companies and less opportunity on the ASX. Bringing them back can help solve that.

None of these are big moves, although some are clearly easier than others.

The best thing the ASX could do is turbocharge #1 - hire 20 people and give listed companies a whole lot of love and goodwill.

What else could they do? Am I on the right track here, or have I missed something?