Don't baby the bourse

23 March 2011 By John Foley Follow @johnsfoley

Blocking Singapore’s bid for the Sydney bourse on national grounds makes little sense. Stock exchanges have few employees, and as long as regulators have teeth, foreign ownership brings few risks. Politicians want thriving financial hubs. Protectionism would achieve the opposite.

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Australia's parliament may hold an enquiry into the Singapore Exchange's $7.5 billion bid for its Australian counterpart, ASX, further delaying any conclusion of the deal.

The takeover, which has been approved by ASX's board, requires the goahead from Australian treasurer Wayne Swan, and from the country's Foreign Investment Review Board.

If Swan and FIRB approve the deal, it must then be passed by Australia's parliament, which would be asked to remove a statutory 15 percent cap on ownership of ASX shares. Swan denied on March 21 that the government was set to reject the merger in the face of widespread public hostility.

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