Securities: Aussie say "no thanks" to ASX, SGX merger

The announcement of the deal sparked off "merger mania" around the world with other exchanges scrabbling for partners to try to ensure that they would be amongst - if not the biggest - combined exchanges in the world.

But such things have been proposed and failed many times in the past decade or so.

Even so, the ASX/SGX tie-up was a catalyst for panicked matchmaking across the stock exchange world.

It is difficult to see what benefits attach to consumers by having exchanges controlled by global conglomerates. For them, the benefits are relatively obvious: scaleable back-office systems mean reduced costs and there is an increased chance of, effectively, outsourcing where one exchange operates in a lower cost environment.

There are also potential tax benefits where the majority shareholder is in a low tax environment - such as Singapore.

But there are other considerations at play: the biggest shareholder in SGX is Temasek, a Singaporean government-owned investment company. The reason Singapore's taxes are low and its social provisions high (compared to most of its neighbours) is because the government is run like a business and it has huge domestic and foreign holdings. Temasek is its biggest overseas investor and hold shares in a number of large Australian companies - some of them in what might be regarded as strategic industries such as telecoms and mining.

Also, Australia is somewhat jealous of the fact that Singapore is where most Asia-Pacific oil trades are done.

The deal was always on shaky ground once national interests were brought into play.

But, as with all the others, an equally valid question must be raised: are Stock Exchanges a supplier of consumer services? With the rapid rise of direct , or near direct, access by the public at large, it is at least arguable that they are. When considering such "mergers" governments should be sure that they deliver real benefits and security to the consumer.

There are also serious questions as to data security: Singapore, despite several years of talking about it, still has no comprehensive data protection law. True, Australia's is not exactly world class but at least it has one.And data protection in the USA is - to be courteous - rudimentary.

The question of where data is accessed and processed must be a major issue in relation to financial matters.