iSignthis Ltd (ASX: ISX) has made a big announcement this Thursday – it has made a 12.96 percent strategic investment in NSX Limited, an operator of an Australian exchange. Therefore, following the investment, iSignthis is a direct competitor of the Australian Stock Exchange (ASX).
This investment has been made via a $4.2 million placement at $0.145 per share, which is based on the NSX three month Volume Weighted Average Price (VWAP). NSX operates the National Stock Exchange of Australia (NSXA), a secondary stock exchange and direct competitor in Australia to the ASX.
With the strategic investment in NSX and its own technology platforms, iSignthis has the intention to develop an Australian version of Nasdaq and become a competitive alternative to the ASX, the company’s Chief Executive Officer, John Karantzis, said in the statement.
“We are delighted to be a strategic shareholder in the NSX, which operates NSXA, Australia’s second-largest Tier 1 market operator,” Karantzis explained. “We are excited to be working together with NSX to develop a platform that will significantly increase NSXA’s attractiveness to the broking and investment banking community, as well as private organisations that intend to go public via IPO.”
“With this investment and iSignthis’ technology platforms, we have the capability to develop an Australian version of Nasdaq, and become a competitive alternative to the ASX.”
Joint venture ClearPay
In particular, the NSX will focus on becoming Australia’s first true digital asset exchange. To achieve this, iSignthis and NSX are working together on a platform that will support NSXA’s transformation to a globally competitive stock exchange.
In a second joint statement released today, the companies revealed that they have entered into a Shareholders Agreement to form a joint venture vehicle – ClearPay Pty Ltd (ClearPay JV).
The purpose of ClearPay JV is to develop a Distributed Ledger Technology (DLT) multicurrency, real-time, same-day, Delivery versus Payment (DvP) platform, to be integrated with iSignthis’ ISXPay and Paydentity. Initially, the system will support the NSXA’s current post-trade arrangements where possible.
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According to the statement, the aim of the platform is to process all transactions of the NSXA, giving the exchange the possibility to offer same-day settlement (T+0) capability.
iSignthis to have 59% stake
Initially, NSX will invest $3.2 million for a 41 percent interest in ClearPay JV, and iSignthis will hold 59 percent interest. The payment identity company will contribute the intellectual property to the venture, and its subsidiary, Probanx Solutions Ltd, will lead the design and development of the DLT based platform.
Speaking on the joint venture in the statement, Thomas Price, acting CEO of NSX, commented: “Market commentators are in broad agreement that cash equity exchanges are facing a global technology revolution which is challenging legacy methods of clearing and settlement. Having patiently monitored the development of the appropriate technology and know how we consider that this is the right time for the NSX to act.”
“The ClearPay joint venture with iSignthis allows the NSX to expedite its plans to transform its licensed exchange market within a cost-efficient framework. The introduction of an already experienced provider of RegTech and payments systems is very satisfying for us as it allows an accelerated build process.”
“More exciting is that it creates a solid foundation for the NSXA to be a true independent first-class venue of choice for companies seeking to be serviced via the most advanced infrastructure and distribution in their goal of attracting investors from both here and abroad.“
Leading the joint venture will be Karantzis, who will act as the CEO of ClearPay during the software development stage. Once the technical and business development has been completed, the NSXA will operate the platform.
iSignthis and ASX
As Finance Magnates reported, iSignthis has been suspended from trading indefinitely since October last year, as the ASX and the Australian Securities and Investments Commission (ASIC) complete their inquiries as to the nature of its revenue and contracted service fee revenue, following volatility in its share price.
In response, the payments identity solutions provider sued the ASX in the Federal Court. iSignthis alleges that in suspending the company from trading, the market operator had breached its own rules and the Corporations Act.