iSignthis lifts stake in NSX, squares up against "monopolist incumbent" ASX
28 May 2020, Written by Matt Ogg
Within days of reprobation from the Australian Stock Exchange (ASX: ASX) over its response to a suspension with Visa, payment identity verifier iSignthis (ASX: ISX) has today increased its holdings in the National Stock Exchange of Australia (ASX: NSX).
Both iSignthis and the NSX are led by John Karantzis (pictured), who for months has been in a war of words with Australia's largest stock market operator.
iSignthis took a 12.96 per cent stake in the NSX in February via a $4.2 million private placement, and today it announced a further $1.5 million was invested to take the share up to 17.66 per cent.
The sum represents half of a $3 million capital raise undertaken by the NSX, aimed at technology upgrades, working capital, marketing and potentially further investment in NSX's ClearPay JV with iSignthis.
Still in development, ClearPay is intended to be a multicurrency, real-time platform with same-day settlement for trading on the NSX - an idea Karantzis has described as an "Australian version of NASDAQ".
While the funds were raised at 9.1 cents each per NSX share, representing a 17 per cent discount to the last trading price, they have surged by more than a quarter today to hit 14 cents each.
The new funds are short of the threshold that would trigger an additional 9 per cent investment in ClearPay from the NSX, so iSignthis continues to hold its 59 per cent share in the venture.
In the release, iSignthis noted Australia's cash equity market was dominated by an effective monopoly, in both equities and other securities trading, in addition to the clearing and settlement of trades.
"iSignthis' strategy since 2016 has been to deliver an identity, payments and transactional banking platform to brokers, security dealers and participants, that hold appropriate licensing," iSignthis said.
"Our applications to the Reserve Bank of Australia (RBA), the Australian Prudential Regulatory Authority (APRA) andthe Australian Securities and Investment Commission (ASIC) since 2018 have been undertaken directly in support of this strategy.
"This strategic initiative put us squarely in competition with the effective monopolist incumbent, the ASX."
The acquisition of new shares in the placement was formally undertaken by iSignthis subsidiary Probanx Holdings, an entity that has a $4.5 million contract with ClearPay to develop its Delivery versus Payment (DvP) Digital Ledger Technology (DLT) solution.
"ClearPay and Probanx will be able to bring the DLT technology to other exchanges around the world, with the advantage of a converged solution for identity, payments and monitoring," the company said.
Speaking as managing director of the NSX, Karantzis said the exchange was "delighted with the support from existing and new shareholders during this difficult time".
"The result ensures that the Company will be able to act upon the projects as previously advised to shareholders except for the additional investment into the ClearPay joint venture," he said.
"I wish to thank Justin Klintberg and Tom Gunnerson of KG Capital Partners for their role in the capital raising."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg