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Shares in the National Stock Exchange of Australia (NSXA, ASX: NSX) surged 380 per cent in early trading to reach $0.33 after announcing a platform pitted by its creators as an "Australian NASDAQ" would be up and running early next year.
The investor excitement pushed NSX shares to their highest level since 2007, but within 25 minutes the daily growth had subdued to 130 per cent at $0.20 per share.
After trading finished yesterday, the minor stock exchange operator - whose market capitalisation is barely a blip on the ASX - made two announcements relating to its technology partner iSignthis (ASX: ISX).
The Melbourne-based payment identity verification group has close to an 18 per cent stake in the NSX and its CEO John Karantzis is also the new head of the market operator.
In parallel, iSignthis has been suspended from trading on the ASX for more than a year, triggering a bitter legal dispute and threats to leave the country's leading stock exchange altogether.
The suspension was prompted by the ASX's concerns over performance rights given to iSignthis executives, and questions have continued to be raised about regulatory compliance, the nature of its international customers and why its processing to Visa network merchants were suspended in March.
What the suspended ISX shares would be worth right now is anyone's guess, but the market is clearly bullish about what the company aims to achieve with a same-day settlement trading platform.
Yesterday the NSX reported it was working towards integration of its own internal Digital Exchange Subregister System (DESS) with the Distributed Ledger Technology (DLT) being built by iSignthis subsidiary Probanx Solutions.
"The platform incorporates the NASDAQ trade matching engine, in addition to the DESS, and in future, the ClearPay Delivery versus Payments platform and the Paydentity KYC platform from iSignthis," the market operator said.
"The NSXA is in consultations with ASIC as to when the DESS can commence service, noting that it is now technically and operationally ready for service to commence data accumulation and writing to the blockchain, contemporaneously with TAS."
The group claims once approvals are in place it would be the world's first Tier 1 exchanges to record transactional trading data to the blockchain.
"Following the consultation with ASIC (and any approvals), the commissioning of DESS will mean that NSXA will be able to independently store trading data and create its own user records, in order to provide issuers, registrars, participants and other parties access to the blockchain data, on a permissions basis," NSX said.
"The DLT will also in future be used to confirm trades, transfers, and manage tracking (by identity) of trades. The DLT will allow for elimination of dark pools, as well as allow NSXA to satisfy AML/CFT requirements by running PEP/Sanction screening on trades in real time using the buyers and sellers' details."
The NSX also noted DESS was expected to be integrated with the iSignthis Paydentity system early in the 2021 calendar year, which would provide compliance with AML/CFT Regulations with regards to customer due diligence and electronic safeharbour.
"As a result of this integration, the unique remote Know Your Customer (KYC) system means that NSXA will be in a position to comply with the terms of its license for products not cleared via a licensed clearing and settlement facility, and ensure that each party to a transaction is able to be notified of the other party," the group said.
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