The Australian Securities Exchange has been around for over 30 years, with its origins dating back to 1987. It was formed after the Australian Parliament decided to amalgamate six independent state-based stock exchanges that had been established in state capitals. While the Australian Securities Exchange itself is a comparatively recent creation, the six state-based stock exchanges that formed it date back to the nineteenth century: Sydney (1871), Hobart (1882), Melbourne (1884), Brisbane (1884), Adelaide (1887) and Perth (1889).
The first interstate conference between these six separate exchanges was held all the way back in 1901, and after that they met on a relatively informal basis until 1937. In this year, the Australian Associated Stock Exchanges (AASE) was formed with representatives from each state exchange. The AASE went on to create various listing rules, broker rules and commission rates that all of the separate exchanges followed.
Trading on the AASE was generally conducted by a call system. This involved an exchange employee calling out the names of each company, upon which brokers would bid and offer on each. In the 1960s, the call system was switched for a post system, in which “chalkies” would write bids and offers on chalkboards.
In 1976, the Australian Options Market opened, trading call options. Then, by 1980, the previously separate Sydney and Melbourne stock exchange indices joined to form the Australian Stock Exchange Indices – an event that many believe to be the starting point of the modern day Australian Stock Exchange. By 1984, brokers’ commission rates were deregulated, which allowed competition to gradually lower commissions.
This culminated in 1987 with the formation of the Australian Securities Exchange (ASX). This event officially took place on 1st April 1987 under legislation of the Australian Parliament. The previous forms of trading (the call system and the post system) were replaced by the Stock Exchange Automated Trading System (SEATS). While this system started with a limited range of stocks being introduced, the number was able to gradually increase until 1990, when trading floors were consequently able to be closed and trading activities moved fully onto the automated system.
