AESX provides a comprehensive infrastructure as described in this briefing that
allows independent territories or niche markets to operate a low cost “micro”
exchange. The term micro is adopted to differentiate AESX from high cost
traditional exchange structures. Solutions are offered to any operation that
has an established income stream that will allow them to offer wider public
participation, but only through professional intermediaries.
In addition to very low operating costs and extremely efficient procedures, participants benefit from the consolidation of interests into a common marketing medium, meaning that many small markets become visible as one big “alternative” market.
The market is regulated through application of self regulation enforced by the compulsory registration of all market participants whomust prove, and subsequently maintain, criteria that demonstrates that they are “fit and proper” persons. In addition to institutional participants, suitably qualified professional investors may register who meet the relevant conditions. Their authorization to trade on markets is subject to the confirmation of the individual territory or instrument concerned.
AESX provides a truly “electronic” environment in which all aspects of: (i) administration; (ii) reporting; and (iii) trade settlement are managed by the proprietary application software. All traded stock has to be in a nominee holding, no sales can take place if there is not a supporting holding, and cash must be deposited before a trade can be executed. This represents the major difference between AESX and a conventional exchange, in that there is no cost of credit, there can be no short selling, stock lending etc. and duration of settlement becomes T=0.,
The financial structure is designed to make each
“micro-exchange” viable, based on listing charges. This removes the traditional
dependence on transaction volume, bearing in mind that many investments will be
held long term. Order driven matched bargains are the trading method, but it is
accepted that many markets will be naturally illiquid, with prices driven by
the yield on the instrument.