Annual Report to Shareholders 2021
From a financial performance perspective, it is pleasing to show that revenue from ordinary activities was up by 7.8%, and the audited loss was down 33% compared to the previous financial year. This is a result of our cost control program and heavy focus on new business generation during the year.
To achieve this and future financial results, I am tasked with overseeing the implementation of the strategy as approved by the Board. In broad terms, that strategy is two-fold:
1. To continually improve the performance of NSXA driving the business toward profitability. This will be achieved by more upgrades to our systems, to make us more efficient and easier to do business with, and by growing the number of participants, nominated advisers and issuers on the exchange through continued marketing; and
2. To build the ClearPay Joint Venture so that it complements the NSXA business and can be in a position to provide its services to other exchanges.
The work is ongoing, but to achieve progress with this strategy over the last year the Company has:
1. Provided clarification on entry level models for issuers to apply. It has done this through engaging potential issuers on its business pipeline and also with Nominated Advisers who provide services to issuers and therefore are a source of referrals to NSXA.
2. Reviewed and streamlined our engagement process with customers to provide faster turnaround on their questions and applications.
3. Employed webinars with NSXA stakeholders to provide education about the opportunities with NSXA rules and application requirements.
4. Attracted additional Participants like Morrison Securities, Taylor Collison, Euoroz Hartleys and the online trading platform Marketech to provide additional trading venues for issuer securities. This will enhance liquidity of listed securities.
5. Completed the Trade Acceptance Service (TAS) implementation which reduces back-office cost for Participants and aligns NSXA clearing and settlement services with other exchanges.
6. Launched the ClearPay Digital Exchange Sub-register System at the same time as the TAS launch,. This means that transactional data from the NSXA trading engine is being written directly to both CHESS and NSX's DESS system managed by ClearPay. There has been no downtime with DESS since launch.
7. Responded to new business opportunities such as the Government request for expression of interest for the operation of a Carbon Exchange, responded to ASIC consultation on crypto backed exchange traded financial products, drafted rules for Exchange Traded Products that will allow open-end funds to list on NSXA.
8. Activated the employee incentive scheme which enables your Company to reward and incentivise staff with performance rights convertible into shares which can allow the Company to manage its working capital efficiently.
In the coming year the main focus of management will be on:
1. Converting the business pipeline in quality listing applications.
2. Enhancing market access with the upgraded NASDAQ trading matching engine which will provide access to new industry connectivity facilities.
3. Review the viability of new listing models and opportunities such as Special Purpose Asset Companies (SPACs), Exhange Traded Products and other financial product classes.
4. Finalising the application for a clearing and settlement licence for ClearPay during the course of 2021 which will include the DESS operations. In the mean-time DESS allows NSXA to retain control of its own transactional data via its own platform and is the first step towards bringing meaningful competition to clearing and settlement services in Australia. DESS uses Distributed Ledger Technology and will accommodate multilateral, multicurrency delivery versus payment functionality.
5. Focussing further on mutual recognition with overseas securities exchanges to allow our issuers more opportunities to dual or cross list.
As we are a service-based Company, the investment in our employees is very important, and I wish to thank all the staff that have worked tirelessly over the past year in what would normally have been a time of change and growth for the Company but also has been overlayed with the consequences of the ongoing pandemic lockdowns.
This annual report provides you with not only information on the Company's financial performance over the year, but also gives additional insights into the strategy, products and services of the Company.
N J ( J O H N ) K A R A N T Z I S
CEO & Managing Director
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About NSX Limited
NSX Limited (ASX:NSX) via its wholly owned subsidiary National Stock Exchange of Australia Limited (NSXA) operates the Tier 1 Licensed stock exchange facility for the listing of equity securities, corporate debt and investment scheme units. The company is also involved in trading and settlement activities.