iSignthis drops $1m on NSX shares to further rival ASX

Written by Ruby Hinchliffe
2nd June 2020

iSignthis, the Australian identity, payments and e-money solution, has increased its stake in the country’s second largest stock exchange, the National Stock Exchange of Australia (NSX).

Earlier this year, iSignthis made a 12.96% strategic investment in NSX Limited, the operator of NSXA. The company’s subsidiary Probanx Solutions has bought another 16.5 million NSX shares at AUD 9.1 ($6.1) each, costing it AUD 1.5 million ($1 million).

In March, iSignthis’ CEO John Karantzis was appointed CEO and managing director of NSX

In February, the identity company teamed up with the NSX to develop Clearpay, a new venture based on distributed ledger technology (DLT) which will compete with the Australian Securities Exchange (ASX), the country’s largest stock exchange.

Probanx Solutions is developing the solution under a AUD 4.5 million contract with ClearPay and the NSXA, with the long-term goal of inter-operating with the existing NASDAQ trading engine, as well as other trading exchanges around the world.

iSignthis’ decision to work with an alternative exchange like the NSX follows its suspension from trading on the ASX’s platform last October. The company has since lost a round of court battles against the ASX in its effort to lift the suspension, which was imposed because the ASX suspected iSignthis to be involved with dubious contracts and illegitimate performance shares.

In March, John Karantzis, managing director and CEO of iSignthis, was appointed as NSX’s new CEO and managing director. By digging its roots further into the NSX, iSignthis becomes more of a serious direct competitor to the ASX.

“This strategic initiative put[s] us squarely in competition with the effective monopolist incumbent, the ASX,” says iSignthis

Currently, iSignthis holds a 59.0% stake in the ClearPay venture with the NSX, which holds the remaining interest.

iSignthis notes in a statement that it will consider “acquisitions of competitors and complementary businesses” going forward. It is also actively looking at opportunities in the “operation of payment processing facilities”, which “may require the company to apply for and hold financial or prudential licenses in jurisdictions where it intends to operate”.

Since 2016, the company’s strategy has been to deliver an identity, payments and transactional banking platform to licensed brokers, security dealers and participants.

It says its applications to the Reserve Bank of Australia (RBA), the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investment Commission (ASIC), submitted since 2018, have been undertaken “directly in support” of this strategy.

“This strategic initiative put[s] us squarely in competition with the effective monopolist incumbent, the ASX,” the company said last week.