Yesterday ASX-listed payment identity verifier iSignthis announced it had paid A$1.5 million to increase its stake in National Stock Exchange of Australia Limited.
The private placement was made via the ISX subsidiary Probanx Holdings Ltd at a price of 9.1 cents per share. This means iSignthis has been allocated another 16,483,517 shares, and takes its shareholding in NSX from just under 13 per cent to 17.66 per cent.
In a note to shareholders, John Karantzis, speaking as managing director of iSignthis, reiterated his view that the digital ledger technology his company was offering to the NSX via the $4.5 million ClearPay joint venture was "the future for securities trading."
Still in development, ClearPay is intended to be a multicurrency, real-time platform with same-day settlement for trading on the NSX. (Karantzis is also chief executive officer of NSX.)
"In my view, Australia needs a 'junior' exchange, not only for competition, but also to provide an alternative to the messy ‘reverse takeover’ model that is prevalent at present," Karantzis wrote in a note to investors.
"Instant payments with integrated instant notifications will be critical to this," he said.
"Our investment in the NSX is consistent with this, in order to be able to influence the technology, and provide a reference site with a Tier 1 market operator in a well-regarded jurisdiction.
"Once our Australian licensing is completed, this key feature will be made available to Australian brokers and retail participants."
This is where iSignthis has been stranded, with licence applications to the Reserve Bank of Australia, APRA and ASIC all seemingly on hold since 2018, and its ASX shares in a trading halt since October 2019.
"This strategic initiative put us squarely in competition with the effective monopolist incumbent, the ASX," Karantzis has asserted. He has alleged that the ASX is misusing its market regulatory powers to selectively release negative information on iSignthis.
"It is more than unfortunate that our reputation, together with our license applications to the RBA, APRA and ASIC have clearly been impacted by the action taken by the incumbent monopolist the ASX," he said.
Meanwhile, the company’s application to ASIC under the Corporations law, where iSignthis asserts that it is a competitor to the ASX and hence it is being unfairly treated, has been 'under consideration' for several months now.
Karantzis is keen to get back to business, as the rise of neobanks and alternative market operators globally provide the Company with further opportunity.
"I am hopeful that with some normalcy returning post the height of COVID, that ASIC will be able to revert on the application either way, and we can evaluate our next steps," Karantzis said.