Cboe Global Markets has received regulatory approval from the Australian Securities & Investments Commission (ASIC) to operate stock listings in Australia, challenging the dominance of the ASX.

Already handling about 20% of Australia's equity market turnover, roughly $2 billion worth of trades daily, Cboe is now the fourth approved market operator in the country, joining the ASX, National Stock Exchange, and Sydney Stock Exchange.

ASIC's move aims to boost market participation and international competitiveness by expanding listing options, including foreign companies and IPOs, to support Australia's economic growth.

This approval comes amid heightened regulatory scrutiny of the ASX following a failed technology upgrade and concerns over governance and risk management, which caused ASX shares to decline 1.6%.

The recent problems faced by the ASX, including issues with its clearing and settlement platform, have prompted investigations into its governance and operational resilience.

Regulators, including the Reserve Bank of Australia and ASIC, are investigating the ASX's vulnerabilities and market stability, with ongoing probes into its ability to maintain secure infrastructure.

Recent comments from the RBA indicate that significant work remains for the ASX to address deficiencies and improve its resilience amid regulatory concerns.

Despite generating about 20% of its revenue from listings, the ASX faces challenges such as aging technology, governance issues, and regulatory pressures, which have impacted its share performance globally.

Following ASIC's approval of Cboe, the ASX's shares dropped nearly 2%, reflecting investor worries about its recent struggles and regulatory scrutiny.

This development occurs against a backdrop of ongoing criticism of the ASX, which has experienced regulatory investigations, market outages, and notable trading errors, including a $400 million loss involving TPG.

Industry experts note that the ASX's entrenched monopoly and its importance to local indices will make it challenging for Cboe to attract large Australian companies.

Meanwhile, Australia's IPO market is showing signs of recovery after a slowdown caused by COVID-19, with recent IPOs like Virgin Australia, Gemlife Communities, and DigiCo Infrastructure Reit.