By Adwitiya Srivastava

(Reuters) -Australia's corporate regulator on Tuesday approved Cboe Global Markets' ( CBOE ) application to operate as a listing market in the country, enabling it to compete directly with the Australian Securities Exchange (ASX) and others.

Shares of bourse operator ASX fell as much as 1.7% to A$57.850 in early trade, to hit its lowest level since mid-June 2024.

Cboe Australia, the local unit of the Chicago-headquartered operator, launched in 2011 and can now list new companies, offering domestic investors increased access to investment options such as initial public offerings and dual-listed foreign entities.

"This move will provide more choice for companies to list in Australia, build more links to offshore markets and create more options for investors," ASIC Chair Joe Longo said in a statement.

Cboe did not immediately respond to request for comment.

Heightened competition in Australian equities markets has already led to reduced trading costs and broader access to products like exchange-traded funds (ETFs), the regulator highlighted.

Cboe Australia currently has 20% of Australia's equity market turnover, representing almost A$2 billion ($1.32 billion) of trades each day, ASIC said.

"Cboe Australia's new listing powers could force the ASX to sharpen its pencil when it comes to fees, so any lowering of trading costs would be a positive outcome for consumers," said Tim Waterer, chief market analyst at KCM Trade.

"Albeit that this could be a gradual rather than instant process."

The move comes amid ongoing regulatory scrutiny of the ASX's ability to maintain stable and secure market infrastructure.

In June, ASIC launched a broad investigation into the country's main stock exchange operator, following years of tension over a failed software upgrade and recurring trade-processing glitches.

Following this approval, there are now four markets, including Cboe, licensed to list securities in Australia, ASX, National Stock Exchange of Australia (NSX) and Sydney Stock Exchange (SSX), the regulator said.

($1 = 1.5119 Australian dollars)