Australian traders are betting their future on Elmer Funke Kupper, the ASX’s new chief executive who’s determined to keep Asia’s fourth largest stock exchange competitive.
Appointed CEO of the ASX in August 2011, the former Tabcorp boss (who some wags suggest has moved from one form of gambling to another) has already left a lasting impression on the high rollers associated with the market.
He sits atop a bourse that oversees an average 653,000 trades worth approximately $4.8 billion every day. But with the exchange’s typical monopoly on the securities market over – thanks to the entry of a second exchange, Chi-X, in October last year – Kupper’s upping the ante and chasing more.
The 46-year-old Dutchman has already lowered ASX trading fees, launched a new product range and announced proposals to relax certain regulations associated with listing. He’s even suggested extending Australian trading hours from 4pm to 6pm – to create an overlap with Asian markets.
As the ASX board knew when they made the surprise appointment eight months ago, taking a punt on a fresh-faced, relatively young CEO was the exchange’s best bet to find new relevance after the Treasurer scuttled its $8 billion proposal to merge with the Singapore Exchange last year.
Kupper’s lack of exchange experience originally came as a concern to watchers when he was first announced as the ASX chief. Opinions changed when he demonstrated just how well he can crisis manage the high stakes associated with financial services technology. He was just a few weeks into his new job when a major computer glitch ground the ASX to a four hour halt.
Kupper immediately leapt on to the blower. “He got on the phone to the heads of these places [affected] and said ‘this is what happened, we’re working on it’,” says one industry veteran. “His predecessor would never have done that”.
He’s long proven himself adept in a crisis. As a risk manager at ANZ during the late 1990s, Kupper steered the bank through the Asian financial crisis and was later viewed as former ANZ boss John McFarlane’s likely successor. That never happened, and Kupper made his way into the even higher stakes world of Tabcorp.
Tall, lean and to the point, the man with the best sounding name in business is a former ANZ senior executive who arrived at Tabcorp in 2007 and successfully led its de-merger into the gaming company and its casino arm, Echo Entertainment. He left the business in June 2011, but was lured out of a six month sabbatical to take the helm of the ASX in August.
Kupper was not available for interview for this profile, but via a written statement he dismissed our suggestion that he’s fast becoming one of the country’s most powerful CEOs. Instead, he said he sees his role is “to work with clients and convince its many stakeholders and regulators”. Convincing them of what, he doesn’t elaborate.
Our guess is that he’ll be further using the technology background he was credited with when first appointed to make the ASX a more appealing exchange to work with, to improve backup systems and latency times. He’s already launched a new high-speed data centre, and appointed former Credit Suisse Canada CIO Tim Thurman, to help.
He’s also addressing what’s known as the “dark pools” of the exchange, where powerful computer systems are deployed to manage high-volume trading that occur off-market via sophisticated algorithms, and away from the regular rules of the “lit” market.
Kupper is clearly working to tackle a lack of transparency surrounding these dark pools and how their growing volume of transactions impact overall financial markets. And he’s getting in the ear of the regulators: pitching for them to adopt a minimum trading limit for those using such systems, a change which would bring in more revenue for the ASX.
The official line is that outside of work Kupper enjoys golf, tennis, modern art, European history and jazz. But we’re told by sources that he doesn’t mind a flutter on the thoroughbreds either.
His next gamble could be to show up his predecessor and bring a palatable deal to the negotiating table for merging the ASX with an Asian-based cousin, disintegrating all memory of the failed Singapore bid.
In the media, he’s made few secrets of the benefits that such consolidation could bring, although he told a recent Stockbrokers Conference that there was “nothing to talk about” regarding a possible regional deal just now.
Our bet’s on that changing in the future.
This article first appeared on The Power Index.