Patrick Salis

There are opportunities for growing Australian investor access to a more diverse range of fixed income investments.

While a range of bond and fixed income exchange traded (ETF) funds are already accessible on platforms along with some listed bonds on the ASX – wholesale trading platform AUSIEX, which recently acquired FIIG (Fixed Income Investment Group) – believes Australian investors are underweight bonds and that more can be done to increase direct investment.

“An expanded bond market presents a significant opportunity for bonds to play a larger role in Australian investors’ portfolios as well as in the wider economy,” says Patrick Salis, CEO of AUSIEX.

Mr Salis notes there are two major demographic trends that can be helped by better adoption of bonds in local investment portfolios, particularly for retirement phase accounts:

1. As the Baby Boomer cohort retires, preservation of capital while still maintaining a steady return above the rate of inflation (income) becomes an important need. The greater use of bonds in a portfolio is a more optimal solution to this requirement than what can be achieved by relying solely on cash and equities for a given level of risk.
2. As new generations enter the retirement system and they continue to use equities and new assets including ‘crypto currencies’, bonds can be used to balance the higher volatility of these assets in this cohort’s investment portfolios.

Mr Salis believes making bonds available on the platforms investors and advisers use every day is a critical part of improving access to this important asset class.

He adds, “We see the opportunity as in a sense similar to the early ‘E*TRADE era’ in the United States – when online platforms first made equities directly available to retail investors. Just as E*TRADE and the platforms which followed helped democratise equity investing globally, we believe this can also be done with fixed income investments, especially with the phasing out of hybrids from the local market.

“While fixed income solutions are increasingly available on platforms, an alternative way to improve access to and drive awareness and education on bonds is to enable direct investment in bonds. FIIG provides access to the primary market and a secondary market to investors and advisers in small parcels that are within reach of all Australians.”

Mr Salis adds AUSIEX is committed to supporting this initiative. “AUSIEX, for example, can combine our scale and technological know-how to work with industry partners, dealer groups, advisers and our wrap clients to make the vast over-the-counter bond market easily accessible to advisers and investors.”

“This will include ongoing investment in the AUSIEX platform which, via its recent FIIG acquisition, is now one of the most comprehensive investments trading and portfolio administration platforms in the country today.”

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Nomura Research Institute, Ltd. (NRI) is pleased to announce that AUSIEX has entered into an agreement with FIIG Holdings Limited (the holding company of FIIG Securities Limited) to acquire 100% of FIIG’s issued shares and commence the process of making it a wholly owned subsidiary of AUSIEX by the end of June 2025.

AUSIEX joined the NRI Group in May 2021 and provides a market leading wholesale trading platform and outsourced service for execution, clearing and settlement of domestic and international cash equities, and exchange traded options as well as portfolio administration.

The AUSIEX platform is built using proprietary software, including NRI’s I-STAR/GV back-office solution. AUSIEX provides value-added services to major financial institutions, financial advisers, family offices, institutional investors, self-managed super funds and other wholesale and HNWI investors in Australia.

FIIG is Australia’s largest specialist fixed income provider with over $4.5bn of funds under advice and provides investors with direct access to bond markets and a range of term deposits and other cash solutions.

AUSIEX CEO Patrick Salis says the transaction will allow the AUSIEX business to expand its range of products and services to meet the wider needs of traders, advisers and investors.

“With this move, AUSIEX expands beyond exchange traded instruments listed on ASX & CBOE, to now also include over the counter (OTC) domestic and international fixed income products via the FIIG platform.

“It will provide local institutions, financial advisers, family offices, SMSF and HNWIs with the most comprehensive investments trading and portfolio administration platform offering in the country.”

Mr Salis adds, “We are excited to build on an over 25-year legacy of FIIG, an independent company founded in Brisbane and welcome their staff into the NRI Group. FIIG has over 6,000 clients, and we are pleased to extend the AUSIEX vision to each of those clients of being a trusted partner behind every trade and transaction.”

Mr Salis, further says, “Our vision is to bring fixed income investing to all Australians and there are two pieces to that – education and access. We want to make trading bonds as easy as buying and selling BHP shares on the ASX.

“This development is another sign of AUSIEX’s progress towards our long-term plan to become a market utility platform leveraging NRI’s scale and intellectual property.”

FIIG CEO Alex Welch adds, “This acquisition brings together two culturally and commercially aligned businesses with highly complementary strengths.

“It marks an exciting step forward in our ambitions to make bonds accessible to Australian investors while continuing to enhance the services we deliver to our clients with even greater capabilities.”

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​While there is increasing investor interest in private markets, listed public capital markets remain the primary forum to raise capital, provide liquidity and price transparency for companies and investors, notes the nation’s leading wholesale listed markets trading platform.

“One measure of whether equity capital markets are performing this role effectively is whether public company listings are growing in line with the growth in company and capital formation,” says Patrick Salis, CEO of AUSIEX.

“ASIC figures show Australians are starting new companies at a solid clip of 4.5% new registrations a year.  Yet, the number of companies listing on public markets is falling. In the five years to 2023, there were just over 160 fewer publicly listed companies compared with 2017.”

That said, Mr Salis notes the pool of potential investment capital – in the form of Australian’s $3.5 trillion superannuation savings – continues to grow at an impressive and consistent annual rate of around 8%, according to Australian Prudential Regulation Authority data.

​Opportunities to improve

Mr Salis recognises two key shifts are now occurring in the Australian economy which present opportunities to better utilise Australia’s public markets.

“One is the well-documented desire from governments to re-engineer the Australian economy away from fossil fuels and towards green energy via the Future Made in Australia Act.

“The second and arguably less widely understood shift, however, is the recent and urgent emphasis toward bolstering Australia’s defence and national security requirements in the face of global challenges,” he says.

“These initiatives are a source of real goals and real projects. The AUKUS agreement, for instance, commits Australia to $368 billion of projected expenditure into the mid-2050s. A raft of other programs announced focus on future-orientated industries such as energy transition technology, artificial intelligence, cyber, hypersonic capabilities and quantum computing as well as re-homing other advanced manufacturing capabilities to rebalance our economy.”

“These changes have created an increased willingness to find ways to deploy significant capital into Australian industry. Listed equity markets are one avenue through which they could be pursued,” Mr Salis suggests.

AUSIEX has identified three ways this could occur.

1. Attract companies to list in Australia

To encourage greater participation, groups such as the Stockbrokers and Investment Advisers Association (SIAA) could expand their work with government and participants to build awareness and tools to bring innovators and creators together with capital market participants and institutional customers to understand the rapidly changing manufacturing environment.

Additionally, offshore companies could also be attracted to list in Australia. Around 8% of ASX company listings are outside of Australia, with the largest share in New Zealand and the USA.

​2. Develop more diverse financial structures

AUSIEX also notes that manufacturing, energy, defence, and high-tech industries are capital-intensive and require diverse financial structures and products – and capital.

“Australia has a strong and mature equities market; however, it may be argued that it does not have a ‘mission fit’ corporate bond market,” says Mr Salis.  “Government and regulators have been slowly developing the local corporate bond market, with ASX as a leading participant in the process. However, the fact that ASX itself was recently unable to use its own platform to raise debt shows there is still work to be done.”

3. Revise regulations to foster innovation

Following the failure of ASX’s ambitious re-engineering project, which was shelved in November 2022, the emphasis on technology infrastructure in Australian equity capital markets has shifted from supporting market innovation to sustaining regulatory compliance and stability.

​Mr Salis surmises: “If Australian capital markets do not innovate at the rate of their global peers, who are also competitors, they risk becoming technologically moribund and uncompetitive with opportunities simply going to other markets.

“Stakeholders here need to work together to remove obstacles to market innovation and improve the utilisation of Australia’s public capital markets. This would support growth and wealth creation for future generations of companies and investors.”

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Adam Smith

Leading wholesale trading platform AUSIEX, a part of NRI, has partnered with online trading and investment specialist Saxo Australia to deliver an integrated international trading solution for financial advisers.

AUSIEX said that the wide-ranging partnership will enable financial advisers to directly trade and own international equities and exchange-traded funds (ETFs) across multiple markets and in multiple currencies.

AUSIEX Chief Executive Officer (CEO) Patrick Salis said: “After an extensive search, we are delighted to announce we are collaborating with Saxo, a global leader in international trading solutions, to leverage their proven technology and domain expertise and jointly deliver a highly scalable, ‘best of breed’ international trading solution for advisers.”

Mr Salis added: “Our aim is to complement and enhance our capabilities as a proven wholesale trading platform, and ensure it continues to be a leading solution for advisers, brokers and self-managed superannuation funds (SMSFs) by not only enabling advisers to trade international equities alongside domestic securities, but also benefit from integrated news and research, trading tools and reporting capabilities.”

Mr Salis concluded: “This partnership will help Australian advisers better service investors, strengthen their client propositions, and improve practice efficiencies.”

Saxo Australia CEO Adam Smith said: “Saxo Australia is delighted to support AUSIEX’s expansion into international equities markets. Like AUSIEX, Saxo Australia is an Australian broker backed by a global financial powerhouse, and we anticipate this being the start of a long and fruitful partnership.”

Mr Smith added: “It’s never been more important for investors to diversify their holdings across geographic regions and asset classes. Saxo Australia’s partnership with AUSIEX will enable financial advisers to do just that for their clients, using market-leading, user-friendly investment technology and infrastructure.”

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