iSignThis-ASX Federal Court conflict heats up with $4.2m investment in ASX rival

Despite having been suspended from trade on the ASX (ASX: ASX) by the market operator, fintech company iSignThis (ASX: ISX) is making waves with a strategic $4.2 million investment in the National Stock Exchange (ASX: NSX), a rival market operator to the ASX that domiciles a smaller number of listed companies. 

The investment gives iSignThis a 12.96% stake in the NSX with iSignThis CEO John Karantzis keen to leverage iSignThis’ technology to “develop an Australian version of Nasdaq, and become a competitive alternative to the ASX.” 

“We are delighted to be a strategic shareholder in the NSX, which operates NSXA, Australia’s second-largest Tier 1 market operator. 

“We are excited to be working together with NSX to develop a platform that will significantly increase NSXA’s attractiveness to the broking and investment banking community, as well as private organisations that intend to go public via IPO.” 

The investment was made via a private Placement with iSignThis purchasing stock at $0.145 per share which led to a 133% jump in NSX’s share price to close yesterday at $0.21, having previously closed at $0.09. 

“We are pleased that ISX will be investing in NSX so as to realise the opportunity to build this platform which will enhance our existing business and provide a greater range of services to listed entities, participants and other potential users of financial markets infrastructures,” said NSX Director, Tom Price. 

The strategic investment comes at an interesting time for iSignThis which has been suspended from trade since 1 October 2019 by the ASX whilst the company is under investigation from the Australian Securities and Investments Commission (ASIC). 

Whilst ASIC has confirmed they did not request the suspension from trade, iSignThis remains suspended from trade by the ASX, which has prompted the company to commence Federal Court proceedings against the exchange. 

The premise of ASIC’s investigation into iSignThis revolves around continuous disclosure at the request of the ASX. iSignThis vigorously defends their actions and have released a number of letters to shareholders detailing their compliant actions and Karantzis’ credentials. 

The NSX releases daily statistics on trades executed via the exchange. For the month of January 2020, a total of AU$185,287 worth of shares was traded, at an average of 1.7 trades per trading day, and AU$4,751 per trade.