The Australian government has prohibited a planned merger of the Australian and Singapore stock exchanges.
Treasurer Wayne Swan said he believed it is in the national interest to keep the ASX in Australian hands and made the decision following unanimous advice from the Foreign Investment Review Board.
Singpaore's stock market was making an $A8 billion bid to swallow the Australian Securities Exchange and is the first takeover to be blocked in Australia since 2001, the ABC reports.
Mr Swan said the deal is not in the national interest, partly because it would hand Australia's only operating sharemarket to a direct regional competitor in the financial services sector.
"Becoming a junior partner to a smaller regional exchange through this deal would risk us losing many of our financial sector jobs."
Mr Swan said the deal offered little benefit to the Australian economy, but is leaving the door open to consider future bids.
The process had brought to light the need to look at improving financial regulations, he said.
Analysts were divided over whether Mr Swan's decision to block the bid by the Singapore Exchange would damage Australia's financial reputation in Asia, the ABC reported.
The proposed takeover would have required a change to the ownership restriction on the ASX, capped at 15% at present, which would have needed parliamentary approval.