The Foreign Investment Review Board has told the Australian and Singaporean stock exchanges that Treasurer Wayne Swan will reject the proposed merger of the two bourses because it is contrary to the national interest.
Both the ASX and SGX said it would continue dialogue with its counterpart on possible other forms of co-operation or consolidation.
"The ASX board maintains a strong belief in the need for ASX participation in regional and global exchange consolidation," an ASX statement said.
"This, together with the business logic of the combination proposal announced with SGX on 25 October 2010, resulted in the ASX board unanimously recommending the ASX-SGX merger proposal to ASX shareholders.
"In this context, ASX will continue to evaluate strategic growth opportunities, including further dialogue with SGX on other forms of combination and co-operation."
The Singapore exchange said it had been invited to provide further comments to the FIRB and would consider an appropriate response.
"SGX, as the Asian gateway, is well-positioned to leverage on opportunities within Asia's vibrant and dynamic economies," Singapore Exchange said in a statement.
"We will continue to pursue organic as well as other strategic growth opportunities, including further dialogue with ASX on other forms of co-operation."
In October 2010, the government-owned SGX announced an $8.4 billion takeover of the ASX.
