Dark liquidity and high frequency trading
Review of high-frequency trading and dark-liquidity
On 26 October 2015, we released Report 452 Review of high-frequency trading and dark liquidity (REP 452) which updates and builds on our earlier analysis of equity markets and assesses the effect of high-frequency trading on the futures market. This report is the result of analysis by two internal ASIC reviews.
Information Sheet 209 summarises the findings in REP 452 and what they mean for investors and listed entities.
Review of dark liquidity rules
On 19 May 2014,we released the results of a review of rule changes affecting ‘dark trading’ and their impact on market quality. Report 394 Review of recent rule changes affecting dark liquidity (REP 394) indicates the trends in dark liquidity that were of some concern have discontinued.
Market integrity rules released
On 12 August 2013, we released market integrity rules on dark liquidity and high-frequency trading, following extensive internal analysis and consultation with industry.
These final rules aim to improve the transparency and integrity of crossing systems and strengthen the requirements for market participants to deter market manipulation. The rules will come into force in stages over nine months.
We have also released guidance on the rules which clarifies ASIC’s expectations of market operators and participants, and a report on submissions made on the proposed rules.
Earlier refinement of proposals
On 18 June 2013, we released refinements to the proposed rules on dark liquidity and high-frequency trading, following extensive consultation with industry. We decided not go ahead with proposals to rest small orders on the market for a set time or for dark orders to meet a minimum size.
Report of the dark liquidity and high-frequency trading taskforces
On 18 March 2013, we released Report 331 Dark liquidity and high-frequency trading (REP 331) and Consultation Paper 202 Dark liquidity and high-frequency trading: Proposals (CP 202), examining the impact of dark liquidity and high-frequency trading on Australia’s financial markets. These publications were the result of analysis by two internal ASIC taskforces.
Information sheet 178 summarises the findings in REP 331 and what they mean for investors and listed entities.