ASIC Market Supervision Update issue 18
As part of its ongoing and regular market surveillance, ASIC has become aware of several stockbroking account intrusions involving unauthorised access and trading. ASIC has advised online stockbroking firms and their clients to review their account security as a matter of urgency.
In particular, ASIC recommends that users of online stockbroking accounts should ensure that their computer virus software is up-to-date, change their passwords, and check their transaction history. This should be done regularly, as would be advised with bank accounts, and we encourage brokers to regularly remind their clients of the importance of the above measures in preventing unauthorised access and trading.
ASIC continues to work closely with online stockbroking firms, in particular to assist those clients that have been impacted by unauthorised access and trading on their accounts. Firms are also encouraged to assess the adequacy of the security provided for their online accounts.
Market supervision and competition cost recovery – new billing arrangements for ASX and Chi-X participants
As of 1 January 2012, a new market supervision fee model and cost recovery arrangement is in force to allow the recovery of costs from market operators and participants (ie. stockbrokers) for the supervision of Australia's equities markets.
The new cost recovery regime, which was developed by Treasury and ASIC in consultation with industry, complies with Australian Government cost recovery guidelines. It will see the additional expenditure incurred by ASIC in relation to the cash equities markets from 1 January 2012 to 30 June 2013 recovered from ASX, Chi-X and their participants. In the past, the ASX supervised the market and recovered its costs through the fees it charged to market participants. As ASIC is now responsible for market supervision, it will recover those costs through market operators and participants directly.
ASIC's supervisory costs in relation to participants of the ASX and Chi-X cash equities markets for the 18-month period, including the deferred costs associated with implementing market competition, are $22.81 million. The costs will be proportionally allocated to each participant to reflect the different drivers (ie. IT and non-IT costs) and based on the number of messages and the number of transactions . Participants will be charged quarterly in arrears, with ASIC sending invoice statements to each participant by post within 10 calendar days after the end of each billing period.
Further details on the process, including information on when payments will be required, the calculation of the quarterly fee, payment methods available and further background information can be found on the ASIC website.
ASIC takes this opportunity to thank industry for its contribution in the consultation process leading up to this change.
ASIC Market Supervision Report: July to December 2011
On 7 February, ASIC released its third report on the supervision of Australian financial markets and market participants, available here (Report 277 ASIC Supervision of markets and participants: July to December 2011 (REP 277)).
From a surveillance perspective, the report identified a drop of more than 3,000 in trading alerts compared to the previous period. This was partly brought about through improved calibration of alert parameters to generate more targeted alerts and eliminate 'false positives'. The period saw 23 matters referred for investigation, six involving potential insider trading , five market manipulation matters, nine possible breaches of the market integrity rules and three matters concerning continuous disclosure obligations. In addition, a further four matters referred for investigation were identified during ASIC's participant surveillance visits. Underlining the importance of these visits, two matters related to possible breaches of market integrity rules, one misleading and deceptive conduct and one matter related to inappropriate advice.
ASIC's Deputy Chairman Belinda Gibson made specific reference to the fact that since ASIC took on responsibility for market supervision, there has been a significant reduction in the time taken to commence investigations into suspicious market conduct. ‘Of the 75 market matters referred for investigations since ASIC assumed responsibility for market supervision in August 2010, 26 were referred within 30 days of identifying the possible misconduct, with a total of 54 out of 75 referrals made in less than 60 days,’ she said.
The full report is available on the ASIC website.
Market participants should contact ASIC for market integrity issues and ASX for operational issues. Contact ASIC’s Market and Participant Supervision group on 1300 029 454 and you will have these voice menu options:
- Option 1 for real time market matters
- Option 2 for other market related matters
- Option 3 for Participant enquiries or matters
- Option 4 for Market wide announcements.
Or you can reach the Market and Participant Team by email firstname.lastname@example.org, or through your relationship manager.
For more information
Please see www.asic.gov.au/market-supervision.
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ASIC's Market supervision update is a periodic eNewsletter from the Australian Securities & Investments Commission, 100 Market Street, Sydney, NSW, Australia, 2000. You are receiving this because you asked to be put on the mailing list.
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