ASIC Market Supervision Update Issue 7
Timetable for the introduction of competition
On 3 March 2011, The Australian Securities and Investments Commission (ASIC) announced its timetable for the introduction of market competition and released a summary of the intended market integrity rule framework that would apply. The timetable also sets out the steps required for the commencement of operation of Chi-X Australia – the current market licence applicant.
This will give effect to the Government’s policy to support competition between exchange markets in Australia.
ASIC intends to issue the final market integrity rules for competition in April 2011. At the same time, we will inform the market of their operative date which will be sometime later in 2011. A summary of the intended rules is available as a table in our feedback document.
The framework takes into account the comments we received to Consultation Paper 145 Australian equity market structure: Proposals and reflects the minimum rules that we consider necessary for the introduction of competition in Australia (CP 145). We consulted on a number of other important rules relating to broader market structure developments. We intend to further consult with the aim of settling these additional rules in early 2012 (with sufficient lead time for transition and implementation). They are discussed in our feedback document.
The timetable also sets out the steps ASIC, Chi-X and the industry need to take to enable Chi-X to commence operations in the Australian market, reflecting Chi-X’s plans to have a phased ‘soft launch’.
ASIC will continue to work closely with market operators and market participants during the coming months, including on industry testing and related issues to ensure a smooth transition to competition takes place. We will be talking over the coming weeks to industry about how best ASIC can facilitate this.
Market integrity rules for the Chi-X market
On 4 March 2011, ASIC released a consultation paper proposing new market integrity rules to apply should Chi-X be granted a market licence.
Consultation Paper 148: Proposed Market Integrity Rules: Chi-X Market (CP 148) proposes market integrity rules to apply in relation to the Chi-X market only. The proposed rules are substantially similar to the current ASIC Market Integrity Rules (ASX Market) 2010, which were adopted from the long standing ASX operating rules.
The Consultation Paper explains ASIC's approach to developing market integrity rules for the Chi-X market and sets out how we propose they would apply to market participants who also need to comply with the ASIC Market Integrity Rules (ASX Market) 2010.
Consultation on these rules is a necessary step in progressing Chi-X's application. It will help ASIC to advise the Minister for Financial Services and Superannuation on the final shape of potential market integrity rules for the Chi-X market.
The issue of CP 148 today was foreshadowed in the timetable issued yesterday by ASIC for the introduction of competition market service (see above).
The proposed market integrity rules in CP 148 are separate from the intended new common market integrity rules for the introduction of market competition as summarised in Attachment 2 to 11-38MR. Those rules will apply to trading on all competing markets (i.e. initially ASX and Chi-X) and will address the new matters raised in ASIC’s Consultation Paper 145 Australian equity market structure (CP 145), necessary for a multi-market environment.
ASIC is seeking feedback on the market integrity rules proposals in CP 148 by 25 March 2011.
ASIC has commenced civil proceedings in the Federal Court of Australia against Melbourne based derivatives dealer Camelot Derivatives Pty Limited and its sole director, Mr Neil William King. This follows an investigation into suspected misleading and deceptive conduct including making representations about returns on investments from options trading.
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.