ASIC today released its annual assessment of the Australian Securities Exchange (ASX Limited).

ASIC Chairman, Jeffrey Lucy, said the assessment again confirms that the ASX has the necessary measures in place to ensure that Australia’s market is properly supervised.

‘There is broad confidence in Australia’s market supervision arrangements. The ASIC assessment shows that confidence is well placed, ‘ Mr Lucy said.

ASIC’s assessment found that the ASX has adequate arrangements for supervising the market, including arrangements for:

• handling conflicts between its commercial interests and the obligation to operate the market in a fair, orderly and transparent way;
• monitoring the conduct of participants; and
• enforcing compliance with its rules.

The regulator’s assessment covered a period of significant structural change within the operation of the ASX, including the establishment of ASX Markets Supervision Pty Ltd.

ASIC’s report described the formation of ASX Markets Supervision as a positive development as it further delineates between the ASX’s commercial and supervisory activities.

The assessment found that ASX Markets Supervision has implemented a number of strategies to ensure it has sufficient resources to fulfil its important function.

Mr Lucy said participants could have confidence that the market is operating in a reliable, efficient and fair manner.

Background

A financial market is defined as a facility through which offers to buy and sell financial products are regularly made. Anyone who operates a financial market in Australia must obtain a licence to do so, or otherwise be exempted by the Minister.

As part of the conditions of a granting a licence to operate a financial market, the licensee must supervise the market in accordance with Part 7.2 of the Corporations Act.

Under the Corporations Act, ASIC is required to assess whether a licensee has adequate arrangements to supervise its market. ASIC must do this at least once per year in relation to each licensee.