The Australian Securities and Investments Commission (ASIC) today released its annual assessments of the Bendigo Stock Exchange Limited (BSX) and the Stock Exchange of Newcastle Limited (NSX).
The annual assessments are part of ASIC’s continuing oversight of the way markets are operated in Australia. Each market must operate in a fair, orderly and transparent manner and must be adequately supervised.
The BSX
ASIC has concluded that at the time of the assessment and taking into account the present size of the BSX market operations, the BSX has adequate arrangements for supervising its market, including arrangements for:
- handling conflicts between its commercial interests and the need to ensure that the market operates in a fair, orderly and transparent manner;
- monitoring the conduct of participants in the market; and
- enforcing compliance with its listing rules and business (now market) rules.
Overall, the BSX has put in place most of the necessary policies and procedures to ensure that it adequately meets its statutory obligations under the Corporations Act 2001 (the Act).
Subject to some improvements to ensure accountability for compliance with its conflicts of interest policy, which it is making, the BSX has adequately addressed the recommendations on specific conflicts of interest that ASIC made in last year’s assessment.
The NSX
ASIC’s views, as set out in the NSX report, are based on the assessment visit undertaken in November 2003, as well as subsequent interaction with the NSX. Based on NSX’s operating conditions (including trading volumes and financial products traded on its market), ASIC believes that at the time we conducted our inspection of the market, NSX did not have:
- adequate arrangements for the supervision of its market in accordance with its obligations; or
- in the medium term, sufficient financial resources to continue to operate the market in accordance with its obligations.
The NSX has recently undertaken a $12 million capital raising and is seeking to list on the Australian Stock Exchange (ASX). If the NSX is successful in raising these funds and obtaining listing, our concerns in relation to their financial resources will be significantly reduced. ASIC’s ability to monitor the NSX’s financial position will also be greatly enhanced should it become subject to the ASX’s continuous disclosure and periodic reporting requirements.
Over the course of this year, the NSX has taken a number of positive steps to address the issues we have identified in relation to supervisory arrangements. The report details the improvements the NSX has agreed to make to its arrangements for the supervision of the market. There is evidence that there has been an improvement in some areas of listed company supervision since the assessment visit in November 2003.
ASIC will continue to work closely with the NSX on strengthening its arrangements, particularly in relation to:
- conflict handling arrangements;
- admission of new listings and monitoring of continuous and periodic disclosure; and
- supervision of trading.
The reports are available from the ASIC website at www.asic.gov.au/markets or by contacting the ASIC Infoline on 1300 300 630.
End of release
Download a copy of the assessment reports: