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Thursday 4 October 2007

IR 07-44 ASIC reports on the EBS and Mercari markets

ASIC has released the findings of its second assessment of Mercari Pty Limited (Mercari) and its third assessment of EBS Service Company Limited (EBS).

Mercari is licensed in Australia to operate its financial market known as Mercari Direct, an electronic platform for the trading of foreign exchange derivatives and interest rate derivatives. ASIC has concluded that Mercari has adequate arrangements for the supervision of Mercari Direct in accordance with its obligations under the Corporations Act (the Act) and has no recommendations to make as a result of this assessment. In particular ASIC notes that Mercari has adequately addressed the observations made in the 2006 Annual Assessment Report with respect to documentation of supervisory procedures, client files and authorisation, and has made a significant improvement with respect to documentation of supervisory processes and decision making.

EBS is licensed in Australia to operate its financial market known as EBS Spot. EBS Spot is an electronic anonymous deal-matching trading system that facilitates trading by participants in spot foreign exchange and precious metals (i.e. gold and silver). ASIC has concluded that EBS has adequate arrangements for the supervision of EBS Spot in accordance with its obligations under the Act and has no recommendations to make as a result of this assessment.

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

Under the Act, ASIC is required to conduct an assessment of the extent to which licensed financial markets are complying with their obligations to supervise their markets. ASIC must do this at least once per year in relation to each licensee. ASIC can also assess how well a licensee is complying with its other obligations under the Act.

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Last updated: 30/03/2021 09:34