ASIC today released its annual market assessment of Australian Securities Exchange Group (ASX).
The report covers the period 1 January 2008 to 31 December 2008.
ASIC has concluded that the ASX group licensees had adequate arrangements in place to supervise its markets (including to manage its conflicts of interest) and its clearing and settlement facilities under ss792A(c) and 821A(c) of the Corporations Act.
While ASIC’s view is that the ASX group licensees complied with their obligations under the Corporations Act and that the ASX group does continuously monitor and improve the performance of its supervisory activities, there are areas for improvement or attention (covered by agreed actions and recommendations) that the ASX group licensees have agreed to, or should, address. These are covered in the Assessment Report.
Background
The ASX Group comprises ASX Limited (ASX), Australian Clearing House Pty Ltd (ACH), ASX Settlement and Transfer Corporation Pty Limited (ASTC), Sydney Futures Exchange Limited (SFE), SFE Clearing Corporation Pty Ltd (SFECC) and Austraclear Limited (Austraclear).
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 Corporations 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.