ASIC has released a market assessment report on the two licensed markets operated by NSX Ltd (NSXL): the National Stock Exchange of Australia Limited (NSXA) and Bendigo Stock Exchange Ltd (BSX).
This is the seventh report for each licensee. This year, the reports have been combined for the first time because the two licensees’ boards, together with that of their parent holding company, have the same directors and the licensees share technical resources, supervisory staff, and processes.
The report covers the period between 3 March 2008 and 7 March 2009.
ASIC concluded that NSXA and BSX have:
- adequate arrangements for the supervision of their markets in accordance with the obligations under s792A(c) of the Corporations Act 2001 (the Corporations Act); and
- sufficient resources to operate these markets properly and for the required supervisory arrangements to be provided under s792A(d) of the Corporations Act.
Three agreed actions were identified, which are intended to promote:
- improved supervision of NSXL participants’ capital adequacy returns;
- ongoing adequate management of certain conflicts of interest; and
- review of NSXL’s policy on the listing of partly paid securities.
Background
NSXL’s two subsidiary domestic market operators, NSXA and BSX, have been granted Australian market licences.
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.
NSXA and BSX are licensed to operate markets in securities and managed investment products.
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 Corporations Act, ASIC is required to conduct an assessment of the extent to which licensed financial market operators 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 Corporations Act.