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11-38MR ASIC announces timetable for the introduction of market competition
ASIC today announced its timetable for the introduction of market competition and released a summary of the intended market integrity rule framework that would apply. The timetable also sets out the steps required for the commencement of operation of Chi-X Australia – the current market licence applicant.
This will give effect to the Government’s policy to support competition between exchange markets in Australia.
ASIC Commissioner, Shane Tregillis, said, ‘Industry has told us it wants a timetable and an early indication of the regulatory framework in order to plan and allocate resources. The feedback is that at least six months is needed from when ASIC issues its final market integrity rules for competition. The timetable released today reflects this. The timetable also depends on market operators and market participants taking all necessary steps to get ready for competition over the coming period.’
We intend to issue the final market integrity rules for competition in April 2011. At the same time, we will inform the market of their operative date which will be sometime later in 2011. The framework takes into account the comments we received to Consultation Paper 145 Australian equity market structure: Proposals and reflects the minimum rules that we consider necessary for the introduction of competition in Australia (CP 145). A summary of the intended rules is available as a table in our feedback document (attachment 2).
We consulted on a number of other important rules relating to broader market structure developments. We intend to further consult with the aim of settling these additional rules in early 2012 (with sufficient lead time for transition and implementation). They are discussed in our feedback document (attachment 2)
The timetable also sets out the steps ASIC, Chi-X and the industry need to take to enable Chi-X to commence operations in the Australian market, reflecting Chi-X’s plans to have a phased ‘soft launch’.
Market operators and participants will need to prepare for a multi-market environment. Some of the steps industry will need to take prior to Chi-X’s commencement include:
ASX and Chi-X will need to make operating rule and system changes, put in place procedures for simultaneously halting trading, for use of common stock and broker identifiers and for the sharing of certain data, and link to the nominated clock for synchronisation;
Chi-X will need to connect to market participants, CHESS, data vendors and ASIC (for the provision of real-time order and trade data for surveillance purposes);
participants will need to prepare to comply with the best execution obligation. Those intending to connect to Chi-X will need to amend their order routing and back office systems and prepare to comply with Chi-X operating rules, the new common market integrity rules, and the new market integrity rules specifically for the Chi-X market;
Chi-X will need access to clearing and settlement services; and
data vendors will need to connect to Chi-X, consolidate ASX and Chi-X data feeds and make the consolidated feeds available to clients.
ASIC will continue to work closely with market operators and market participants during the coming months, including on industry testing and related issues to ensure a smooth transition to competition takes place. We will be talking over the coming weeks to industry about how best ASIC can facilitate this.
ASIC wishes to thank the more than 40 organisations and individuals who provided us with feedback on CP 145 and discussed with us their views in over 60 meetings over the last couple of months.
View the timetable (attachment 1)