ASIC has identified obligations under the ASIC market integrity rules that could be repealed or refined to reduce the compliance burden on market participants.

Consultation Paper 222 Reducing red tape: Proposed amendments to the market integrity rules (CP 222) sets out ASIC's proposals to remove or refine market integrity rules that:

• require certain market participants to notify ASIC of the details of their professional indemnity insurance cover (the obligation to retain professional indemnity insurance cover will remain)
• require certain market participants to obtain ASIC’s consent before sharing business connections, and
• prohibit certain transactions during takeovers, schemes of arrangement and buy-backs.

These market integrity rules apply (variously) across the ASX, Chi-X, APX, NSXA and SIM VSE markets.

ASIC assumed responsibility for market supervision in 2010. The market integrity rules made at that time are based generally on operating rules previously in force and made by ASX and other market operators.

ASIC is working on a project to harmonise the relevant market integrity rules across exchanges in Australia. The project includes identifying rules that impose an unnecessary compliance burden on market participants. This consultation forms an initial part of the project.

ASIC Commissioner Cathie Armour said, 'It is an appropriate time to review the ongoing relevance and regulatory burden of certain categories of market integrity rules that were based on pre-existing obligations.

'ASIC welcomes feedback on any additional deregulatory proposals you may have in relation to ASIC’s market integrity rules'.

The deadline for submissions to CP 222 is Thursday, 2 October 2014.

Download CP 222

Background

In 2010, ASIC took over responsibility from ASX (and other market operators) for the supervision of trading on Australia's licensed markets. Most market integrity rules in force at that time were based on rules made by the ASX. Our initial approach to making market integrity rules was to generally retain the substance of these pre-existing obligations and, where possible, to model market integrity rules for new market operators on those rules to ensure consistent regulation across similar markets. This approach was also taken to ensure a streamlined transfer of market supervision with minimal disruption for industry while it prepared for the introduction of competition in exchange markets.

The Australian Securities and Investments Commission Act 2001 requires us to strive to reduce business costs and administer the law effectively with a minimum of procedural requirements. Consistent with this requirement, ASIC is reviewing the ongoing relevance of pre-existing obligations in the market integrity rules. This work is also consistent with the Government’s commitment to reducing the regulatory burden for individuals, businesses and community organisations by meeting a red and green tape reduction target of at least $1 billion a year.

This project is one of a number of ongoing and new deregulatory initiatives underway at ASIC. Report 391 ASIC's deregulatory initiatives (REP 391) provides an overview of ASIC’s commitment to reducing compliance costs for our regulated population. ASIC will continue to identify initiatives to reduce red tape for individuals and businesses where we see a net regulatory benefit, or where a minimal regulatory detriment is clearly outweighed by compliance cost savings.