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Tuesday 17 November 2020

20-289MR Trading on ASX equities market today

This morning at 11:03am ASX Limited (ASX) provided a system status update indicating that it had become aware of data issues with the ASX Centre Point matching system.  At 11:17, ASX further advised that  '[u]ntil further notice ASX Centre Point execution prices will be based on the ASX-lit best bid and offer only.'  That is, Chi-X bids and offers would not be used.

By not considering Chi-X bids and offers, transactions conducted on Centre Point may no longer constitute a Trade with Price Improvement under Rule 6.2.3 of the ASIC Market Integrity Rules (Securities Markets) 2017 (Rules). As a result, orders may no longer fall within the exceptions to the requirement to enter into transactions by matching on a Pre-Trade Transparent Order Book (Rule 6.1.1).

ASIC has not instructed ASX to suspend the operation of Centre Point, and nor have we instructed Market Participants not to use Centre Point.  This was to ensure the markets remained orderly.

However, participants should have sufficient flexibility to enable routing of orders to alternative venues.  ASIC expects Market Participants that have not already done so to take reasonable steps to remove their reliance on Centre Point swiftly and safely.

ASIC is concerned that there have been further issues with infrastructure at ASX and is working with stakeholders to ensure that any impact on the fair, orderly and transparent operation of the markets is minimised. ASIC is actively assessing ASX’s compliance with its market licence obligations and is considering further actions to ensure the adequacy of ASX’s human, financial and technological resources to operate its markets in an orderly manner.

Background

ASX Centre Point is an anonymous mid-point trade matching system.  Centre Point normally operates by matching orders at the mid-point or other permitted price steps inside the National Best Bid and Offer (NBBO).  The NBBO is ordinarily calculated by ingesting pricing data from ‘lit’ markets – that is ASX and Chi-X.

Last updated: 30/03/2021 09:23