26-226MR ASIC strengthens AI trading safeguards and streamlines market integrity rules

ASIC is strengthening safeguards for automated and AI-enabled trading while streamlining regulatory requirements for securities and futures market participants under incoming changes to its Market Integrity Rules (MIRs).

The reforms bolster important gatekeeper controls requiring participants to test, monitor and govern trading systems and algorithms as markets evolve and the adoption of AI increases. These controls sit alongside market operators’ anomalous order thresholds and extreme trade ranges, providing an important safeguard for the integrity and resilience of Australian markets.

The changes also align Australia’s rules more closely with the principles of the International Organization of Securities Commissions (IOSCO) and other international standards. Greater consistency with global approaches supports confidence in Australian markets and makes regulatory requirements easier to navigate for entities operating across jurisdictions.

The amendments follow extensive industry consultation and will take effect in 2028. After considering feedback, ASIC extended the transition period to 18 months, reflecting a balanced approach that gives industry additional time to implement the reforms while maintaining their market integrity objectives.

The reforms are technology neutral and address risks arising from all trading algorithms, including those enabled by AI and machine learning.

Ahead of the new rules commencing, ASIC is also consulting on updated regulatory guidance to assist industry with their transition.

ASIC is proposing to consolidate, simplify and clarify the relevant guidance, making requirements easier for securities and futures participants to interpret and apply. The proposed changes would reduce the volume of relevant guidance for securities participants by almost 60%, supporting stronger protections through clearer, more proportionate regulation and making it easier to do business in Australia.

ASIC Commissioner Simone Constant said, ‘Trading on Australia’s markets is now almost entirely automated, and the adoption of AI is increasing. While these technologies can improve efficiency, trading algorithms can also behave in ways that are opaque, unpredictable and potentially manipulative.

‘Market participants are important gatekeepers. These reforms strengthen the controls they must have in place to test, monitor and govern trading systems and algorithms, helping protect the integrity and resilience of Australian markets as technology and AI continue to evolve.

‘By aligning more closely with international standards and simplifying our guidance, we are strengthening protections while reducing unnecessary complexity. The extended transition period gives industry practical time to implement the changes without compromising their objectives.’

Amendments to the Market Integrity Rules

ASIC’s amendments are in response to feedback to Consultation Paper 386 which proposed amending the trading systems and automated trading obligations in the ASIC Market Integrity Rules (Securities Markets) 2017 and the ASIC Market Integrity Rules (Futures Markets) 2017.

ASIC has made amendments to both sets of rules to:

  • modernise trading systems obligations to reflect current trading practices, technology and risks including algorithmic trading, AI and machine learning
  • better align ASIC’s market integrity rules with IOSCO principles and international standards on algorithmic trading, including AI and machine learning trading algorithms
  • apply trading system requirements consistently to manually entered and automated orders
  • set more consistent standards for securities and futures market participants
  • clarify the scope of the false or misleading rule including where AI-enabled or other trading activity has the effect of creating a false or misleading appearance, and
  • clarify and streamline the MIRs by removing redundant or overly prescriptive obligations.

Consultation on updates to RG 265 and RG 266

ASIC is seeking feedback on proposed updates to Regulatory Guide 265 Guidance on ASIC market integrity rules for participants of securities markets (RG 265) and Regulatory Guide 266 Guidance on ASIC market integrity rules for participants of futures markets (RG 266).

The proposed updates will:

  • update RG 265 and RG 266 to reflect the amended MIRs
  • incorporate relevant guidance from Regulatory Guide 241 Electronic Trading (RG 241) into RG 265 and RG 266, so that RG 241 can be retired
  • align guidance between RG 265 and RG 266 where appropriate, and
  • simplify and clarify ASIC’s existing guidance.

The updates advance ASIC’s commitment to regulatory simplification by consolidating material, removing repetition, shortening guidance and improving its structure. This is intended to make requirements easier to navigate and apply, reduce unnecessary regulatory burden and support doing business in Australia, while preserving strong and proportionate market integrity protections.

Further information, including the draft updated guidance, is available on the consultation webpage.

ASIC welcomes feedback from industry on the proposed updated guidance in RG 265 and RG 266.

Submissions should be sent to markets.consultation@asic.gov.au by 5pm (AEDT) on 5 November 2026.

More information