ASIC has welcomed market operator ASX’s latest industry consultation on improving market resilience.

ASX has released its second consultation paper (CP 2) in response to ASIC Report 708 ASIC’s expectation for industry in responding to a market outage (REP 708). This covers potential future ASX capabilities to enhance market resilience, and submissions will close in early December 2022. The third and final consultation, on participant’s system testing requirements, is scheduled for early next year. 

ASIC Commissioner Danielle Press said, ‘ASIC continues to engage with market operators and participants as they implement steps to meet our expectations to improve the resilience of the Australian equity market during trading outages. This includes facilitating trading on alternative markets in such situations.’  

Market participants are making good progress. A survey of participants representing about 90% of equity market trading shows most now either meet all of ASIC’s expectations or are progressing the necessary changes. The balance are scoping the required work, some reliant on the capabilities provided by third-party vendors.

 This work coincides with other important changes in the industry, including the replacement of the CHESS settlement system, Cboe’s technology upgrade and the implementation of new Market Integrity Rules which will come into effect on 10 March 2023 [MIRs]. While these are important priorities, they have become inter-related and market operators and participants should plan to implement these initiatives in a reasonable timeframe. 

 ‘These are important steps to develop new, improved responses to any future market outages, and ASIC urges all market operators and stakeholders participate in this process. ASIC will continue to monitor progress by market operators and participants against its expectations,’ Commissioner Press said.