Transcript of ASIC Market Integrity Report video
Market integrity matters!
Market integrity matters to all of us.
Having trust and confidence in the operation of our financial markets encourages Australian's to invest in them. This makes it easier for companies to raise money, which enables them to grow. This in turn creates jobs and economic growth.
ASIC's Market Integrity Group is responsible for ensuring that Australia's domestic licenced markets are fair, transparent and efficient.
This video highlights some of the activities we undertook between 1 July and 31 December 2015, and outlines our priorities for 2016.
Deterrence
Robert Dulhunty was sentenced to 18 months in jail for conspiring to manipulate the share price of Healthzone Limited. Mr Dalhunty was a director of Healthzone. By intentionally and repeatedly conspiring to manipulate the market Mr Dalhunty abused the trust of Healthzone investors.
ASIC and the Australian Federal Police worked together to prevent the distribution of profits generated by an illegal internet hacking, market manipulation, and money laundering operation. In this instance, we were literally able to ensure that 'crime didn't pay'!
Standards and education
We completed reviews of high-frequency trading and dark liquidity. We found that current levels of high-frequency trading and dark liquidity are not adversely affecting the function of our markets or their ability to fulfil their role for companies and investors.
We released a report highlighting the importance of financial benchmarks in the Australian economy. This outlines the consequences if benchmarks are not robust and reliable and makes recommendations for avoiding conduct-related issues in relation to financial benchmarks.
Behavioural change
We've been using behavioural insights to better regulate market conduct. We designed an education campaign about suspicious activity reporting, and launched a new form on the Market Entity Compliance (MECS) portal to make lodging these reports faster and easier.
ASIC and the licensed listing exchanges agreed to a moratorium on initial public offerings of companies with VIEs. This decision was taken to protect Australian investors.
Ongoing areas of focus
Cyber threats, handling of confidential information and conduct risk remain significant issues facing Australia's financial markets (and ASIC) in 2016. We have already undertaken extensive work on these issues, which will continue this year. Other key activities will include:
- completing our review of Australia's retail OTC derivatives industry
- considering the need for regulatory change to address benchmark-related conduct issues, and
- educating stakeholders about the need for client money handling reform.