ASIC consults on equity market structure

The Australian Securities and Investments Commission (ASIC) is consulting on market structure issues relating to developments including the market being opened up for competition and the impending entry of a second market participant, Chi-X.

The second phase consultation paper ‘Australian equity market structure: Further proposals (CP 168)’ seeks views on proposed market integrity rules relating to automated trading including high frequency trading; volatility controls for extreme price movements; enhanced data for supervision; the product scope of best execution; and pre-trade transparency and price formation in the market.

A previous consultation paper confirmed that market competition could commence, and new rules were introduced to account for that and manage existing regulatory issues such as dark pools, high frequency trading, automatic trading entry and order entry controls, ASIC stated.

The new CP 168 paper proposes enhancements to supplement the regime already in place, ASIC stated.

ASIC deputy chairman Belinda Gibson said there is already an efficient regulatory framework with controls in place to enable competition, and the next step is to consider how emerging trading issues will impact the market over the coming years and enhance the framework accordingly.

“It is appropriate to address these issues in a multimarket environment, now competition is imminent. We are proposing a framework to maximise opportunities for innovation while maintaining market integrity,” she said.