ASIC sets out nine agreed actions for Chi-X Australia
The Australian Securities and Investments Commission (ASIC) has made nine recommendations for improving the operations of Chi-X Australia as part of its annual assessment report.
While the regulator was satisfied that the financial market had adequate arrangements and statutory obligations in place under the Corporations Act, Chi-X agreed to the actions relating to conflict-handling, technological resources, monitoring and enforcing compliance and human resources.
According to the report, ASIC identified conflicts arising from market participation of the shareholder's of Chi-X's parent company, Chi-X Global Holdings LLC, which is in turn majority owned by Instinct Global Properties and six institutional investors.
In addition, the regulator found that Chi-X's independent non-executive director is also chairman of E.L. & C. Baillieu Stockbroking, a company that was admitted as a market participant on 28 February 2012.
Chi-X agreed to update its public website to include the names of the entities with which it may have conflicts, and the arrangements it has in place to manage such conflicts.
Chi-X has also agreed to review its processes on the admission of market participants, including ensuring that participants are ready to commence trading once admitted; properly updating its compliance checklist in relation to the granting of admission into the market; and maintaining accurate and complete records of all the files and systems that it uses for reviewing and approving participant applications.
According to ASIC, Chi-X's turnover until March 2012 remained below $50 million, with a market share of less than 1 per cent.
AUTHOR
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