ASX to improve supervisory arrangements

Senator Nick Sherry, the Minister for Superannuation, has welcomed the release of the Australian Securities and Investments Commission’s (ASIC’s) assessment of the Australian Securities Exchange (ASX).

The assessment found that the ASX had adequate arrangements in place to supervise markets, including clearing and settlement issues, and for managing conflicts between commercial markets and licensees to ensure fairness and transparency. However, the assessment also noted 10 areas in which the ASX could improve its supervisory arrangements.

“I note that for the first time, ASIC’s recommendations to the ASX are presented as ‘agreed actions’. This shows a concerted effort by both ASIC and the ASX to quicken their response times to emerging issues in financial markets,” said Sherry.

These 10 areas ASIC identified include: clarifying the roles of licence compliance and the ASX Market Supervision (ASXMS) board, monitoring supervision resources, clarifying the role of the policy committee, assurance about the total cost of supervision, developing benchmarks for market supervision, revising error solution applications, revising the ASTC settlement process, report staffing for non ASXMS supervisory activities, and reviewing the Sydney Overnight Computerised Market upgrading process.

“Financial markets have experienced a significant turnaround this year and regulators have done a solid job in difficult times. A well funded and transparent approach to market supervision is a critical component of a well-ordered market,” Sherry said.