Mr Jeffrey Lucy, Chairman of ASIC, today released the findings of ASIC’s most recent assessment of the Australian Stock Exchange (ASX).
‘ASIC’s assessment shows that the ASX continues to function as an effective and reliable market,’ Mr Lucy said.
Under the Corporations Act, ASIC must conduct an annual assessment of how well the ASX is complying with its obligations to supervise its market. This is the fourth assessment ASIC has undertaken.
ASIC’s report to the Government concludes that the ASX has adequate arrangements for supervising the market, including arrangements for:
- handling conflicts between its commercial interests and the obligation to operate the market in a fair, orderly, and transparent way;
- monitoring the conduct of participants; and
- enforcing compliance with its rules.
During the assessment period, the ASX initiated a major review of supervision and has announced several projects relating to the review of its operating rules. Other changes include the implementation of a major internal restructure of the supervision area.
The ASX has also announced it will create a separate supervision subsidiary which is expected to be in place from 1 July 2006.
‘Overall, we are very pleased with the outcome of this assessment. This process is just one of the many interactions we have with the ASX about market oversight and compliance,’ Mr Lucy said.
‘Both organisations are committed to building on our already strong relationship to maintain Australia’s reputation for reliable, efficient, and fair markets,’ he added.
Background
A financial market is defined as a facility through which offers to buy and sell financial products are regularly made. Anyone who operates a financial market in Australia must obtain a licence to do so, or otherwise be exempted by the Minister.
As part of the conditions of a granting a licence to operate a financial market, the licensee must supervise the market in accordance with Part 7.2 of the Corporations Act.
Under the Corporations Act, ASIC is required to assess whether a licensee has adequate arrangements to supervise its market. ASIC must do this at least once per year in relation to each licensee.
End of release