Published On: Thu, Aug 18th, 2011

ASIC Consults on Consequential MIR for ASX and Chi-X Markets

ASIC today released Consultation Paper 166 Market integrity rules: non-AFS licence foreign participants and consequential amendments (CP 166).

Consultation Paper 166 proposes market integrity rules for the ASX and Chi-X markets, and seeks views on:

* certain minimum presence requirements for foreign participants not required to hold an Australian financial services (AFS) licence (non-AFS licence foreign participants) trading on the ASX and/ or Chi-X markets; and
* minor consequential amendments to the ASIC Market Integrity Rules (ASX Market) 2010 and the ASIC Market Integrity Rules (Chi-X Australia Market) 2011, resulting from the introduction of the competition market integrity rules, in particular amendments to:
o restrictions related to crossings and trading outside of normal trading hours during takeovers and buybacks to ensure that existing restrictions operate effectively;
o the prohibition on dealing during a trading suspension; and
o market participant restrictions relating to client instructions.

The need for consequential amendments as proposed in CP 166 was foreshadowed in the timetable issued by ASIC in March 2011 for the introduction of competition in market service.

The proposal on the minimum requirements for non-AFS licence foreign participants, for example foreign participants that trade as principal only, was previously consulted on for the Chi-X market in Consultation Paper 148 Proposed market integrity rules: Chi-X market (CP 148), in March 2011.

In April 2011, ASIC made market integrity rules to deal with the introduction of competition between exchange markets: see ASIC Market Integrity Rules (Competition in Exchange Markets) 2011. Participants in ASX and Chi-X markets need to comply with the market integrity rules for competition in exchange markets, and the rules for the ASX and Chi-X markets respectively.

The rules proposed in CP 166 amend the market integrity rules for the ASX and Chi-X markets to take effect from 31 October 2011. The proposed consequential amendments are intended to ensure that consistent terminology applies to the market integrity rules for the ASX and Chi-X markets and those rules made for competition in exchange markets.

ASIC is seeking feedback on the market integrity rules proposals by 9 September 2011.

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