ASIC Makes Rules for Capital and Related Requirements For ASX and ASX 24 Markets

ASIC on August 1 made market integrity rules for capital and related requirements for the ASX market and the ASX 24 market, formerly known as the Sydney Futures Exchange market.

The rules transfer to ASIC ASX’s pre-existing capital and related requirements for the two markets. This is consistent with the smooth transition in market supervision responsibility from ASX to ASIC in August 2010.

These rules amend the existing ASIC market integrity rules for the two markets by inserting three new chapters for capital, reporting and margins. Concurrently, ASX’s pre-existing capital, reporting and margin requirements in the ASX and ASX 24 Operating Rules have ceased to operate.

ASIC Market Integrity Rules (ASX Market) Amendment 2011 (No. 2) has amended the pre-existing ASIC Market Integrity Rules (ASX Market) 2010 and ASIC Market Integrity Rules (ASX 24 Market) Amendment 2011 (No. 1) has amended the pre-existing ASIC Market Integrity Rules (ASX 24 Market) 2010.

While ASIC has generally retained the pre-existing status quo, it has made two minor changes:

o from 1 January 2012, all ASX 24 market participants must complete daily reconciliations of client money;
o from 1 January 2012, non-clearing ASX 24 market participants must lodge their monthly capital returns within 10 business days (rather than one month) after the end of each calendar month.

ASIC has also released Regulatory Guide 226 Guidance on ASIC market integrity rules for capital and related requirements: ASX and ASX markets (RG 226), which provides advice on the operation of these rules.

ASIC has also released Report 244 Response to submissions on CP 161 Proposed ASIC market integrity rules for capital and related requirements: ASX, ASX 24 and Chi-X markets (REP 244). This summarises the feedback ASIC received from industry on Consultation Paper 161 Proposed ASIC market integrity rules for capital and related requirements: ASX, ASX 24 and Chi-X markets (CP 161), which was released in June and first proposed making these rules.

ASIC intends to make market integrity rules shortly for capital and related requirements for the Chi-X market, which is anticipated to start operating on or after 31 October. This was proposed in CP 161. ASIC intends to model these rules on the market integrity rules for capital and related requirements for the ASX market to ensure a level playing field for the two equity markets.

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