ASX has new powers to cancel or amend trades.
On average ASX conducts 60,000 or more trades every day. Of these only a handful are cancelled. This happens when a trade occurs in error, for example when a broker enters the wrong quantity of shares in a trade. Usually the brokers involved mutually agree to "unwind" the trade. However, there have been isolated instances where brokers were unable to agree if a mistake had been made.
In order to better protect investors, and to ensure a fair and orderly market, ASX is changing its Market Rules. This change, which is subject to Treasury approval, will give ASX the power to cancel or amend trades it deems to be made in error.
Now if brokers cannot agree, and the trade impacted the operation of a fair and orderly market ASX will submit the disputed trade to the Dispute Governors Committee. The Committee will be made up of one ASX representative and two External representatives. The Dispute Governors Committee will than submit a recommendation to the ASX by 5pm of the day of the dispute or in the case of more complex disputes, no later than 5pm the next day. ASX then has the power at its discretion to act on (or to refrain from acting on) the Disputes Governor Committee's recommendations.
The new Market Rules take effect on 11 March. As an investor, if you have a grievance with the activities of your stockbroking firm, ASX recommends that your first step in dispute resolution is to contact your adviser at that firm. The links above provide more information on what to do if you have a dispute with your broker, and the new trade cancellation rules.
It is important to note that this policy does not provide ASX the scope to pursue trade cancellation requests that come directly from investors. It only empowers ASX to deal with disputes upon the application of Market Participants. If you are concerned a trade has occurred in error you should contact your broker.
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