Importance of supervision

ASX is required under the Corporations Act to ensure that its markets are fair, orderly and transparent.  Therefore, ASX’s overarching supervisory objective is to meet these statutory obligations.

To meet that objective ASX has set the following objectives:

  • Take steps to promote confidence in our markets and in our Clearing and Settlement facilities.
  • Achieve appropriate levels of transparency in relation to the activities of our listed entities, and to set standards for their behaviour.
  • Promote confidence in the way Participants conduct business on our markets and Clearing and Settlement facilities.
  • Ensure that there is fair and effective interaction with our Clearing and Settlement facilities.
  • Reduce external systemic risk to our Clearing and Settlement facilities.

In meeting its supervisory objectives ASX undertakes to do the following:

  • Be clear in our communication of supervisory objectives, expectations, processes and priorities.
  • Adopt professional and efficient internal supervisory operations.
  • Provide timely responses.
  • Adapt to, and facilitate, changes in the environment.  We recognise the importance of ensuring our operational rules, procedures and standards must remain appropriate and relevant in a continually changing environment.
  • Balance the commercial need of our listed entities and Participants with the need to maintain the integrity of the market.
  • Take into account the needs and expectations of all our various stakeholders.
  • Work constructively and cooperatively with other regulators (eg ASIC, APRA and ACC).

ASX has six licences under the Corporations Act.  ASX Limited and SFE hold the market operator's licence.  The Clearing and Settlement facility licences are held by Australian Clearing House (ACH), ASX Settlement and Transfer Corporation (ASTC), SFE Clearing Corporation (SFE Clearing) and Austraclear, all subsidiary companies of ASX.  The licences to conduct these activities constitute a core asset of the company.

The primary obligations of ASX under its licences are to:

  • Ensure a fair, orderly and transparent market;
  • Have adequate arrangements for supervising the market (including arrangements for monitoring participant conduct in the market, enforcing compliance with the operating rules and handling conflicts); 
  • Reduce systemic risk; and
  • Ensure there are sufficient resources (including human, technological and financial) to operate the market properly and provide the required supervisory arrangements.