Today’s publication of the “ASX Market Management Consultation 2: Potential Enhancements” is the second in a sequence of three consultations that the ASX will be undertaking following ASIC’s expectations of market operators set out in ASIC’s Report 708.
Following the feedback received during the first consultation, which primarily focussed upon existing procedures and current capabilities during incidents, this second consultation will outline and provide technical details for potential future enhancements to these procedures and capabilities.
The ASX is seeking stakeholder feedback across the following four proposals:
- A new order download service (ODS).
- A new trade download service (TDS).
- A ‘cancel only’ session state.
- An Intraday restart capability.
The final section of this second consultation will detail ASX’s policies for disabling certain market components, as set out by ASIC’s Rep 708 Expectation 6. Note: ASX is not seeking feedback on this section, and it is tabled in this document as a technical reference only.
As part of ASX’s ongoing commitment to work with all stakeholders during this consultation, we will again, conduct a range of group and one-on-one meetings over the next six weeks.
Both ASX and ASIC encourage all stakeholders to engage during this consultation. Submissions can be emailed to email@example.com and are welcome up to close of business Friday 9th December 2022.
For any questions or to arrange a meeting, please contact:
- Rob Nash on +61 2 9227 0032 or
- Ben Jackson on +61 2 9227 0897
On 19 October, ASX released a response paper summarising and responding to the feedback from the 28 June 2022 consultation paper on ASX Market Management. The paper includes the proposed actions ASX will take following the consultation.
The Market Management consultation was the first of three ASX consultations in response to the Australian Securities and Investments Commission’s (ASIC) Report 708 - ‘ASIC’s expectation for industry in responding to a market outage’ (REP 708).
The consultation sought feedback on the following topics:
- certainty about trade and order status
- the application of session states (e.g. Enquire and Adjust)
- intraday checkpoints and a final cut-off time
- incident communications with the market during disruptions
ASX received 19 written responses from a broad range of stakeholders including participants (11), industry bodies (3), vendors (2), wholesale investors (1), a share registry (1) and a market operator (1).
ASX would like to thank the many stakeholders who participated in meetings and the respondents who provided written feedback.
Today ASX released a response paper to the December 6 2021 consultation paper on proposed changes to the ASX Trade Cancellation Ranges: Proposals for Change to ETO cancellation ranges and QCR Process.
Ten written submissions were received in response to the consultation and ASX would like to thank those who have provided feedback.
Today ASX released a response paper to the December 6 2021 consultation paper on proposed changes to the ASX 24 Cancellation Ranges: Proposals for Change to Energy Products and QCR Process.
Six written submissions were received in response to the consultation and ASX would like to thank those who have provided feedback.
On 29 August 2022, ASX released its response to consultation on the changes it proposed in February 2022 to the ASX Recovery Rules and Handbook to allocate US settlement bank investment losses between the ASX CCPs and their clearing participants. The response sets out the two revisions ASX intends to make to its loss allocation principles in response to the feedback received. It also summarises the key themes from the consultation process and ASX’s reply.
ASX received five written submissions in response to its consultation paper from two industry bodies and three clearing participants.
On 30 June 2022, ASX released its response to consultation feedback received on the August 2021 CHESS Replacement Tranche 3 and Combined Rule Amendments Consultation Paper.
ASX received 8 written submissions in response to its consultation paper, five of which were provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:
On 28 June 2022, ASX released a Consultation Paper on Market Management.
This consultation paper follows a review of actions taken by the ASX during technical issues or outages. The Australian Securities and Investments Commission (ASIC) published ASIC’s expectations for industry in responding to a market outage (Report 708). The report sets out ASIC’s ‘expectations to support the resilience and robustness of the Australian equity market’ that are applicable to market operators, market participants, and large institutional investors.
ASX is committed to working closely with our regulators, technology providers, independent experts, industry associations and customers to strengthen the resiliency and robustness of all the markets we operate, and to address the expectations listed in ASIC’s report about the equity market specifically.
A key part of this commitment is a sequence of three market consultations on aspects of ASX’s management of the equity market. These are expected to be conducted in June, September and December 2022.
- June 2022 (this consultation): Broadly assesses the current position and considers refinements and improvements based on current capabilities.
- September 2022: Will request stakeholder input on potential future capabilities.
- December 2022: Will request stakeholder feedback on participant testing needs, including changes arising from the first and second consultations.
This first market consultation (June 2022) provides transparency on ASX’s existing market management procedures and how they are applied, and invites feedback on current practices based on the following four areas:
- Certainty about orders and trades during an outage
- Market session states (including Enquire and Adjust modes)
- Approach, frequency and content of communications
- Intraday checkpoints and cut-off times.
Written submissions should be made by 23 July 2022.
On 8th June 2022, ASX released a consultation paper on the fallback language to be applied to the Australian and New Zealand 90 Day Bank Bill Futures in the event of permanent cessation of the 3 month BBSW and/or BKBM benchmark. The consultation requests feedback on:
- Proposed fallback language to be included in the ASX 24 Operating Rules and Procedures; and
- Alternative fallback rates currently available and the level of detail participants require regarding the fallback rate and calculation ahead of any permanent cessation event.
The proposed changes are in line with global benchmark reform and best practice guidance issued by regulators worldwide to include fallback language in all contractual arrangements.
Written submissions in response to the consultation paper are requested by Wednesday 6th July 2022.
On 1 June 2022, ASX released its response to submissions received on the March 2022 Discussion Paper - Issuer Services: New Pricing. The changes proposed in the paper were relevant to any issuer of approved financial products that uses or will use ASX Issuer Services.
The response summarises the key themes from the consultation process and ASX’s reply. The paper also sets out the confirmed changes and effective date of 1 July 2022.
ASX received 9 submissions in response to the Discussion Paper, with 3 provided on a confidential basis. The submissions provided on a non-confidential basis are available at the links below:
On 26 April 2022, ASX released a consultation paper entitled Enhancing the ASX Investment Products Offering.
The consultation paper is phase one of a two-stage consultation process intended to ensure that ASX’s investment product offering is supported by a clear and consistent rule framework that safeguards the interests of investors, while at the same time providing issuers with the flexibility to innovate and bring new products to market, and without imposing undue compliance costs or burdens.
ASX’s investment product offering currently comprises the following product sets regulated by three different rule books:
- exchange traded funds (ETFs), managed funds and structured products quoted on ASX under schedule 10A of the ASX Operating Rules
- listed investment companies (LICs), listed investment trusts (LITs), real estate investment trusts (REITs) and infrastructure funds listed and quoted on ASX under the ASX Listing Rules, and
- warrants quoted on ASX under schedule 10 of the ASX Operating Rules.
ASX can see merit in bringing these different rules into closer alignment for the benefit of both investors and issuers.
The consultation paper seeks submissions from all interested stakeholders on a range of policy issues relevant to achieving this outcome, including:
- admission requirements and processes
- product names
- investment mandates
- permitted investments
- portfolio disclosure
- management agreements
- management fees and costs
- performance reporting
- liquidity support
- the mFund Settlement Service, and
- improving the information available to investors about investment products.
To assist stakeholders in making a submission, ASX has prepared a separate submission form listing all of the questions in the consultation paper and providing a space for responses to those questions. The submission form can be downloaded here.
After considering the submissions it receives on the policy issues raised in the phase one consultation paper, ASX will proceed to draft proposed changes to its rules, procedures and guidance for investment products.
Phase two of the consultation will then seek feedback on the specific changes proposed to ASX’s rules, procedures and guidance for investment products. The consultation paper for phase two is likely to issue in early 2023.
Subject to the receipt of the necessary regulatory approvals, it is envisaged that the final changes to ASX’s rules, procedures and guidance for investment products will be released in mid-late 2023, with a view to them coming into effect no earlier than 1 January 2024.
Stakeholders who wish to make a submission on the phase one consultation paper are asked to do so in writing by the close of business on Friday 24 June 2022.
On 5 April 2022, ASX released a consultation paper entitled Proposed enhancements to the ASX Listing Rules: Continually improving the reputation and integrity of the ASX market.
The consultation paper seeks feedback from stakeholders on proposed enhancements to the ASX Listing Rules dealing with:
- the issuance of securities by listed entities, including the rules relating to security purchase plans (SPPs), pro rata issues and material placements
- the financial reporting framework for listed entities
- the admission of an entity to the official list and the quotation of its securities
- transactions by listed entities with persons in a position of influence
- the lodgment of documents by listed entities with ASX for release to the market, and
- other miscellaneous matters.
Stakeholders interested in making a submission on the consultation paper are asked to do so in writing by the close of business on Friday 27 May 2022.
ASX will consider all submissions it receives in response to the consultation paper before finalising the proposed rule amendments with ASIC.
Subject to the receipt of the necessary regulatory approvals, it is envisaged that the final rule amendments will be released in the third quarter of 2022 and take effect on 1 December 2022.
On 21 March 2022, ASX released a consultation paper outlining proposed changes to the ASX Clear (Futures) OTC Rules and Handbook to:
- implement benchmark fallback rate provisions in relation to the OTC interest rate derivatives products cleared by ASX; and
- introduce OTC product enhancements to support the Actual/Actual ICMA Day Count Convention for the clearing of Assets Swaps and the IMM AUD roll convention, the industry convention to enable swaps to roll on ASX’s bank bill futures dates.
Written submissions are requested by Friday 29 April 2022.
On 3 March 2022, ASX released the Discussion Paper Issuer Services: New Pricing. The changes proposed in the paper are relevant to any issuer of approved financial products that uses or will use ASX’s Issuer Services. The changes do not relate to listing fees.
ASX welcomes feedback from issuers on the pricing changes outlined in the paper.
Written submissions are requested by Thursday 14 April 2022.
On 11 February 2022, ASX released a consultation paper outlining proposed changes to the ASX Recovery Rules and Handbook that relate to the allocation of US settlement bank investment losses between the ASX CCPs and their clearing participants
ASX seeks feedback from clearing participants in relation to ASX’s proposal to allocate USD settlement bank investment losses in excess of $75m between ASX Clear (Futures) ( ASXCLF) clearing participants based on principles of mutualisation and potential and actual user pays. While all ASXCLF clearing participants will be exposed to a US settlement bank loss, those clearing participants that are in scope for overnight margining, and those clearing participants who have also paid USD funds to ASXCLF in the prior default fund commitment period will each bear a greater proportion of any loss.
Written submissions in response to the consultation paper are requested by Friday 25 March 2022.
On 1 February 2022, ASX Limited (“ASX”) released a consultation paper entitled Proposed ASX rule amendments to facilitate the listing of CCIVs and certain other collective investment vehicles on the ASX market and the quotation of their products on the ASX AQUA market.
The consultation paper seeks feedback on changes ASX is proposing to:
- the ASX Listing Rules to facilitate the listing on the ASX market of:
- CCIV sub-funds
- notified foreign passport funds (“NFPFs”) and
- NZ registered managed investment schemes making a recognised offer of securities under Chapter 8 of the Corporations Act (“recognised NZ schemes”), and
- the ASX Operating Rules to facilitate the admission of products issued by the entities listed above to trading status on the ASX Quoted Assets (“AQUA”) market or for settlement through the ASX Managed Funds Settlement Service (“mFund”).
By way of background, a CCIV (short for “Corporate Collective Investment Vehicle”) is a new type of funds management vehicle to be introduced by the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 that will operate via one or more sub-funds. The target date for the implementation of that Bill is currently 1 July 2022. ASX wants to be able to offer CCIV sub-funds access to the distribution available on the ASX and AQUA market platforms and to offer investors access via the ASX and AQUA markets to the investment opportunities that CCIV sub-funds will provide. To do this requires changes to the ASX Listing Rules and the ASX Operating Rules.
As further background, NFPFs have the benefit of the Asia Region Funds Passport mutual recognition arrangements set out in Chapter 8A of the Corporations Act and explained further in ASIC Regulatory Guide 138 Foreign Passport Funds. Recognised NZ schemes have the benefit of the mutual recognition arrangements set out in Chapter 8 of the Corporations Act and explained further in ASIC Regulatory Guide 190 Offering financial products in New Zealand and Australia under mutual recognition. Currently, however, ASX’s rules do not specifically cater for the listing of NFPFs or recognised NZ schemes or for the admission of their products as AQUA products, a situation which ASX is also seeking to rectify via this consultation.
ASX’s proposed rule changes will therefore be of particular interest to entities in the funds management industry and to industry groups and advisers representing those entities.
Due to the structure of CCIVs and their sub-funds, however, some significant rationalisation is required to the Listing Rules that refer to, or draw a distinction between, listed companies and listed trusts so that they appropriately apply where the listed entity is a CCIV sub-fund, which has no legal personality and is neither a company nor a trust. These broader changes to the Listing Rules will be of interest to all listed entities and their advisers.
Stakeholders interested in making a submission on the consultation paper are asked to do so in writing by the close of business on Friday 18 March 2022.
ASX will consider all submissions it receives in response to this consultation before finalising the proposed rule amendments.
Subject to the receipt of the necessary regulatory approvals, ASX is aiming to have the amended rules in force on, or as soon as practicable after, 1 July 2022, the Government’s target date for the introduction of its CCIV legislation.
On 17 January 2022, ASX released its response to consultation on the October 2020 proposed changes to capital requirements for ASX Clear Participants. The response to consultation paper includes an outline of the draft rule amendments to give effect to the recalibrated proposal.
ASX received seven written submissions in response to its consultation paper, with six provided on a confidential basis. The submission provided on a non-confidential basis is available at the link below: