ASX's Corporations Act obligations

As a licensed operator of markets and clearing and settlement facilities in Australia, ASX has various regulatory obligations under the Corporations Act 2001 (Cth).

The documents below explain how ASX meets some of those regulatory obligations, being the obligations:

Fair, orderly and transparent

As a market operator, ASX is required to ensure that each of its licensed markets is fair, orderly and transparent.
In satisfying its obligation to operate a market that is:

  • fair, ASX has in place a clear rule framework setting out the criteria and processes to become a participant in ASX’s market or to be admitted to ASX’s official list; the rights and obligations once admitted; and the circumstances when a participant or listed entity can be suspended or terminated.

ASX also has arrangements in place to ensure that these rules are applied in a consistent manner, without bias.

  • orderly, ASX has clear rules and processes on:
    • how and when buy and sell orders are matched so that prices on its markets reflect genuine supply and demand;
    • corrections or cancellations of trading errors;
    • applications of halts (regulatory or trading); and,
    • the actions ASX can take to avoid or rectify a disorderly market.

In addition, ASX has trading systems that are secure, reliable and have sufficient capacity to handle reasonably foreseeable peak levels of trading.

  • transparent, ASX has arrangements in place to provide participants with timely information about prices and volume to enable them to make informed trading decisions. These arrangements also cover the circumstances when ASX may consider cancelling or correcting a trading error; suspending trading in a particular stock; or in a more extreme case, shutting the market.

For more information on how the ASX group interprets its obligation to ensure that each of its licensed markets is fair, orderly and transparent, see here.

Fair and effective

As a clearing and settlement (“CS”) facilities operator, ASX is required to ensure that each of its licensed CS facilities is fair and effective.
In satisfying its obligation to operate a CS facility that is:

  • fair, ASX has in place a clear rule framework setting out the criteria and processes to become a clearing and / or settlement participant in ASX’s market; the rights and obligations once admitted and when a participant can be suspended or terminated.

ASX also has arrangements in place to ensure that these rules are applied in a consistent manner, without bias.

  • effective, ASX has clear rules and processes that set out how participants meet their obligations to each other within the timeframes specified.

In addition to systems that are secure and reliable, ASX has a risk management system that appropriately deals with default and other risks, including systemic risk, counterparty risk, market risk, liquidity risk and operational risk.

For more information on how the ASX group interprets its obligation to ensure that each of its CS facilities are provided in a fair and effective way, see here.