The Australian Securities and Investments Commission will take over supervision of real-time trading on domestic licensed markets on Aug. 1, Financial Services Minister Chris Bowen said.
“I am pleased to say I have spoken with industry bodies and market participants and they have expressed to me their broad support for ASIC’s readiness to take on the new role,” Bowen said in Sydney today. “Australia’s financial market is well prepared for this handover of responsibility.”
The Senate voted in March to hand oversight of real-time trading to ASIC from ASX Ltd., which has been responsible for operating and supervising Australia’s national stock exchange under self-regulation arrangements in place since 1998. The government has said the transfer of additional powers to the markets regulator will pave the way for rival exchange operators.
ASX’s role had been to investigate possible breaches of its rules and refer the most significant to the regulator, while its own conduct was overseen by ASIC. The commission will now be responsible for both supervision and enforcement of the laws against misconduct on Australia’s financial markets.
“It’s important to establish the new regime as soon as possible,” said Tim Schroeders, a portfolio manager at Pengana Capital, in a telephone interview today ahead of Bowen’s announcement. “The transfer of powers to ASIC from the stock exchange will allay fears of a perceived conflict of interest and will increase market confidence.”
Chi-X Global Inc., an electronic-trading-platform, this year won preliminary government approval to become Australia’s first rival to ASX. Chi-X Australia Pty. is hoping to start operating in early 2011, the local unit’s chief operating officer Peter Fowler said in e-mailed comments yesterday.
Chi-X was the first so-called multilateral trading facility to challenge traditional bourses, including Deutsche Boerse AG, London Stock Exchange Group Plc and NYSE Euronext, by offering lower fees and faster trading. Chi-X Global, a holding company for the regional units, is owned by Instinet LLC, a subsidiary of Nomura Holdings Inc.
ASIC Chairman Tony D’Aloisio said in August last year that he expected financial markets globally to be more heavily regulated in the wake of the global financial crisis.
Twenty-three ASX staff will take up positions at ASIC with the transfer of responsibility, the exchange operator said in a separate statement. ASX is retaining a subsidiary, to be renamed ASX Compliance, to monitor and enforce ASX operating rules after the transfer.
Kevin Lewis has been appointed group executive and chief compliance officer, starting July 19. Alan Cameron will remain chairman of ASX Compliance.