The Australian Securities and Investments Commission (ASIC) has issued regulatory guidance on market integrity for the Australian Securities Exchange derivatives market known as ASX 24.
ASX 24 (formerly the Sydney Futures Exchange) remains open round the clock for trading of contracts such as Australia’s benchmark futures and options contracts listed on treasury bonds, cash rates, indices and commodities.
The new market integrity rules cover risk management and give guidance on the obligations of market participants of the ASX 24 market for house accounts, supervisory policies and procedures, plus the minimum presence requirements for foreign market participants.
ASIC says there are now an increasing number of principal traders accessing ASX24 directly.
Sometimes their market access is structured so that the principal trader’s orders are routed directly through the terminal onto the trading platform and are subject to the terminal’s risk management system, but bypass the market participant’s order system.
Alternatively they access the market as a client of another market participant on the ASX 24 market, and then the principal trader’s orders are subject to the market participant’s order system and the terminal’s risk management system. In those cases, ASIC has given certain waivers to the new set of risk management rules, because effectively, such traders are already controlled by the systems of the market participant that they are routing through.