The Australian government is to hand total responsibility for supervision of the country’s financial markets to the Australian Securities and Investment Commission (ASIC), the country’s financial regulator, giving renewed hope to alternative equity trading venues looking to compete with the Australian Securities Exchange (ASX).
Once legislation is passed, ASIC will take over the role of supervision of market participants, a function that is currently performed by ASX and its independent disciplinary tribunal. The change is expected to be completed by the third-quarter of 2010.
The reforms – which have been under discussion for almost two years – are expected to pave the way for alternative trading venues to offer competing services to the ASX. AXE-ECN, Chi-X Global and Liquidnet, a non-displayed block trading venue, have all sought licences to offer full trading services in Australia. Liquidnet already offers block-crossing in Australia by acting as a reporting broker on the ASX.
ASX will continue the supervision of the entities listed on its own market.
“I have assured the government that ASIC can take on these important responsibilities,” said Tony D’Aloisio, ASIC chairman, in a statement. “We will be working closely with ASX to ensure a smooth transition of market surveillance and participant supervision responsibilities to ASIC. In addition, this will allow for a whole of market approach to market surveillance and participant supervision, should the government issue licences to new trading market operators.”