Bloomberg News

ASIC Starts Second Consultation on Equity Market Structure

October 19, 2011

(Adds ASIC comment in third paragraph.)

Oct. 20 (Bloomberg) -- The Australian Securities and Investments Commission said it started a second consultation on equity market structure ahead of the launch of a rival exchange operator to ASX Ltd.

The paper considers the impact of high-frequency trading and extreme price movements, as well as making proposals on pre- trade transparency, ASIC said today in a statement on its website. Industry submissions to the consultation are open until Jan. 20.

“We have an efficient regulatory framework with controls in place to enable competition,” Belinda Gibson, ASIC’s deputy chairman, said in the statement. “The next step is to consider how emerging trading issues will impact our market over the coming years. It is appropriate to address these issues in a multi-market environment now competition is imminent.”

Chi-X Australia Pty will start competing with the nation’s main stock exchange operator at the end of the month after the market regulator said earlier this week that it met license preconditions.

Traditional bourses are facing rising competition from alternative systems such as so-called dark pools, off-exchange platforms that offer investors anonymity and don’t publicly display prices.

Chi-X will be the first foreign-owned market operator since Australia’s original stock market opened in the southern city of Melbourne in 1861.

The latest consultation follows one that took place in March -- before Chi-X’s service was approved by the government - - that focused on “market integrity” rules.

--Editor: John McCluskey.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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