Asic takes over regulation of exchange trading

The Australian government has ended self-regulation of the Australian Securities Exchange (ASX), making the Australian Securities and Investments Commission (Asic) responsible for supervising trading on Australian stock markets from the third quarter of 2010.

Asic will take over responsibility from ASX and the independent Disciplinary Tribunal. ASX, however, will keep the authority for the supervision of companies listed on the licensed financial markets.

"Asic is now closer to the market, more accessible, flexible and able to take emerging trends into account more quickly," said Tony D'Aloisio, Asic's chairman, when explaining Asic's suitability for the role.

The change will see Asic working with ASX and industry bodies such as the Australian Financial Markets Association and the Securities and Derivatives Industry Association. A more detailed explanation of the execution of this switch will be provided once the legislative framework is in place, the Australian Treasury added.

The new mechanism will put ASX on a more equal regulatory footing with its aspiring rivals. Three companies have applied for licences to trade in the Australian market. The Axe consortium is backed by the New Zealand NZX exchange, Citigroup, Goldman Sachs JB Were, Macquarie and Bank of America Merrill Lynch, along with Australian brokers CommSec. US marketplace Liquidnet and European trading platform Chi-X have also applied.

See also: Australia lifts ban on short selling