ASX receives positive ASIC assessment
Shared by: DanPaulli
MEDIA RELEASE 19 July 2005 ASX welcomes positive ASIC assessment The Australian Stock Exchange has welcomed the Australian Securities and Investments Commission’s finding that ASX is supervising its markets to ensure they are fair, orderly and transparent. ASIC’s positive assessment of ASX covered its handling of conflicts between its commercial interests and the need to ensure that the market operates in a fair orderly and transparent manner, monitoring the conduct of market participants and enforcing compliance with its listing and market rules. The assessment is available at www.asic.gov.au “This is good news for ASX and for all our stakeholders who have helped maintain our markets’ reputation for high integrity and we thank them for their efforts. Maintaining that reputation is paramount to the success of ASX and instils confidence in those who participate in the markets we operate,” ASX Managing Director and CEO Tony D’Aloisio said. ASIC commends ASX for its substantial progress in strengthening its arrangements for supervising its markets and for monitoring and assessing its own compliance with its obligations as a market licensee. ASIC particularly commends ASX’s work on corporate governance with the Corporate Governance Council. Importantly, ASIC notes that “none of the suggestions for improvements…detracts from the conclusion that ASX’s arrangements have met and continue to meet their statutory obligations.” ASX has embraced ASIC’s suggestions and has actioned all of them. The attachment provides more detail on what ASX is doing. “Continuous improvement is very much part of our culture and, indeed, the supervision review we have announced is very much about improving efficiency and effectiveness, and strengthening our supervisory function to add resources where necessary,” Mr D’Aloisio said. For further information Media: Investors and analysts: Gervase Greene Dimitri Burshtein ASX Corporate Relations Investor Relations Manager (BH) +61 2 9227 0464 (BH) +61 2 9227 0279 (Mobile) 0419 496 703 (Mobile) 0414 629 751 Continuous improvement ASX has already responded, or is responding, to all of ASIC’s suggestions for improvements including: Continuous Disclosure ASX has given ASIC significant detailed analysis to explain the apparent lack of consistency between state offices. While variances can relate to the profile of companies in each State, ASX has also implemented improvements, including: • a revised Guidance Note on 29 June 2005 about its continuous disclosure policy and internal guidance to staff about the application of the policy. • revised record-keeping practices (including contemporaneous recording of continuous disclosure activity); • improved monitoring and analysis of its supervision of continuous disclosure to ensure greater consistency. Warrants Market ASX has acted upon each of the specific suggestions on the warrants market raised by ASIC. ASX has appointed an independent expert to review supervisory arrangements and the rules framework in the warrants market. That report is expected by the end of July and ASX will implement the recommendations made in the report. Although warrants trades accounted for 2% of SEATS trades and less than 3% of all trading revenue in 2003/04, implementing the improvements is nonetheless a high priority for ASX. Structured Products ASX has restructured the supervisory arrangements for structured products, so that all supervisory decisions about admissions, waivers, periodic reports and market making obligations are now taken by the Supervision Division. Derivatives market supervision ASX has enhanced its derivatives-monitoring technology to implement all suggestions made by ASIC. This forms part of the final stage of implementation of ASX’s new upgraded automated surveillance system, SMARTS. This system has been under implementation since September 2004, and represents a significant commitment of resources by ASX to its supervisory obligations, at a cost of around $1.5 million. Rule amendment process ASIC has noted the promising trend of ASX adopting appropriate rule changes, rather than the use of routine waivers. ASX agrees that this trend needs to be measured over time.