ASX MARKET RULES Guidance Note 19 – Automated Order Processing

Document Sample
ASX MARKET RULES Guidance Note 19 – Automated Order Processing Powered By Docstoc
					                                      Attachment B

ASX MARKET RULES
Guidance Note 19 – Automated Order Processing:
Certification
…


Material Changes

The Market Rules set out certain requirements prior to implementation of any proposed
material changes to an AOP system. There are additional requirements for material changes to
Automated Client Order Processing (“ACOP”) systems.

…

If the Trading Participant forms the view that there is a material change to the AOP
organisational and technical resources employed to comply with Rule 13.3.1 (having regard to
the factors referred to above), then:
    •   the Trading Participant will form the view that it is required to notify ASX that
        it has made material changes. The notification should include a broad functional
        description of the material changes to the AOP system. This may be an internally
        drafted description or a description provided by the third party supplier of the
        AOP system. If the product release notes address all the material changes this
        may be sufficient to satisfy this requirement.
    •   the in the case of ACOP systems,Trading Participants it will also be required to provide
        either:
            o confirmation, in the form set out in Procedure 13.3.5 and Appendix 13.3.5(a) to
                Rules, that the material change does not detract from a certification previously
                provided under Rule 13.3.4; or
            o further certification of the material changes, in the form set out in Procedure
                13.3.5 and Appendix 13.3.5(b) to Rules, concerning compliance with Rule
                13.3.4.

Trading Participants should discuss the requirement for confirmation or further certification
with their internal compliance teams.

If requested to form a view on whether a change to an AOP system is material or not ASX will,
in general, recommend that notification of a material change be provided and, in the case of an
ACOP system, confirmation or further certification in the form set out in Procedure 13.3.5 and
Appendix 13.3.5(a) or (b) to Rules be provided.

ASX also has the right to request a further certification of AOCOP systems at any time.
Confirmation or further certification for material ACOP changes and the migration to ITS

In addition to the factors set out above, a key consideration for Trading Participants using
ACOP systems will be whether or not they will be required to provide confirmation or further
certification of their ACOP systems as part of the migration to the Integrated Trading System
(“ITS”).

ASX’s view is that the major implication for ACOP systems will relate to changing the
connectivity from SEATS to ITS. However, consideration will also need to be given to whether
ACOP systems currently connected to CLICK XT will require confirmation or further
certification as a new version of CLICK will be released for the derivatives market.

Connectivity and qualification testing will be managed by the existing ASX testing processes.
The supported ITS participant test environment has been available to facilitate Trading
Participant’s preparations for this testing.

Whether or not confirmation or further certification of the material changes is also required is a
matter to which Trading Participants will need to give due consideration. ASX will not be
prescribing confirmation or further certification of the material changes as ASX does not have
intimate knowledge of the systems of each Trading Participant and the changes required to
those systems to accommodate the migration to ITS. It is less likely, but possible, that existing
derivatives ACOP systems connected to CLICK will require confirmation or further
certification of material changes.

What will determine whether or not confirmation or further certification of the material
changes is required depends upon how the ACOP system has been developed. Some ACOP
systems have integrated business logic throughout the applications and there is a higher
probability they will need to recertify. It is more likely that confirmation or further certification
of the material changes will be required if
    •new order types are to be allowed for ACOP;
    •alerts and warnings previously built into SEATS have to now be built into the ACOP
        systems; or
    •changes are required to handle the different messaging fields being introduced to ITS.


…