ASIC has today made recommendations to improve ASX Limited’s (ASX) compliance with its market licence obligations, following an assessment of the AQUA market for exchange traded products (ETPs) operated by ASX.
Report 644 Assessment of ASX’s arrangements for exchanged traded AQUA products makes recommendations focusing on three key areas:
AQUA market governance, risk and strategy
arrangements for operating the market, including supervision and enforcement of compliance with the AQUA rules
human resourcing of the AQUA market.
The AQUA ETP market is a comparatively new area of operation for ASX. As new market segments grow and become increasingly sophisticated, we expect market operators to review, revise and adapt their arrangements for operating the market accordingly—and to be aware of incremental changes to the market over time. Our recommendations are aimed at challenging ASX to more proactively set the direction and standards for this market segment in the next phase of its development.
Other ETP market operators regulated by ASIC are encouraged to review the findings and recommendations to determine what is applicable to their market operation.
ASIC will monitor ASX’s implementation of our recommendations to ensure that this work is completed in a timely manner.
ASIC Commissioner Cathie Armour said, ‘It is essential for market operators with a listing or admission function to remain focused on the effective discharge of their gatekeeper responsibilities. Our assessment of ASX’s AQUA market highlights the importance of review and continuous improvement by the market operator to ensure that the growth of the market does not outpace the sophistication of processes and systems to operate and monitor it.’
