The Australian Securities and Investments Commission (ASIC) has said its new rules covering high frequency trading and dark pools will be phased in over an 18-month period.
In the wake of the Government's policy approach announced by the Minister for Financial Services, Bill Shorten, ASIC chairman Greg Medcraft said the new rules represented "an appropriate policy and regulatory balance".
"Developments in trading and market structure domestically and abroad are rapidly shifting the landscape of the Australian market, and we see a trend towards more frequent, smaller trades, away from public markets, with implications for the price information process," he said.
ASIC has outlined rules which it says respond to the growth in high frequency trading, including amendments to the existing anomalous order threshold and extreme cancellation range rules as well as a tightening of the rules around automated trading.
On dark liquidity, ASIC has signaled that market operators and participants will need to have in place systems and controls ensuring validation and verification of trades, along with greater data verification.
