The Australian Securities and Investments Commission (ASIC) has issued an edict to some of the largest participants on the Australian Securities Exchange (ASX) and other markets limiting the number of trades they can execute until further notice.
The move has been undertaken in the face of the COVID-19 and what ASIC described as record trading volumes over the past two weeks.
It said that while there was no disruption to market operations, there had been a significant backlog of work required to be undertaken over the weekend by exchanges and trading participants.
“If the number of trades executed continues to increase, it will put strain on the processing and risk management capabilities of market infrastructure and market participants,” the regulator said
“Accordingly, ASIC has issued directions under the ASIC Market Integrity Rules to a number of large equity market participants, requiring those participants to limit the number of trades executed each day until further notice,” it said.
“These directions require those firms to reduce their number of executed trades by up to 25% from the levels executed on Friday. This action will require high volume participants and their clients to actively manage their volumes. We do not expect these limits to impact the ability of retail consumers to execute trades.”
“ASIC will continue to closely monitor market conditions and take action where needed to ensure markets remain fair and orderly.”