Australian Securities and Investments Commission Market Integrity Rules (Futures Markets) 2017 (Cth)

ASIC Market Integrity Rules (Futures Markets) 2017

made under subsection 798G of the Corporations Act 2001
Compilation No. 6
Compilation date: 15 October 2024

Includes amendments up to: ASIC Market Integrity Rules (Amendment) Instrument 2024/774 (F2024L01303)

Contents

Chapter 1: Introduction..................................................................................... 4
Part 1.1..... Preliminary 4
Part 1.2..... Waiver .............................................................................................. 6
Part 1.3..... Notice, notification and service of documents........................................ 7
Part 1.4..... Interpretation..................................................................................... 7
Part 1.5..... Participants of multiple Markets.......................................................... 16
Part 1.6..... Transitional 17
Chapter 2: Market Participants........................................................................ 18
Part 2.1..... Notification 18
Part 2.2..... Supervision and risk management...................................................... 18
Part 2.3..... Account reconciliation obligations....................................................... 28
Part 2.4..... Foreign Participants.......................................................................... 33
Chapter 3: Trading principles.......................................................................... 35
Part 3.1..... Trading principles for Orders entered on the Trading Platform................ 35
Part 3.2..... Strategy Trading.............................................................................. 43
Part 3.3..... Pre-negotiated business orders.......................................................... 43
Part 3.4..... Trading principles for Block Trades..................................................... 45
Part 3.5..... Trading principles for Exchange For Physical transactions..................... 45
Part 3.6..... Suspicious activity reporting............................................................... 46
Chapter 4: The Market operator....................................................................... 48
Part 4.1..... Provision of surveillance and supervision data by the Market operator.... 48
Part 4.2..... Provision of information about Market Participants................................ 49
Part 4.3..... Record keeping............................................................................... 49
Part 4.4..... Supervision and risk management...................................................... 50
Chapter 5: Crossing Systems.......................................................................... 52
Part 5.1AA Application 52
Part 5.1..... Reporting requirements for Crossing Systems..................................... 52
Part 5.2..... Disclosure requirements for Crossing Systems.................................... 53
Part 5.3..... Fair treatment, fairness and priority in dealing and opting out by users of Crossing Systems 57
Part 5.4..... Crossing Systems—Monitoring and suspicious activity reporting............ 58
Part 5.5..... Crossing System system controls....................................................... 60
Chapter 7: Margins and right of Close Out....................................................... 61
Part 7.1..... Interpretation................................................................................... 61
Part 7.2..... Obligations for Trading Participants.................................................... 62
Chapter 8: Extreme price movements.............................................................. 66
Part 8.1A.. Application 66
Part 8.1..... Order entry controls for Anomalous Orders.......................................... 66
Part 8.2..... Extreme Trade Range...................................................................... 67
Part 8.3..... Transparent cancellation policies........................................................ 71
Chapter 8A: Market operators—Critical Business Services, Information Security and Business Continuity Plans72
Part 8A.1.. Application and Definitions................................................................ 72
Part 8A.2.. Trading controls............................................................................... 73
Part 8A.3.. Critical Business Services................................................................. 73
Part 8A.4.. Information security.......................................................................... 76
Part 8A.5.. Business Continuity Plans................................................................. 77
Part 8A.6.. Governance.................................................................................... 79
Chapter 8B: Market Participants—Critical Business Services, Information Security and Business Continuity Plans........................................................................... 81
Part 8B.1.. Application and Definitions................................................................ 81
Part 8B.2.. Critical Business Services................................................................. 82
Part 8B.3.. Information security.......................................................................... 85
Part 8B.4.. Business Continuity Plans................................................................. 86
Part 8B.5.. Governance.................................................................................... 88
Schedule ........................................................................................................... 89
Form 1 Part 1 .................................................................................................... 89
Form 1 Part 2 .................................................................................................... 90
Endnotes .......................................................................................................... 92
Endnote 1—About the endnotes......................................................................... 92
Endnote 2—Abbreviation key............................................................................. 93
Endnote 3—Legislation history........................................................................... 94
Endnote 4—Amendment history......................................................................... 95

Chapter 1: Introduction

Part 1.1Preliminary

1.1.1Enabling legislation

ASIC makes this instrument under subsection 798G(1) of the Corporations Act.

1.1.2Title

This instrument is ASIC Market Integrity Rules (Futures Markets) 2017.

1.1.4Scope of these Rules

These Rules apply to:
(a)
the activities or conduct of the Markets;
(b)
the activities or conduct of persons in relation to the Markets; and
(c)
the activities or conduct of persons in relation to financial products traded on the Markets,
as specified in each Chapter, Part or Rule.

1.1.5Entities that must comply with these Rules

The following entities must comply with these Rules:
(a)
Market operators;
(b)
Market Participants; and
(c)
Other Regulated Entities,
as specified in each Rule.
1.1.5APenalties for a contravention of these Rules
The maximum pecuniary penalty payable for a contravention of a provision of these Rules is an amount determined by the Court under section 1317G of the Corporations Act.

1.1.6Conduct by officers, Employees or agents

In these Rules, conduct engaged in on behalf of a person:
(a)
by an officer, Employee, or other agent of the person, and whether or not within the scope of the actual or apparent authority of the officer, Employee, or other agent; or
(b)
by any other person at the direction or with the consent or agreement (whether express or implied) of an officer, Employee, or other agent of the person, and whether or not the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the officer, Employee, or other agent,
is deemed to have been engaged in by the person.

1.1.7State of mind of a person

(1) If for the purposes of these Rules in respect of conduct engaged in by a person, it is necessary to establish the state of mind of the person, it is sufficient to show that an officer, Employee, or other agent of the person, being an officer, Employee, or other agent by whom the conduct was engaged in and whether or not the conduct was within the scope of the actual or apparent authority of that officer, Employee, or other agent, had that state of mind.
(2) In subrule (1), a reference to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person’s reasons for the person’s intention, opinion, belief or purpose.

1.1.8Application for review by Administrative Review Tribunal of certain decisions made under these Rules

(1) Subject to this Rule, applications may be made to the Tribunal for review of a decision made by ASIC under:
(a) subrule 1.2.1(1); or
(b) subrule 1.2.1(3); or
(c) paragraph 2.2.1(2)(b); or
(d) paragraph 2.4.1(2)(f); or
(e) subrule 4.1.1(1); or
(f) subparagraph 4.1.1(1)(g)(vi); or
(g) subrule 4.1.1(2); or
(h) rule 4.3.3; or
(i) subrule 8.1.1(3); or
(j) subrule 8.1.4(3).
(2) An application made under subrule (1) may only be made by:
(a) in relation to paragraphs (a) and (b);
(i) the Market Participant that made the application for a waiver of a Rule under Rule 1.2.1;
(b) in relation to paragraphs (c) and (d);
(i) the Market Participant in respect of which the decision by ASIC was made;
(c) in relation to paragraphs (e) to (j);
(i) the Market operator in respect of which the decision by ASIC was made.
(3) In this Rule:
decision and Tribunal have the same meaning as in the Administrative Review Tribunal Act 2024.
1.1.9Notice of reviewable decision and review rights
(1) This Rule applies if ASIC makes a decision to which Rule 1.1.8 applies.
(2) ASIC must take such steps as are reasonable in the circumstances to give to each person who may make an application for review of the decision under Rule 1.1.8 notice, in writing or otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the Tribunal.
(3) A failure to comply with this Rule does not affect the validity of the decision.

Part 1.2Waiver

1.2.1Waiver of Rules

(1) Subject to Rule 1.2.3, ASIC may, by legislative instrument, relieve any person or class of persons from the obligation to comply with a provision of these Rules, either generally or in a particular case or category, and either unconditionally or subject to such conditions as ASIC thinks fit.
(2) If any conditions on a waiver given under subrule (1) are imposed, all of the conditions must be complied with for the waiver to be effective.
(3) ASIC may withdraw, by legislative instrument, a waiver given under subrule (1) at any time.
(4) Any request by a person for a waiver under subrule (1) must be in writing.
Note: Legislative instruments made under this rule are available on the Federal Register of Legislation. The register may be accessed at with conditions
Failure to comply with a condition imposed under Rule 1.2.1 is a contravention of this Rule.
1.2.3Period during which relief applies
ASIC may specify the period or specific event during which any relief from an obligation to comply with a provision of these Rules may apply.
1.2.4Register
(1) ASIC may establish and maintain a register for recording details of relief granted under Rule 1.2.1 and may enter the following details in the register:
(a)
the date that the relief takes effect;
(b)
the person or class of person relieved from the obligation;
(c)
the provision to which the relief applies;
(d)
brief reasons for the relief; and
(e)
any conditions that apply to the relief.
(2) ASIC may publish the register referred to in subrule (1).
Part 1.3Notice, notification and service of documents
1.3.1Market Participant to have email system
A Market Participant must acquire and maintain an operating email system for the purposes of receiving notices under these Rules.
1.3.2Methods of giving notice in writing
Unless otherwise specified in a Rule, ASIC may give notice under these Rules by any of the following methods:
(a)
delivering it to the recipient personally;
(b)
leaving it at or by sending it by courier or post to the address of the recipient last notified to ASIC;
(c)
sending it by facsimile to the recipient’s facsimile number last notified to ASIC;
(d)
a circular or bulletin addressed to a class of persons and delivered or communicated by any means permitted under this Rule;
(e)
specific email by any method which identifies a person or person’s title as addressee and no notice of non-delivery has been received;
(f)
broadcast email by any method which identifies the addressee and which, having regard to all the relevant circumstances at the time, was as reliable as appropriate for the purposes for which the information was communicated.
Part 1.4Interpretation
1.4.1References to time
In these Rules a reference to time is to the time in Sydney, Australia.
1.4.2Words and expressions defined in the Corporations Act
Words and expressions defined in the Corporations Act will unless otherwise defined or specified in these Rules or the contrary intention appears, have the same meaning in these Rules.
1.4.3Definitions
Anomalous Orde r means a:
(a)
Buy Order for which the price is above the maximum Anomalous Order Threshold for the relevant Equity Index Future or ASX SPI 200 Future; and
(b)
Sell Order for which the price is below the minimum Anomalous Order Threshold for the relevant Equity Index Future or ASX SPI 200 Future.
Anomalous Order Threshold means a threshold for an Equity Index Future or ASX SPI 200 Future determined under subrule 8.1.1(1).
Approved Foreign Bank has the meaning given by regulation 1.0.02 of the Corporations Regulations.
Approved Securities has the meaning given by:
(a)
when used in Chapter 7, Rule 7.1.1; and
(b)
otherwise, in relation to a Market, the operating rules of that Market.
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 (Cth).
ASX 24 means Australian Securities Exchange Limited (ACN 000 943 377).
ASX 24 Market means the financial market operated by ASX 24 under the Australian Market Licence (Australian Securities Exchange Limited) 2002.
ASX Clear (Futures) means ASX Clear (Futures) Pty Limited (ACN 050 615 864).
ASX Market means the financial market operated by ASX Limited (ACN 008 624 691) under Australian Market Licence (ASX Limited) 2002.
ASX SPI 200 Future means the contract over the market index known as the S&P/ASX 200, that is generally known as the “ASX SPI 200 Future” and that is admitted to quotation on the ASX 24 Market.
ASX Trade24 means the Order Book operated by ASX 24 and generally known as “ASX Trade24”, that is the central Order Book of ASX 24 for ASX SPI 200 Futures.
Auction in Part 8.2 of these Rules, means:
(a)
in relation to the ASX SPI 200 Future, an auction in the ASX SPI 200 Future on ASX Trade24; and
(b)
in relation to Equity Index Futures, an auction in the Equity Index Future on the central Order Book of the Responsible Market Operator for Equity Index Futures.
Bid means, in relation to a financial product, a price and quantity of the financial product to be purchased.
Block Trade means any trade which is executed via the Block Trade Facility.
Block Trade Facility, in relation to a Market, has the meaning given by the operating rules of that Market.
Block Trade Order, in relation to a Market, means an Order in a Contract prescribed by the operator of that Market which must be executed via the Block Trade Facility.
Call means the demand for payment of a sum of money made upon a Client.
CHESS Depositary Interest has the meaning given to the term “CDI” by Rule 2.13.1 of the operating rules of ASX Settlement Pty Limited (ACN 008 504 532).
Chi-X Market means the financial market operated by Chi-X Australia Pty Ltd (ACN 129 584 667) under Australian Market Licence (Chi-X Australia Pty Ltd) 2011.
Clearing Participant means, when used in relation to a Market, a person admitted as a participant under the Clearing Rules.
Clearing Rules means, when used in relation to a Market, the operating rules of the clearing and settlement facility with which the Market operator has clearing and settlement arrangements for transactions effected through the Market.
Client means:
(a)
in relation to a Market Participant, any person, partnership or corporation on behalf of whom the Market Participant enters, acquires or disposes of a Futures Market Contract or Option Contract, or on whose behalf the Market Participant proposes to enter, acquire or dispose of a Futures Market Contract or Option Contract or from whom the Market Participant accepts instructions to enter, acquire or dispose of Futures Market Contracts or Option Contracts;
(b)
for the purposes of Rule 2.2.2, includes all persons, partnerships and corporations related to, associated with or affiliated with the Client or otherwise financially dependent upon the Client;
(c)
for the purposes of Rule 2.2.6 and Part 2.3, excludes a related body corporate or a division of the Market Participant;
(d)
for the purposes of Rules 2.2.7, 3.1.1(1), 3.1.13, 3.1.14, 3.1.16 and 3.1.17 and Part 3.3, in respect of a Market Participant which is a corporation, includes a related body corporate or a division of the Market Participant which is separate from the Market Participant’s futures division; and
(e)
for the purposes of Rule 3.1.15, includes a related body corporate or a division of the Market Participant—which is separate from the Market Participant’s futures division.
Client Account means an account of a Client.
Client Order means an instruction, provided by a client to a Participant, to enter into a transaction or transactions.
Client Trade means a trade of a Market Participant held on behalf of a Client.
Close Out means to extinguish an Open Position by matching it with an offsetting Open Position and effecting the settlement of each such Open Position against the other.
Contract means a contract entered, acquired or disposed of on a Market or capable of being entered, acquired, or disposed of on a Market.
Controller means:
(a)
a person holding 20% or more of the total votes attached to voting shares of a Market Participant or a person who, together with Related Parties, holds 20% or more of such votes; or
(b)
a person who has the power to control a Market Participant, whether that power is direct or indirect or is, or can be, exercised as a result of, by means of, in breach of, or by revocation of, trusts, relevant agreements and practices, or any of them, and whether or not they are enforceable.
CorporationsAct means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations 2001 (Cth).
Cover means cash and/or Approved Securities as determined by a Market operator in relation to its Market, and held by a Market Participant against a Client’s liability from time to time.
Cross or Crossing, means a transaction in respect of which a Market Participant acts:
(a)
on behalf of both buying and selling clients to that transaction; or
(b)
on behalf of a buying or selling client on one side of that transaction and as Principal on the other side.
Crossing System means any automated service provided by a Market Participant which matches or executes client Orders with Orders of:
(a)
the Market Participant;
(b)
other clients of the Market Participant; or
(c)
any other person whose Orders access the automated service;
otherwise than on an Order Book.
Crossing System Initial Report has the meaning given by Rule 5.1.1.
Crossing System Monthly Report has the meaning given by Rule 5.1.2.
Employee, in relation to a Market Participant, includes a director, employee, officer, agent, Representative, consultant or adviser of that Market Participant, or an independent contractor who acts for or by arrangement with a Market Participant.
Equity Index Future means a Futures Market Contract over a market index, where that market index is comprised of more than one Equity Market Product.

Equity Market Product means:
(a)
a share in a body;
(b)
a financial product referred to in subparagraph 764A(1)(b)(i) or subparagraph 764A(1)(ba)(i) of the Corporations Act; or
(c)
a right (whether existing or future and whether contingent or not) to acquire, by way of issue, the following under a rights issue:
(i)
a share covered by paragraph (a); or
(ii)
a financial product covered by paragraph (b); or
(d)
a CHESS Depositary Interest,
admitted to quotation on the ASX Market or admitted to quotation on the Chi-X Market under the Chi-X Market operating rules, but does not include a CGS Depository Interest.
Error Trade means a trade transacted in error.
ETR Event means when:
(a)
an Order to buy an Equity Index Future or an ASX SPI 200 Future for which the Bid price is both above the Reference Price and in the Extreme Trade Range for the Equity Index Future or ASX SPI 200 Future (as applicable); or
(b)
an Order to sell an Equity Index Future or an ASX SPI 200 Future, for which the Offer price is both below the Reference Price and in the Extreme Trade Range for the Equity Index Future or ASX SPI 200 Future (as applicable),
is received by a Market operator and is not prevented from entering the relevant Market by the controls the Market operator has in place to comply with Rule 8.1.3.
Note: Under Rule 8.2.2B, an ETR Event occurs on a Market in the circumstances described in this definition whether or not the Buy Order or Sell Order is executed, in whole or in part, on the Market.
Exchange For Physical means a transaction where:
(a)
a bona fide physical transaction in a commodity or instrument is completed and physical delivery takes place at the time of the transaction or is intended by both parties to take place at a later time; and
(b)
at or about the same time a Contract, opposite in effect, is entered, acquired or disposed of by a Market Participant or two Market Participants, for the same or similar quantity or amount of the commodity or a substantially similar commodity or instrument between Market Participants, on behalf of the parties to the physical transaction.
Expression of Interest means an enquiry made to a Market Participant either:
(a)
to obtain the current best bid and/or offer in a particular Contract; or
(b)
to enquire as to the volume that may be obtained at a given price,
but is not a firm Order to buy or sell.
Extreme Trade Range:
(a)
in relation to ASX SPI 200 Futures, has the meaning given by subrule 8.2.1(1); and
(b)
in relation to Equity Index Futures, has the meaning given by subrule 8.2.1(2).
Family Company means a corporation:
(a)
controlled by the person or the Immediate Family of the person; or
(b)
in respect of which the person is beneficially entitled to more than 50% of the issued capital.
Family Trust means a trust in which:
(a)
the person or the Immediate Family of the person is the sole or majority beneficiary; or
(b)
the person has the ability to remove the trustee of the trust and replace that trustee with his or her own nominee.
FEX means FEX Global Pty Ltd (ACN 124 127 224).
FEX Market means the market operated by FEX under Australian Market Licence (FEX Global Pty Ltd) 2013.
Futures Market Contract, in relation to a Market, has the meaning given by the operating rules of that Market.
House Account means any account other than a Client Account.
Immediate Family in relation to a person, means that person’s spouse and any non-adult children.
Initial Margin means the amount which a Market Participant requires to be paid by a Client in respect of a Futures Market Contract entered into or proposed to be entered into on behalf of a Client.
Invalid, in relation to a price established by an auction, or the price of a transaction, means:
(a)
the price has resulted from an error;
(b)
the price is materially different from the price of the last transaction in the same, Equity Index Future or ASX SPI 200 Future (as applicable) on the same Order Book, and the difference in price is not, in the opinion of the relevant Market operator, readily attributable to an announcement that has been made to that Market or some other event; or
(c)
the price has resulted from a transaction that is otherwise required to be cancelled or amended by the operator of the Market on which the transaction is executed.
Margin means Initial Margin and Variation Margin.
Market means any of the following:
(a)
the ASX 24 Market;
(b)
the FEX Market.
Minimum Volume Threshold means the threshold determined by a Market operator under its operating rules, being the minimum number of lots in respect of each Contract.
Month means calendar month.
Non-Public Crossing System Information has the meaning given by subrule 5.2.2(5).
Offer means, in relation to a financial product, a price and quantity of the financial product to be sold.
Open Position An open position exists where the obligations under a Contract held by a party, which has not been closed out are yet to be performed and will refer as the context requires either to an open position as defined by the Clearing Rules of a Market, held by a Clearing Participant under the Clearing Rules for that Market, or to such an open position which is held by a Market Participant on the instructions of a client, including open positions held, where applicable on markets other than the Market.
Option or Option Contract means an option over:
(a)
a Futures Market Contract or a number of Futures Market Contracts; or
(b)
an option over an Underlying Physical,
as listed by a Market operator in relation to its Market.
Order means an instruction to enter into a Contract, or an instruction to amend or cancel a prior instruction to enter into a Contract.
Order Book means an electronic list of Orders maintained by or on behalf of a Market operator, on which those Orders are matched with other Orders in the same list.
Order System means a software application, satisfactory to a Market operator in relation to its Market, for entering Orders into the Trading Platform through a Terminal.
Other Regulated Entities means entities prescribed by regulations made for the purposes of paragraph 798H(1)(c) of the Corporations Act, that must comply with these Rules.
Participant means:
(a)
in relation to a Market, a person who is allowed to directly participate in the market under the operating rules of the Market other than as a recognised affiliate; or
(b)
in relation to a clearing and settlement facility, a person who is allowed to directly participate in the facility under the facility’s operating rules other than as a recognised affiliate.
Prescribed Person means, in relation to a Market Participant:
(a)
an Employee, a director, or a partner, of the Market Participant;
(b)
a Controller of the Market Participant or a related body corporate of that Controller;
(c)
the Immediate Family of a person referred to in paragraphs (a) or (b);
(d)
a Family Company and a Family Trust of a person referred to in paragraphs (a) to (c); and
(e)
where a Market Participant or a person referred to in paragraphs (a) to (d) is a body corporate, anybody corporate or other entity controlled by that body corporate.
Pre-Commencement Market Integrity Rules means:
(a)
the ASIC Market Integrity Rules (ASX 24 Market) 2010; and
(b)
the ASIC Market Integrity Rules (FEX Market) 2013.
Pre-Opening Period, in relation to a Market, has the meaning given by the operating rules of that Market.
Pre-Opening Phase, in relation to a Market, has the meaning given by the operating rules of that Market.
Principal, when used in Chapter 5 in the context of a Market Participant trading on its own behalf “as Principal”, includes a reference to the Market Participant trading on its own behalf or on behalf of any of the following persons:
(a)
a partner of the Market Participant;
(b)
a director or company secretary of the Market Participant;
(c)
a Substantial Holder of the Market Participant;
(d)
the Immediate Family, Family Company or Family Trust of a partner, director, company secretary or Substantial Holder of the Market Participant;
(e)
a body corporate in which the interests of one or more of the partners singly or together constitute a controlling interest of the Market Participant;
(f)
any related body corporate of the Market Participant,
and does not include where the Market Participant or a related body corporate of the Market Participant is trading as a trustee of a trust in which that trustee has a beneficial interest in the trust of less than 5%, and all of that interest was acquired in lieu of receipt of fees for administering the trust.
Principal Trader, in relation to a Market, has the meaning given by the operating rules of that Market.
Publicly Available Crossing System Information has the meaning given by subrule 5.2.1(2).
Related Party:
(a)
in relation to a body corporate:
(i)
has the meaning given by section 228 of the Corporations Act; or
(ii)
means a Substantial Holder of the body corporate;
(b)
in relation to a trust, which is not a registered management investment scheme, means the management company, trustee and their related parties within the meaning of section 228 of the Corporations Act;
(c)
in relation to a trust which is a registered managed investment scheme, means the responsible entity and a related party of the responsible entity under section 228 of the Corporations Act, as modified by section 601LA of the Corporations Act;
(d)
in relation to a person, means:
(i)
his or her spouse, de facto spouse, parent, son, or daughter, or a spouse or de facto spouse of that person;
(ii)
an entity over which one or more of the persons referred to in subparagraph (i) has control;
(iii)
an entity that he or she controls, or its holding company or which is controlled by the holding company;
(iv)
a person who acts, or proposes to act, in concert with anyone referred to above;
(v)
a person who was a related party in the previous six months, or who would be a related party in the future, under the tests in section 228 of the Corporations Act (applied with any necessary adaptation).
Representative has the meaning given by section 910A of the Corporations Act.
Responsible Market Operator means:
(a)
in relation to an Equity Index Future:
(i)
if offers to acquire or dispose of the Equity Index Future are made or accepted on only one Market, the operator of that Market; or
(ii)
if offers to acquire or dispose of the Equity Index Future are made or accepted on more than one Market, the Market operator determined by ASIC in writing; and
(b)
in relation to ASX SPI 200 Futures, ASX 24.
Note: Instruments made under paragraph (a)(ii) are available on the Federal Register of Legislation. The register may be accessed at Business means trading a position from the nearest delivery month to an equivalent position in a different delivery month.
Rules means these market integrity rules.
Strategy Trade, in relation to a Market, has the meaning given by the operating rules of that Market.
Substantial Holder when used in the definition of “Principal” in this Rule to refer to a Substantial Holder in a corporation, means a person who has or would have a substantial holding if Part 6C of the Corporations Act applied to that corporation.
Terminal means an automated Order entry interface through which an Order System routes Orders to the Trading Platform of a Market.
Trading Day for a Market means a day on which that Market is open for trading.
Trading Hours in relation to a Market, means the times during which:
(a)
Orders may be entered, amended or cancelled on the Order Books of that Market; and
(b)
Orders are matched and transactions are executed on a continuous basis on that Market,
and includes a time during which an Auction is conducted on the Market.
Trading Messages means those messages submitted into a Trading Platform relating to trading functions, such as orders, amendment or cancellation of orders and the reporting or cancellation of Market transactions on the Trading Platform.
Trading Participant, in relation to a Market, has the meaning given by the operating rules of that Market.
Trading Pause means a period during which a Market operator must prevent Orders from being matched or executed on its Market, but during which Bids and Offers may be displayed, entered, amended and cancelled.
Trading Platform means a facility made available by a Market operator to Participants of that Market for the entry of Trading Messages, the matching of Orders, the advertisement of invitations to trade and the reporting of transactions.
Trading Reset, in relation to an Equity Index Future or ASX SPI 200 Future, means each of a Trading Pause, Trading Suspension, and the end of Trading Hours for the Equity Index Future or ASX SPI 200 Future.
Trading Suspension means a halt or suspension in trading on a Market pursuant to the exercise of a power by a Market operator under its operating rules during which Orders may not be matched or executed on the relevant Market, but does not include a halt or suspension caused by a technical problem (including a power outage) affecting the technical infrastructure used by the Market operator for the purposes of receiving Trading Messages, matching and executing Orders and reporting transactions.
Underlying Physical means the asset, instrument, index, reference rate or any other thing, excluding a Futures Market Contract, whose price movement determines the value of the Contract.
Variation Margin means the difference between the value of a Futures Market Contract or Option Contract as shown in the contract, and the value of that contract at any given time.
Part 1.5Participants of multiple Markets
1.5.1Participants may rely on notifications
Where these Rules require a Market Participant to give to ASIC any document (however described) in relation to the Market Participant in relation to a Market, the Market Participant may give to ASIC the same document in relation to more than one Market, provided that:
(a)
the Market Participant has notified ASIC in writing that it intends to comply with these Rules by relying on that document, or on documents of that kind, in relation to each Market to which the document applies; and
(b)
the document contains all of the information that would be required to be in the document if it were given separately in relation to each Market.
Part 1.6Transitional
1.6.1Status of notifications and certifications given by a Market Participant under the Pre-Commencement Market Integrity Rules
(1) This Rule applies if:
(a)
a Market Participant gave ASIC a written notification or certification under the Pre-Commencement Market Integrity Rules; and
(b)
the notification or certification has not been withdrawn or otherwise ceased to have effect; and
(c)
the power or obligation in the Pre-Commencement Market Integrity Rules to give the notification or certification is incorporated under a corresponding provision in these Rules.
(1A) For the purposes of this Rule, a provision (old provision) of the Pre-Commencement Market Integrity Rules corresponds to a provision (new provision) of these Rules (and vice versa) if the old provision and the new provision are substantially the same.
(1B) For the purposes of subrule (1A), differences of all or any of the following kinds are not sufficient to mean that two provisions are not substantially the same:
(a)
differences in the numbering of the provisions;
(b)
differences of a minor technical nature (for example, differences in punctuation, or differences that are attributable to the correction of incorrect cross-references);
(c)
the fact that one of the provisions refers to a corresponding previous law and the other does not;
(d)
other differences that are attributable to the fact that these Rules apply to more than one Market.
(2) The notification or certification:
(a)
is taken to have been given to ASIC by the Market Participant under the corresponding provision in these Rules; and
(b)
will continue in its existing form, and continue to have the same effect under these Rules, as when given under the Pre-Commencement Market Integrity Rules.
Chapter 2: Market Participants
Part 2.1Notification
A Market Participant must notify ASIC as soon as practicable upon becoming aware that a Market operator or a regulatory agency is investigating or has instituted proceedings against it.
Part 2.2Supervision and risk management
2.2.1Limits and connections
(1) Limits
A Market Participant must demonstrate prudent risk management procedures including, but not limited to:
(a)
set and document appropriate pre-determined Order and/or position limits on each of its Client Accounts, including a volume per Order limit, an aggregate loss limit and an aggregate net session limit, based on the Market Participant’s analysis of the Clients’ financial resources or other relevant factors;
(ab) set and document appropriate pre-determined Order and/or position limits on each of its House Accounts, including a volume per Order limit, an aggregate loss limit and an aggregate net session limit, based on the Market Participant’s analysis of its financial resources or other relevant factors;
(b)
set and document maximum price change limits;
(c)
the limits determined in paragraphs (a), (ab) and (b) must be input by a Market Participant’s risk manager into Trading Platform account maintenance and will be established as preset accounts;
(d)
limit setting capability must exist in the Market Participant’s Order System which reflects prudent account risk management and the Order System must have Order rejection capability where Orders are in excess of limit parameters set by the Market Participant;
(e)
the Market Participant may amend the pre-determined Order and/or position limit based on the Market Participant’s analysis of the Clients’ financial resources (in the case of a Client Account) or its financial resources (in the case of a House Account) or other relevant factors;
(f)
Orders in excess of the agreed pre-determined limits must be rejected by the Market Participant’s Order System and may be rejected by the Trading Platform.
(2) Connections
(a)
A Market Participant who has permitted its Client to connect to a Terminal will be responsible under these Rules for any Orders entered through the Terminal by the Client.
(ab) A Market Participant who has connected to a Terminal for the purposes of trading for a House Account will be responsible under these Rules for any Orders entered through the Terminal.
(b)
ASIC may at any time by notice to a Market Participant, require a Market Participant to terminate a connection referred to in paragraph (a) or (ab) either generally or in relation to a particular individual, Client, system or device or class of system or device.
(c)
As soon as a Market Participant receives notification under paragraph (b), it must promptly take all steps necessary to terminate such connection.
(3) Obligations prior to Client connection
Prior to permitting any Client to connect to a Terminal a Market Participant must:
(a)
satisfy itself that the Client has the necessary skills, facilities and procedures to operate such a facility;
(b)
satisfy itself that the Client understands the risks and obligations attached to the use of such a facility;
(c)
ensure that each Order so placed, and any Order System complies with the Rules;
(d)
provide appropriate controls on the connection of its Clients and its staff to such systems;
(e)
provide appropriate controls on the access to passwords of its Clients and its staff to such systems; and
(f)
ensure appropriate controls are implemented for the security of its Clients’ premises and physical access of its Clients and its staff to such systems.
(4) Obligations in relation to proprietary connection
Prior to connecting to a Terminal for the purpose of trading for a House Account, and at all times while connected to a Terminal for the purpose of trading for a House Account, a Market Participant must:
(a)
have the necessary skills, facilities and procedures to operate such a facility;
(b)
understand the risk and obligations attached to the use of such a facility;
(c)
ensure that each Order so placed, and any Order System, complies with the Rules;
(d)
provide appropriate controls on the access to passwords of the Market Participant and its Employees to such systems; and

(e)
ensure appropriate controls are implemented for the security of its premises and physical access of the Market Participant and its Employees to such systems.

2.2.2Concentration of risk

(1) A Market Participant other than a Principal Trader must not permit any one Client to represent such a percentage of the trading by the Market Participant as may prejudice or diminish the ability of the Market Participant to meet its obligations under these Rules and at law.
(2) For the purposes of this Rule, Client includes all persons, partnerships and corporations related to, associated with or affiliated with the Client or otherwise financially dependent upon the Client.
2.2.3Persons involved in the business—Good fame and character requirement
(1) A Market Participant must ensure that any Employee or other person who is or will be involved in the business of the Market Participant in connection with that Market and, in the case of a body corporate, each director or Controller, is of good fame and character and high business integrity having regard to subrule (2).
(2) In assessing whether a person is of good fame and character and high business integrity for the purpose of subrule (1):
(a)
a person will not be of good fame and character if he or she is disqualified from managing a corporation under the Corporations Act or under the law of another country, or is an insolvent under administration or its equivalent in another country; and
(b)
a person may not be of good fame and character or high business integrity if the person has been:
(i)
convicted of any offence;
(ii)
disciplined by or adversely mentioned in a report made by, or at the request of, any government or governmental authority or agency;
(iii)
adversely mentioned in a report made by, or at the request of, a Market operator, a Clearing Facility, a Settlement Facility or any other exchange, market operator or clearing and settlement facility; or
(iv)
disciplined by a Market operator, a Clearing Facility, a Settlement Facility or any other exchange, market operator or clearing and settlement facility.
Note: Market operators are subject to an equivalent rule (see: Part 4.4).

2.2.4Order records and accounting records

(1) Client Orders
A Market Participant, other than a Principal Trader, must maintain internal records of instructions received from Clients and trades executed for Clients for a period of not less than five years from the date of the trade, containing the following information:
(a)
the nature of the instructions received, including information about: the commodity, the name of the Market, delivery Month, buy or sell, number of lots and price/limit;
(b)
the Client name/account number and Client ID;
(c)
the person who gave the instructions;
(d)
the time and date of receipt of the instructions, and the person who received the instructions;
(e)
the time and date of transmission of the instructions, and the person who transmitted the instructions; and
(f)
the time and date of execution of the instructions, the Market those instructions were executed on, and the person who executed the instructions.
(2) Proprietary Orders
A Market Participant must maintain records of its Representatives’ trading for a House Account for a period of not less than five years from the date of a trade, containing the following information:
(a)
the time and date of receipt of instructions;
(b)
the nature of the instructions received;
(c)
the person who received the instructions;
(d)
the time and date of transmission of those instructions, and the person who transmitted the instructions; and
(e)
the time and date of execution of those instructions, the Market those instructions were executed on and the person who executed the instructions.
(3) Error Trades
A Market Participant must maintain a separate record of all Error Trades for a period of not less than five years from the date of a trade, containing the following information:
(a)
a description of the trade including the Market where the trade was executed and the deal number supplied by the relevant Market operator (if any);
(b)
the name of the Representative responsible for the Error Trade;
(c)
the name of the Representative responsible for the execution of the trade;
(d)
a detailed explanation as to how the trade occurred, including details of the original Client Order (if any) which precipitated the error;
(e)
any subsequent action taken by the Market Participant in relation to that trade; and
(f)
the financial result of the trade.
(4) Accounting records
(a)
A Market Participant must maintain such accounting records as correctly record and explain the transactions of the Market Participant and the financial position of the Market Participant.
(b)
In relation to Calls, a Market Participant must at all times maintain such accounting records as accurately indicate in respect of each Call for Initial Margin or Variation Margin made upon Clients:
(i)
the date and time at which such Call was received;
(ii)
the amount of such Call;
(iii)
the extent to which the Call was payable by reason of:
(A)
trading undertaken by the Market Participant on its own account or an account of a related corporation; and
(B)
trading undertaken by the Market Participant for Clients, so that the amount of any such Call is apportioned accordingly;
(iv)
the extent to which the Call was met from:
(A)
monies in the Clients’ segregated account; and
(B)
other sources (specifying those sources and the amount satisfied from each such source); and
(c)
the date and time at which such Call was met.

2.2.5Client documentation

(1) Subject to subrule (2), a Market Participant must have in force, prior to the commencement of trading for a Client, a duly signed agreement with that Client, containing minimum terms to the following effect:
(a)
Client to provide information
In relation to the Client’s trading on a Market, the Client will upon the Market Participant’s request, provide all information and documentation relevant to that trading, to the Market Participant and the Market Participant is authorised by the Client to provide the information and documentation to ASIC.
(b)
Margins
Unless the Market Participant is performing executing business only and the Client has an agreement in place with a Clearing Participant for the Market where the Client’s trading will occur, or is otherwise exempted under these Rules, an acknowledgment by the Client that:
(i)
the Market Participant may Call for payment of Margin such money or property (or Call for the lodgement of Approved Securities in lieu thereof) as the Market Participant, in its absolute discretion, feels is necessary to protect itself from the personal obligation incurred by dealing in Contracts on behalf of the Client;
(ii)
should the Client fail to meet the Call (or lodge Approved Securities) then the Market Participant may (without prejudice to any other rights or powers under the agreement) and without creating an obligation to do so, Close Out, without notice, all or some of the Client’s Contracts;
(iii)
the time for payment of Margins is of the essence and if no other time is stipulated by the Market Participant prior to Calling a Margin then the Client is required to comply within 24 hours;
(iv)
liability to pay the Initial Margin accrues at the time the trade is executed regardless of when a Call is made;
(v)
liability to pay Variation Margin accrues at the time the Margin comes into existence regardless of when a Call is made; and
(vi)
the Client is responsible to pay in cash any deficit owing to the Market Participant after closure and that if the Client defaults in payment of such deficit, the Market Participant may realise any securities held by the Market Participant and apply the proceeds against that deficiency.
(c)
Tape recordings
An acknowledgment by the Client that the Client’s telephone conversations with the Market Participant can be recorded by the Market Participant. The Client is to be given the right to listen to any recording in the event of a dispute or anticipated dispute.
(d)
Right to refuse to deal
An acknowledgment by the Client that the Market Participant reserves the right to refuse to deal on behalf of the Client in relation to any dealings in Contracts (other than Closing Out existing Open Positions held in the Market Participant’s account on behalf of the Client) or limit the number of Open Positions held on behalf of the Client or both. The Market Participant will inform the Client of any refusal at or before the time of the Client placing the Order or as soon as possible thereafter.
(e)
Termination and Closing Out
An acknowledgment that:
(i)
without affecting any existing obligations or liabilities, either the Client or the Market Participant may terminate the agreement at any time by giving the other notice in writing to that effect; and
(ii)
upon termination of the Client agreement that unless otherwise agreed in writing the Market Participant will Close Out all the Client’s Futures Market Contracts and Close Out, abandon or exercise any Options not yet exercised.
(2) Exception
Subrule (1) does not apply:
(a)
to a Principal Trader;
(b)
where the Client is another Market Participant of the same Market, and the operating rules of the relevant Market provide that an agreement containing the terms of subrule (1) is deemed to have been entered and come into effect immediately upon the Market Participant accepting the first instruction from the Client to enter a Contract; or
(c)
where the Market Participant is performing execution business only and has an agreement in place with the Client that incorporates the provisions set out in the International Uniform Brokerage Execution Services (“Give-Up”) Agreement 2008 (both client and trader versions).

2.2.6Clients’ segregated account obligations

A Market Participant, who holds Client monies, must comply with the following:
(a)
Client money
(i)
All money received by the Market Participant from its Clients or by a person acting on behalf of the Client under these Rules or the operating rules of a Market must be deposited in an account maintained by the Market Participant and designated as a Clients’ segregated account.
(ii)
If the account is operated outside Australia and the law in force in the jurisdiction where it is maintained requires the account to be designated in a particular way, the Market Participant must designate the account in that way.
(iii)
Where omnibus accounts are operated by a Market Participant (e.g. on behalf of another broker), a House Account and Client Account are to be maintained separately at all levels in the chain to the clearing and settlement facility level.
(iv)
A Market Participant must not net off the Client Account against the House Account.
(b)
Type of money to be paid into an account
Only the following monies are permitted to be paid into a Clients’ segregated account:
(i)
all money received by the Market Participant from its Client or by a person acting on behalf of its Client;
(ii)
interest on the amount from time to time standing to the credit of the account;
(iii)
interest or other similar payments on an investment, and the proceeds of the realisation of an investment; and
(iv)
any other money as required by the Rules or operating rules of a Market or the law to be paid by the Market Participant into a Clients’ segregated account.
(c)
When money must be paid into an account
The money must be paid into a Clients’ segregated account on the day it is received by the Market Participant, or on the next business day.
(d)
Permitted withdrawal
Withdrawals from a Clients’ segregated account made in any of the following circumstances are permissible:
(i)
paying Margins and the settling of dealings;
(ii)
making a payment to, or in accordance with the written direction of, a person entitled to the money;
(iii)
defraying brokerage and other proper charges;
(iv)
paying to the Market Participant money to which the Market Participant is entitled, whether at law or under the Rules or under the operating rules of the Market where the Futures Market Contract or Option Contract was acquired, entered into or disposed of for the Client; and
(v)
making a payment that is otherwise authorised by law.
(e)
Payment to another Australian financial services licensee
(i)
If payment referred to in subparagraph (ii) is made by a Market Participant to the holder of an Australian financial services licence, the Market Participant must ensure that Australian financial services licensee is notified, at the same time as the payment is made or as soon as practicable after, that the money:
(A)
has been withdrawn from an account of the Market Participant maintained for this Rule; and
(B)
should be paid into an account of the Australian financial services licensee maintained for this Rule.
(ii)
If the Australian financial services licensee who receives the payment in subparagraph (i) is also a Market Participant, it must, not later than the day after it receives the payment, pay the money received into an account maintained by it for this Rule.
(f)
Requirement to deposit additional monies in Clients’ segregated account
(i)
Where five clear business days (inclusive of the day of the Call) after a Call has been made on a Client for Initial Margin or Variation Margin in accordance with the operating rules of the Market where the Futures Market Contract or Option Contract was acquired or entered into, or such Call should have been made in accordance with those operating rules, the Call which was or should have been made has not been satisfied by payment of monies into a Clients’ segregated account or lodgement of Cover, then the Market Participant must pay into the Clients’ segregated account an amount of money not less than either:
(A)
the liability of the Client under such a Call; or
(B)
the amount which the Market Participant would be obliged to Call the Client on the day after five clear business days (inclusive of the day of the Call) have elapsed,
(C)
whichever is the lesser.
(ii)
Subject to paragraph (f) such monies may only be withdrawn in accordance with paragraph (d) and only after such monies have been received by the Market Participant.
(iii)
The Market Participant must pay into the Clients’ segregated account after five clear business days, any amount (which has not been met by the Client), which arises as a result of debit balances of a Client resulting from realised losses or otherwise.
(g)
Prohibited agreements
A Market Participant is prohibited from making any agreement with a Client that the Client’s money is not to be held or does not need to be held in a segregated account for the benefit of the Client.
(h)
Permissible investments
Where a Market Participant invests money from a Clients’ segregated account, the following kinds of investments may be made:
(i)
investment in any manner in which trustees are for the time being authorised by law to invest trust funds;
(ii)
investment on deposit with an eligible money market dealer;
(iii)
investment on deposit at interest with:
(A)
an Australian ADI; or
(B)
an Approved Foreign Bank;
(iv)
the acquisition of cash management trust interests;
(v)
investment in a security issued or guaranteed by the Commonwealth or a State or Territory;
(vi)
investment on deposit with a licensed clearing and settlement facility; or
(vii)
an investment in accordance with the specific direction of a Client.
(i)
Monies invested
Where a Market Participant invests money from a Clients’ segregated account then:
(i)
the Market Participant must, prior to investing any amount, obtain the Client’s written agreement to the following matters:
(A)
the making of the investment;
(B)
how earnings on the investment are to be dealt with;
(C)
how the realisation of the investment is to be dealt with;
(D)
how any losses made on the investment are to be dealt with; and
(E)
the fee (if any) that the Market Participant proposes to charge for the investment; and
(ii)
such investment must be readily realisable and no less than 50% of monies invested must be on 24-hour call.
(j)
Separation of Market Participants’ trading liabilities from Clients’ trading liabilities
A Market Participant must not use a Clients’ segregated account to meet any Initial Margin or Variation Margin liabilities which relate to trading by that Market Participant on its own behalf or on behalf of a related corporation.
(k)
Accounting records for withdrawals
A Market Participant must at all times maintain such accounting records as accurately indicate each withdrawal from a Clients’ segregated account.
(l)
Definition of Client
For the purposes of this Rule, Client excludes a related body corporate or a division of the Market Participant.
(m)
Property
(i)
For the purposes of paragraph (m), property includes credit facilities and securities.
(ii)
On the receipt of property, a Market Participant must:
(A)
deposit the property in safe custody on or before the next business day after the property is received or deposited;
(B)
create and maintain the following records:
(I)
date property received/deposited in safe custody; and
(II)
particulars of the property so deposited.
(iii)
A Market Participant must keep Client property segregated from the Market Participant’s own property and Market Participants must be able to liquidate Client property as soon as practicable when required.
(iv)
A Market Participant must not use property held in safe custody to satisfy a Market Participant’s debt.
2.2.7Mandatory recording of information by Market Participants
(1) Recording by Market Participant
(a)
A Market Participant dealing with Clients must record, via telephone lines and/or other electronic device, at its own expense, all conversations with Clients and other parties relating to Client instructions.
(b)
A Market Participant must ensure that internal desks transmit all Orders to the futures desks in such a way that instructions are recorded via a telephone line or other electronic device.
(c)
Should circumstances arise where a Client has placed instructions in a manner where there is no electronic or other record, a Market Participant must ensure that the Client’s instructions are recorded in some manner.
(d)
Recordings and records maintained under this Rule must be retained for a minimum three month period.
(e)
Where a Representative of a Market Participant having the relevant conversation is doing so from outside Australia, under an arrangement whereby the Market Participant arranges for other Representatives of the global group to take Orders on behalf of the Market Participant during certain hours each Trading Day (rolling the book), the Market Participant must maintain recordings and records for the period which is customary for regulated intermediaries conducting similar trades in that jurisdiction to retain such records.
(f)
A Market Participant must ensure that all equipment used to record, including electronic devices, is functional at all times.
(g)
For the purposes of this Rule in respect of a Market Participant which is a corporation, a Client includes a related body corporate or a division of the Market Participant—which is separate from the Market Participant’s futures division.

2.2.8Supervisory procedures

A Market Participant must have appropriate supervisory policies and procedures to ensure compliance by the Market Participant and each person involved in its business as a Market Participant with these Rules, the operating rules of each Market of which it is a Participant, and the Corporations Act.

2.2.9Disclosure statement—Overseas clearing and settlement facility

(1) A Participant of a Market whose operator has clearing and settlement arrangements for transactions effected through the Market with a clearing and settlement facility licensed under subsection 824B(2) of the Corporations Act (overseas clearing and settlement facility) must disclose to each Client of the Participant located in Australia, before accepting the first order from the Client to enter into a transaction on the Market that will be cleared and settled by the overseas clearing and settlement facility, the differences between the Clients’ transactions being cleared and settled by the overseas clearing and settlement facility and a clearing and settlement facility licensed under subsection 824B(1) of the Corporations Act, including, but not limited to, the following:

(a)
the foreign country where the operator of the overseas clearing and settlement facility has its principal place of business, and that the foreign clearing and settlement facility is regulated primarily under the regulatory regime of that foreign country; and
(b)
that the rights and remedies of investors whose transactions are cleared and settled through the overseas clearing and settlement facility may differ from the rights and remedies of investors whose transactions are cleared and settled by a clearing and settlement facility licensed under subsection 824B(1) of the Corporations Act.
(2) Where a Participant is required to make disclosure to a Client under subrule (1) the Participant must obtain written acknowledgment from that Client that the disclosure required under subrule (1) has been made to it.
(3) A Participant must keep a record of each disclosure made under subrule (1) and each Client acknowledgment under subrule (2) for a period of five years.

Part 2.3Account reconciliation obligations

2.3.1Application of Part

(1) This Part applies to a Market Participant who holds Client monies.
(2) For the purposes of this Part:
ASX means ASX Limited (ACN 008 624 691).
ASX Clear means ASX Clear Pty Limited.
Client excludes a related body corporate or a division of the Market Participant.
Clients’ Segregated Account at Bank means the Total Third Party Client Monies held in the clients’ segregated account relating to futures contracts traded on any exchange.
Deposits with a Clearing Participant of FEX means the total amount of third-party client funds paid to a Clearing Participant for the FEX Market in relation to transactions in futures contracts.
Deposits with an Overseas Broker means the total amount of third-party client funds lodged with an Overseas Broker in relation to transactions in futures contracts.
Deposits with a Participant of ASX means the total amount of third-party client funds paid to a Participant of the ASX Market in relation to transactions in futures contracts.
Deposits with a Participant of ASX 24 means the total amount of third-party client funds paid to a Participant of the ASX 24 Market.
Deposits with a Participant of ASX Clear means the total amount of third-party client funds paid to a Participant of ASX Clear in relation to transactions in futures contracts.
Deposits with a Participant of ASX Clear (Futures) means the total amount of third-party client funds paid to a Participant of ASX Clear (Futures) in relation to transactions in futures contracts.
Deposits with a Participant of FEX means the total amount of third-party client funds paid to a Participant of the FEX Market.
Deposits with ASX Clear (Futures) Client Account means the total amount of third-party client funds, including margin amounts, lodged with ASX Clear (Futures) in relation to transactions in futures contracts.
Deposits with FEX Clearer Client Account means the total amount of third-party client funds, including margin amounts, lodged for transactions in futures contracts effected through the FEX Market with the clearing and settlement facility with which the FEX Market operator has clearing and settlement arrangements.
Director/Employee Monies means, in respect of transactions in futures contracts dealt on any exchange, the total amount of money received from:
(a)
any director, or officer, of the Market Participant; and
(b)
any employee of the Market Participant.
Overseas Broker means a broker whose principal place of business is located outside Australia.
Total Deposits means:
(a)
in Rule 2.3.2, the sum of subparagraphs 2.3.2(2)(c)(i)–(xii); and
(b)
in Rule 2.3.3, the sum of subparagraphs 2.3.3(3)(c)(i)–(xii).
Total Futures Client Monies means the total amount of money received from Clients in respect of transactions in futures contracts, including amounts relating to futures contracts traded on any exchange.
Total Third Party Client Monies means Total Futures Client Monies less Director/Employee Monies.
Variation means Total Third Party Client Monies less Total Deposits.

2.3.2Daily reconciliation of client funds

(1) A Market Participant must perform an accurate reconciliation, by 7.00 pm on the business day after the business day to which the reconciliation relates, of the aggregate balance held by it at the close of business on each business day in clients’ segregated accounts maintained under Rule 2.2.6 and the corresponding balance as recorded in the Market Participant’s accounting records.
(2) Each reconciliation referred to in subrule (1) must set out:
(a)
the date to which the reconciliation relates;
(b)
for both the day of the reconciliation and the prior day, the dollar amounts of:
(i)
Total Futures Client Monies;
(ii)
Director/Employee Monies; and
(iii)
Total Third Party Client Monies;
(c)
for both the day of the reconciliation and the prior day, the dollar amounts of:
(i)
Clients’ Segregated Account at Bank;
(ii)
Deposits with ASX Clear (Futures) Client Account;
(iii)
Deposits with FEX Clearer Client Account;
(iv)
Deposits with ASX Clear Client Account;
(v)
Deposits with a Clearing Participant of FEX;
(vi)
Deposits with a Participant of ASX Clear (Futures);
(vii)
Deposits with a Participant of FEX;
(viii)
Deposits with a Participant of ASX Clear;
(ix)
Deposits with a Participant of ASX 24;
(x)
Deposits with a Participant of ASX;
(xi)
Deposits with an Overseas Broker; and
(xii)
funds invested in accordance with section 981C(a) of the Corporations Act; and
(xiii)
Total Deposits;
(d)
the dollar amount of the Variation for both the day of the reconciliation and the prior day;
(e)
the percentage amount of the Variation for both the day of the reconciliation and the prior day;
(f)
an explanation of the reason for a Variation, if the dollar amount of the Variation is more than, or less than, zero; and
(g)
where the movement in Total Futures Client Monies is greater than 20% from the prior day, an explanation of the reason.

2.3.3Monthly reconciliation of clients’ funds

(1) A Market Participant must perform an accurate reconciliation, of the aggregate balance held by it at the close of business on the last business day of each calendar month in clients’ segregated accounts maintained under Rule 2.2.6 and the corresponding balance as recorded in the Market Participant’s accounting records.
(2) Each reconciliation referred to in subrule (1) must be given to ASIC by the last business day of the calendar month following the calendar month to which the reconciliation relates.
(3) Each reconciliation referred to in subrule (1) must set out:
(a)
the date to which the reconciliation relates;
(b)
for both the last business day of the month of the reconciliation and the last business day of the prior month, the dollar amounts of:
(i)
Total Futures Client Monies;
(ii)
Director/Employee Monies; and
(iii)
Total Third Party Client Monies;
(c)
for both the last business day of the month of the reconciliation and the last business day of the prior month, the dollar amounts of:
(i)
Clients’ Segregated Account at Bank;
(ii)
Deposits with ASX Clear (Futures) Client Account;
(iii)
Deposits with FEX Clearer Client Account;
(iv)
Deposits with ASX Clear Client Account;
(v)
Deposits with a Clearing Participant of FEX;
(vi)
Deposits with a Participant of ASX Clear (Futures);
(vii)
Deposits with a Participant of FEX;
(viii)
Deposits with a Participant of ASX Clear;
(ix)
Deposits with a Participant of ASX 24;
(x)
Deposits with a Participant of ASX;
(xi)
Deposits with an Overseas Broker;
(xii)
funds invested in accordance with paragraph 981C(a) of the Corporations Act; and
(xiii)
Total Deposits;
(d)
the dollar amount of the Variation for both the last business day of the reconciliation and the last business day of the prior month;
(e)
the percentage amount of the Variation for both the last business day of the month of the reconciliation and the last business day of the prior month;
(f)
an explanation of the reason for a Variation, if the dollar amount of the Variation is more than, or less than, zero; and
(g)
where the movement in Total Futures Client Monies is greater than 20% from the last business day of the prior month, an explanation of the reason.
(4) Each reconciliation created for the purposes of this Rule must contain a statement signed by a director or a person authorised in writing by a director, stating that the signatory believes, and has no reason not to believe, that the reconciliation is accurate in all respects.
2.3.4Obligation to notify ASIC about daily reconciliation
A Market Participant must notify ASIC, in writing, within two business days if:
(a)
a reconciliation required to be performed under Rule 2.3.2 has not been performed in accordance with Rule 2.3.2;
(b)
according to a reconciliation performed under Rule 2.3.2, Total Deposits is less than Total Third Party Client Monies; or
(c)
if it is unable to reconcile its clients’ segregated accounts under Rule 2.3.2.

2.3.5Annual declarations for clients’ funds

(1) A Market Participant must prepare and give to ASIC within three months of the end of the financial year of the Market Participant:
(a)
a directors’ declaration containing the information set out in Form 1 Part 1 of these Rules, authorised in the manner specified in subrule (2); and
(b)
an auditor’s report containing the information set out in Form 1 Part 2 of these Rules, signed by a partner or director of the audit firm.
(2) For the purposes of this Rule, a directors’ declaration must be authorised by:
(a)
two directors of the Market Participant whose names appear in the declaration; or
(b)
one director (first director) of the Market Participant and one representative of the Market Participant, whose names appear in the declarations, where the representative has been authorised by the board or by a director other than the first director.
(c)
two representatives of the Market Participant whose names appear in the declaration and who have been authorised by the board or each authorised by a different director of the Market Participant to give the declaration.

2.3.6Scope of audits

(1) A Market Participant must give its auditor access to its premises and Employees and all records, documents, explanations and other information required by the auditor in respect of any audit conducted under paragraph 2.3.5(1)(b).
(2) A Market Participant must:
(a)
not impose any limitation on the extent of any audit required under paragraph 2.3.5(1)(b); and
(b)
permit and direct the auditor to notify ASIC immediately if any limitation is imposed on the auditor, or if the auditor is hindered or delayed in the performance of the auditor’s duties.
(3) The records of each of the Market Participant’s nominee companies must be included in the audit under paragraph 2.3.5(1)(b).

Part 2.4Foreign Participants

2.4.1Minimum presence requirements

(1) This Rule applies to a Market Participant (Foreign Market Participant) that:
(a)
is a foreign entity; and
(b)
does not hold an Australian financial services licence.
(2) Before entering into a transaction on a Market, a Foreign Market Participant must provide ASIC with a deed of the Foreign Market Participant for the benefit of and enforceable by ASIC and the other persons referred to in subsection 659B(1) of the Corporations Act, which deed provides:
(a)
that the deed is irrevocable except with the prior written consent of ASIC;
(b)
that the Foreign Market Participant submits to the non-exclusive jurisdiction of the Australian courts in legal proceedings conducted by ASIC (including under section 50 of the ASIC Act) and, in relation to proceedings relating to a financial services law, by any person referred to in subsection 659B(1) of the Corporations Act and whether brought in the name of ASIC or the Crown or otherwise;
(c)
that the Foreign Market Participant covenants to comply with any order of an Australian court in respect of any matter relating to the activities or conduct of the Foreign Market Participant in relation to a Market or in relation to financial products traded on a Market, including but not limited to any matter relating to the Foreign Market Participant’s obligations under:
(i)
the ASIC Act;
(ii)
the Corporations Act;
(iii)
the Corporations (Fees) Act 2001;
(iv)
ASIC Supervisory Cost Recovery Levy Act 2017; and
(v)
ASIC Supervisory Cost Recovery Levy (Collection) Act 2017;
(d)
that if the Foreign Market Participant is not registered under Division 2 of Part 5B.2 of the Corporations Act:
(i)
the Foreign Market Participant must have at all times an agent who is:
(A)
a natural person or a company;
(B)
resident in this jurisdiction; and
(C)
authorised to accept, on behalf of the Foreign Market Participant, service of process and notices;
(ii)
the Foreign Market Participant must notify ASIC of any change to:
(A)
the agent; or
(B)
the name and address of the agent (if the agent is a company, address means the address of the registered office of the company); and
(iii)
service of process on the Foreign Market Participant in relation to legal proceedings conducted by ASIC (including under section 50 of the ASIC Act), and in relation to proceedings relating to a financial services law, by any person referred to in subsection 659B(1) of the Corporations Act and whether brought in the name of ASIC or the Crown or otherwise, can be effected by service on the agent;
(e)
that the deed applies notwithstanding that the Foreign Market Participant may have ceased to be a Market Participant; and
(f)
for such additional terms notified by ASIC in writing to the Foreign Market Participant.

Chapter 3: Trading principles

Part 3.1Trading principles for Orders entered on the Trading Platform

3.1.1Expressions of Interest

(1) A Market Participant must not enter an Order into a Trading Platform based on an Expression of Interest without first confirming with the Client that that Expression of Interest is a firm Order to buy or sell.
(2) For the purposes of subrule (1), in respect of a Market Participant which is a corporation, a Client includes a related body corporate or a division of the Market Participant—which is separate from the Market Participant’s futures division.

3.1.2False or misleading appearance

(1) A Market Participant must not offer to purchase or sell a Contract or deal in any Contract:
(a)
as Principal:
(i)
with the intention; or
(ii)
if that offer to purchase or sell or dealing has the effect, or is likely to have the effect,
of creating a false or misleading appearance of active trading in any Contract or with respect to the market for, or the price of, any Contract; or
(b)
on account of any other person where:
(i)
the Market Participant intends to create;
(ii)
the Market Participant is aware that the person intends to create; or
(iii)
taking into account the circumstances of the Order, a Market Participant ought reasonably suspect that the person has placed the Order with the intention of creating,
a false or misleading appearance of active trading in any Contract or with respect to the market for, or the price of, any Contract.
(2) For the purposes of paragraph (1)(a), a reference to a Market Participant offering to purchase or sell a Contract or deal in any Contract as Principal includes a reference to offering to purchase, sell or deal in any Contract on its own behalf or on behalf of the following persons:
(a)
a partner of the Market Participant;
(b)
a director of, company secretary of, or person who has a substantial holding in the Market Participant;
(c)
the spouse of, non-adult children of, family company of, or family trust of a partner, director, company secretary, or person who has a substantial holding in the Market Participant;
(d)
a body corporate in which the interests of one or more of the partners of the Market Participant singly or together constitute a controlling interest; and
(e)
a related body corporate of the Market Participant.
(3) For the purposes of subparagraph (1)(b)(iii), in considering the circumstances of the Order, the Market Participant must have regard to the following matters:
(a)
whether the Order or execution of the Order would be inconsistent with the history of or recent trading in that Contract;
(b)
whether the Order or execution of the Order would alter the market for, or the price of, the Contract;
(c)
the time the Order is entered or any instructions concerning the time of entry of the Order;
(d)
whether the person on whose behalf the Order is placed, or another person who the Market Participant knows to be a related party of that person, may have an interest in creating a false or misleading appearance of active trading in any Contract or with respect to the market for, or the price of, any Contract;
(e)
whether the Order is accompanied by settlement, delivery or security arrangements which are unusual;
(f)
where the Order appears to be part of a series of Orders, whether when put together with other Orders which appear to make up the series, the Order or the series is unusual having regard to the matters referred to in this subrule;
(g)
whether there appears to be a legitimate commercial reason for that person placing the Order, unrelated to an intention to create a false or misleading appearance of active trading in or with respect to the market for, or price of, any Contract;
(h)
whether the proposed transaction, bid or offer which is proposed will involve no change of beneficial ownership;
(i)
the frequency with which Orders are placed by a person;
(j)
the volume of Contracts the subject of each Order placed by a person; and
(k)
the extent to which a person amends or cancels an instruction to purchase or sell a Contract relative to the number of transactions executed for that person.

3.1.3Entering Orders without an intent to trade

(1) A Market Participant must not enter Orders where there does not exist an intent to trade.
(2) For the purposes of this Rule, circumstances which indicate that there does not exist an intent to trade include:
(a)
Orders which are entered at price limits substantially higher or lower than the previous settlement price of the specific Contract, or alternatively, entered with unusually large volume levels; or
(b)
placement, modification and cancellation of Orders during the Pre-Opening Phase, which are entered with intent to affect the opening price of any Futures Market Contract or Option Contract.
3.1.4Orders to be transmitted as soon as received
(1) Subject to subrule (3), subrule 3.3.1(1) and paragraph 3.4.1(b), a Market Participant must transmit Orders to a Trading Platform as soon as they are received.
(2) Subrule (1) applies to Orders that can, in accordance with Client instructions, be immediately transmitted to a Trading Platform and include “limit” and “market” Orders.
(3) Exceptions to subrule (1) are:
(a)
Orders that cannot be transmitted to a Trading Platform such as “market on close”, “stop loss” or “market if touched”;
(b)
“at best” Orders, provided these Orders are transmitted to a Trading Platform at such time as the Market Participant forms the view that the best price may be achieved; and
(c)
Orders where Client instructions preclude immediate transmission unless those instructions would cause the Market Participant to breach these Rules.
3.1.5Orders to be transmitted and executed in the sequence received
(1) Subject to subrule (2), subrule 3.3.1(1) and paragraph 3.4.1(b) a Market Participant must:
(a)
transmit Orders in the sequence in which they are received;
(b)
not leave an Order in a Trading Platform and then promote another Client Order to take the place of a cancelled Client Order;
(c)
not promote an Order to take the place of a cancelled Client Order;
(d)
reduce the volume of an aggregated Order by the amount remaining of a cancelled Order where a Client cancels an Order which was part of the aggregated Order; and
(e)
not engage in broking or offering of a favourable queue position.
(2) Orders may be transmitted and executed outside of the sequence in which they are received where Orders are aggregated under Rule 3.1.6.

3.1.6Aggregation of Orders

(1) Subject to subrule 3.3.1(1) and paragraph 3.4.1(d), a Market Participant must not aggregate Orders for entry into a Trading Platform unless permitted under subrules (2A) or (2B).
(2A) For the ASX 24 Market, the only types of Orders which, when received, may be aggregated for placement into the Trading Platform of the ASX 24 Market, are:

(c) protect confidential, market-sensitive and personal information from intentional or inadvertent disclosure to unauthorised individuals; and
(d) establish, implement and maintain emergency procedures and a plan for disaster recovery with periodic testing of backup facilities.

(f)
ensure that the Market Participant and its auditors are able to promptly, upon request, access books, records and other information of the Service Provider relating to the Critical Business Services; and
(g)
ensure that ASIC has the same access to all books, records and other information relating to the Critical Business Services and maintained by the Service Provider, that ASIC would have if not for the Outsourcing Arrangement; and
(h)
ensure that for each Outsourcing Arrangement, the Market Participant’s Board or a director or senior manager have confirmed that they have complied with the Market Participant’s obligations in this subrule and made a written attestation to that effect.
(2) The Market Participant must comply with subrule (1) in a manner that is appropriate to:
(a)
the nature, complexity and risks of the Outsourcing Arrangement; and
(b)
the materiality of the Outsourcing Arrangement to the Market Participant’s Participant Operations and Participant Services.
(3) In determining for the purposes of subrule (1) whether the Service Provider has the ability and capacity to provide the services covered by the Outsourcing Arrangement effectively, the Market Participant must take into account the extent to which the Service Provider is providing the same or similar services to other Market Participants.

Part 8B.3Information security

8B.3.1Information security

(1) A Market Participant must have adequate arrangements to ensure the confidentiality, integrity and availability of information obtained, held or used by the Market Participant in relation to its Participant Operations and Participant Services.

(2) Without limiting subrule (1), the arrangements referred to in that subrule must include:
(a)
arrangements to identify and document Information Assets that are integral to the provision of the Market Participant’s Participant Operations and Participant Services; and
(b)
controls, including automated controls, designed to prevent unauthorised access to Information Assets; and
(c)
controls for identifying, assessing, managing and monitoring for unauthorised access to Information Assets; and
(d)
arrangements designed to protect Information Assets from theft, loss or corruption.
(3) A Market Participant must have adequate arrangements to ensure the availability of access to data obtained, held or used by the Market Participant in its Participant Operations and Participant Services.
(4) Without limiting subrule (3), the arrangements referred to in that subrule must include arrangements designed to provide for the backup of the data and the timely recovery of the data in the event of any theft, corruption or loss of the data.
(5) A Market Participant must maintain, for a period of at least seven years after the relevant event, records of any:
(a)
unauthorised access to or use of its Critical Business Services that impacts the effective operation or delivery of those services; or
(b)
unauthorised access to or use of market-sensitive, confidential or personal information.

Part 8B.4Business Continuity Plans

8B.4.1 Business continuity

Business Continuity Plans
(1) A Market Participant must establish, implement and maintain plans (Business Continuity Plans) for effectively responding to an event (Major Event) that would or would be likely to cause significant disruption to the Market Participant’s Participant Operations or materially impact the Market Participant’s Participant Services.
Note: A Major Event may include the failure of a Critical Business Service, including one operated by a Service Provider, or an event such as a pandemic or influenza event, natural disaster, cyber-attack or power failure.
(2) A Market Participant’s Business Continuity Plans must be designed to enable:
(a)
continuity of the usual operation of the Market Participant’s Critical Business Services, Participant Operations and Participant Services during a Major Event; and
(b)
to the extent continuation of the usual operation of the Market Participant’s Critical Business Services, Participant Operations and Participant Services during a Major Event is not possible, timely and orderly restoration of those usual operations following the Major Event.
(3) A Market Participant’s Business Continuity Plans must be appropriate to the nature, scale and complexity of the Market Participant’s Critical Business Services, Participant Operations and Participant Services and to the Market Participant’s structure and location.
(4) Without limiting subrules (1) to (3), the Market Participant’s Business Continuity Plans must identify and address:
(a)
the type of Major Events that may impact the Market Participant’s Critical Business Services, Participant Operations and Participant Services; and
(b)
activation procedures including trigger conditions for enacting the Market Participant’s Business Continuity Plans; and
(c)
the potential impact Major Events may have on the Market Participant’s Critical Business Services, Participant Operations and Participant Services; and
(d)
the classification of types of Major Events according to the potential severity of the impacts referred to in paragraph (c); and
(e)
escalation procedures that are appropriate to the classification referred to in paragraph (d); and
(f)
the actions, arrangements and resources required to achieve the outcomes referred to in subrule (2); and
Note: The actions, arrangements and resources covered by this paragraph would include key operational functions and processes, staff, alternate suppliers/service providers, technology, alternative premises and other physical infrastructure.
(g)
specific objectives for the time taken to achieve the outcomes referred to in paragraph (2)(b); and
(h)
procedures for communicating during a Major Event with persons that may be impacted by the Major Event, for the purposes of ensuring those persons are adequately informed about:
(i)
the nature and impact of the Major Event; and
(ii)
the steps that are being taken or will be taken to manage the Major Event; and
(iii)
the likely timing of the steps referred to in subparagraph (ii); and
(iv)
the likely timing of the resumption of the usual operation of the Market Participant’s Critical Business Services, Participant Operations and Participant Services; and
(i)
any operational dependencies between the Market Participant and any other person that may affect the matters referred to in paragraphs (a) to (h).
(5) Without limiting paragraph (4)(i), a Market Participant must have in place adequate arrangements to ensure that the Market Participant is able to carry out its Business Continuity Plans with respect to any Critical Business Services the subject of an Outsourcing Arrangement.
Notification of a Major Event
(6) Without limiting paragraph (4)(h), a Market Participant must notify ASIC immediately upon becoming aware of a Major Event.
(7) If a notification is made under subrule (6), the Market Participant must within seven days of the notification provide ASIC with a written report detailing:
(a)
the circumstances of the Major Event; and
(b)
the steps taken to manage the Major Event.
Review, update and testing of plans
(8) A Market Participant must:
(a)
review and test its Business Continuity Plans and the arrangements referred to in subrule (5):
(i)
at a frequency and in a manner appropriate to the nature, scale and complexity of the Market Participant’s Critical Business Services, Participant Operations and Participant Services and to the Market Participant’s structure and location; and
(ii)
at a minimum:
(A)
each time there is a material change to the Market Participant’s Critical Business Services, Participant Operations and Participant Services or to the Market Participant’s structure and location; and
(B)
as soon as practicable after the occurrence of a Major Event; and
(C)
once every 12 months; and
(b)
update the Business Continuity Plans as required to ensure they comply with subrules (1) to (4).
Documentation of plans and testing
(9) A Market Participant must document:
(a)
its Business Continuity Plans; and
(b)
the scope and results of all reviews and testing performed in accordance with subrule (8),
and must maintain that documentation for a period of at least seven years from the later of the date it is created or the date it is last amended.

Part 8B.5Governance

8B.5.1Responsibility for compliance

(1) A Market Participant must have appropriate governance arrangements and adequate financial, technological and human resources to comply with its obligation under this Chapter 8B.
(2) Without limiting subrule (1), the arrangements referred to in that subrule must include arrangements for the Market Participant’s Board or senior management to have oversight of the establishment, implementation, maintenance, review, testing and documentation of the Market Participant’s Business Continuity Plans.

Schedule

Form 1 Part 1

DIRECTORS’ DECLARATION
CLIENT FUNDS
As directors of ....................[entity name] (“the Participant”), we are responsible for maintaining an effective internal control structure, including establishing and maintaining accounting records and effective internal controls designed to ensure compliance with the requirements of Rule 2.2.6 of the ASIC Market Integrity Rules (Futures Markets) 2017 in relation to clients’ segregated accounts.
In carrying out this responsibility, we have had regard to the interests of the clients and owners of the Participant, and to the general effectiveness and efficiency of the operations of the Participant.
In the opinion of the directors, the Participant maintained, in all material respects, during the.......[insert number] month period ended ............[insert date] suitably designed and effective internal controls to comply with the requirements of Rule 2.2.6 of the ASIC Market Integrity Rules (Futures Markets) 2017 in relation to clients’ segregated accounts.
.............................................................................................
Authorised in accordance with subrule 2.3.5(2)
............................................................................................
Name
......................................................................
Date
.............................................................................................
Authorised in accordance with subrule 2.3.5(2)
.............................................................................................
Name
......................................................................
Date

Form 1 Part 2

Annual Statement of Client Funds
Auditor’s Report
We have audited the accounting records and internal control policies and procedures (“internal controls”) of ..............................[entity name] (the “Participant”) designed to ensure compliance with the requirements of Rule 2.2.6 of the ASIC Market Integrity Rules (Futures Markets) 2017 (“Futures Markets Rules”) in relation to clients’ segregated accounts (the “Clients’ Segregated Accounts Rules”) in order to express an opinion about their effectiveness for the period/year ended .................[date] (“the Financial Year”).
The directors of the Participant are responsible for maintaining an effective internal control structure, including establishing and maintaining accounting records and effective internal controls designed to ensure compliance with the requirements of the Clients’ Segregated Accounts Rules. We have conducted an independent audit of the internal controls designed to ensure compliance with the requirements of the Clients’ Segregated Accounts Rules in order to express an opinion on them to the directors of the Participant for the Financial Year ended.........................[insert date].
Our audit has been conducted in accordance with Australian Auditing Standards and accordingly included such tests and procedures as we considered necessary in the circumstances. Our procedures included examination, on a test basis, of evidence supporting the Participant’s accounting records and operation of its internal controls in relation to compliance with the requirements of the Clients’ Segregated Accounts Rules. These procedures have been undertaken to form an opinion whether in all material aspects, the Participant maintained suitably designed and effective internal controls to ensure compliance with the requirements of the Clients’ Segregated Accounts Rules for the Financial Year.
This report has been prepared for the Participant in order to meet its obligations to give this report to ASIC in accordance with paragraph 2.3.5(1)(b) of the Futures Markets Rules. We disclaim any assumption of responsibility for reliance on this report to any person other than the Participant and ASIC, or for any purpose other than that for which it was prepared.
Inherent Limitations
Because of the inherent limitations of any internal control structure it is possible that fraud, errors or noncompliance with laws and regulations may occur and not be detected. Further, the overall internal control structure, within which the internal controls designed to ensure compliance with the requirements of the Clients’ Segregated Accounts Rules operate, has not been audited, and no opinion is expressed as to its effectiveness.
An audit is not designed to detect all weaknesses in internal controls or all instances of noncompliance with the requirements of the Clients’ Segregated Accounts Rules as it is not performed continuously throughout the period/year and the tests performed over the internal controls are on a sample basis having regard to the nature and size of the Participant.
Any projection of the evaluation of internal controls to future periods is subject to the risk that the internal controls may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate.
The audit opinion expressed in this report has been formed on the above basis.
[Qualified] Auditor’s Opinion
In our opinion, [except for the matters referred to in the qualification below,] the Participant maintained, in all material respects during the Financial Year, suitably designed and effective internal controls to comply with the requirements of the Clients’ Segregated Accounts Rules.
Qualification (if applicable)
Name of Audit Firm ........................................................................................................
Director’s/Partner’s Signature ........................................................................................................
Name of director/Partner ........................................................................................................
Address of Audit Firm ........................................................................................................
Date .......................................................................................................

Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes
Endnote 2—Abbreviation key
Endnote 3—Legislation history
Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.

If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.

Endnote 2—Abbreviation key

ad = added or inserted	orig = original
am = amended	par = paragraph(s)/subparagraph(s)
amdt = amendment	/sub‑subparagraph(s)
c = clause(s)	pres = present
C[x] = Compilation No. x	prev = previous
Ch = Chapter(s)	(prev…) = previously
def = definition(s)	Pt = Part(s)
Dict = Dictionary	r = regulation(s)/rule(s)
disallowed = disallowed by Parliament	reloc = relocated
Div = Division(s)	renum = renumbered
exp = expires/expired or ceases/ceased to have	rep = repealed
Effect	rs = repealed and substituted
F = Federal Register of Legislation	s = section(s)/subsection(s)
gaz = gazette	Sch = Schedule(s)
LA = Legislation Act 2003	Sdiv = Subdivision(s)
LIA = Legislative Instruments Act 2003	SLI = Select Legislative Instrument
(md not incorp) = misdescribed amendment cannot be given effect	SR = Statutory Rules
(md incorp) = misdescribed amendment can be given effect	Sub‑Ch = Sub‑Chapter(s)
mod = modified/modification	SubPt = Subpart(s)
No. = Number(s)	underlining = whole or part not
o = order(s)	commenced or to be commenced
Ord = Ordinance

Endnote 3—Legislation history

Instrument number	Date of FRL registration		Date of commencement (underlined = not yet commenced)	Application, saving or transitional provisions
ASIC Market Integrity Rules (Futures Markets) 2017 (F2017L01475)	16/11/2017		07/05/2018	-
ASIC Market Integrity Rules (Securities Markets and Futures Markets 2018 (No.1) (F2018L00585)	03/05/2018		04/05/2018	-
ASIC Market Integrity Rules (Securities Markets and Futures Markets) Amendment Instrument 2022/74 (F2022L00294) as amended by ASIC Market Integrity Rules (Securities Markets and Futures Markets) Amendment Instrument 2022/329 (F2022L00751)	09/03/2022 08/06/2022		Schedule 2: 10/03/2023 Schedule 2: 09/06/2022	- -
ASIC Market Integrity Rules (Securities Markets and other ASIC-Made Rules) Amendment Instrument 2022/117 (F2022L00295) as amended by ASIC Market Integrity Rules (Securities Markets and Futures Markets) Amendment Instrument 2022/329 (F2022L00751)	09/03/2022 08/06/2022		Schedule 2 items 1-5: 10/03/2022 Schedule 2 items 6, 7, 9, 10: 06/04/2022 Schedule 2 items 8, 11, 12: 10/06/2022 Schedule 3: 09/06/2022	- -
ASIC Market Integrity Rules (Amendment) Instrument 2024/774 (F2024L01303)	14/10/2024	15/10/2024

Endnote 4—Amendment history

Provision affected	How affected
Rule 1.1.3	rep. s48D LA
Rule 1.1.3A	rep. s48C LA
Rule 1.1.3 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.1.4 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.1.5 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.1.5A	ad. F2022L00295, Schedule 2, item [5]
Rule 1.1.6 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.1.7 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.1.8 (heading)	am. F2024L01303 ,Schedule 1, item [3]
Rule 1.1.8	ad. F2022L00295, Schedule 2, item [6]
Subrule 1.1.8(3)	Am. F2024L01303, Schedule 1, item [4]
Rule 1.1.9	ad. F2022L00295, Schedule 2, item [6]
Rule 1.2.1	rs. F2022L00295, Schedule 2, item [7]
Rule 1.2.1 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.2.2 (Penalty)	rep. F2022L00295, Schedule 2, item [3]
Rule 1.2.3 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.2.4 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.3.1 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.3.2 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.4.1 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.4.2 (Note)	rep. F2022L00295, Schedule 2, item [4]
Rule 1.5.1 (Note)	rep. F2022L00295, Schedule 2, item [4]

Rule 1.6.1 (Note)

rep. F2022L00295, Schedule 2, item [4]

Part 2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.2.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.2.3

rs. F2022L00295, Schedule 2, item [8]

Rule 2.2.3 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.2.4 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.2.5 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.2.6 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.2.7 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.2.8 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.2.9 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.3.2 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.3.3 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.3.4 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.3.5 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 2.3.6 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 2.4.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.2 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.3 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.4 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.5 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Subrule 3.1.6(2A) (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Subrule 3.1.6(2B) (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.7 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.8 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.9 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.10 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.11 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.12 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.13 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.14 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.15 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.1.16 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.1.17 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 3.2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.3.1 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 3.3.1A (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.3.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.3.3 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 3.4.1 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 3.4.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.4.3 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.4.4 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.4.4

rs. F2022L00295, Schedule 2, item [9]

Rule 3.5.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.5.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.5.3

rs. F2022L00295, Schedule 2, item [10]

Rule 3.5.3 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 3.6.1

ad. F2022L00295, Schedule 2, item [11]

Rule 3.6.2

ad. F2022L00295, Schedule 2, item [11]

Rule 4.1.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 4.1.2 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 4.2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 4.3.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 4.3.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 4.3.3 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 4.4.1

ad. F2022L00295, Schedule 2, item [12]

Rule 5.1.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.1.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.2.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.2.3 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.3.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.3.2 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 5.3.3 (Penalty)

rs. F2018L00585, Schedule 1, item [6]

Rule 5.3.3 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 5.3.4 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.4.1 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 5.4.2 (Penalty)

rep. F2022L00295, Schedule 2, item [1]

Rule 5.4.3 (Penalty)

rep. F2022L00295, Schedule 2, item [1]

Rule 7.2.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.1A.1 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 8.1.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.1.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 8.1.3 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.1.4 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.2.1 (Note)

rep. F2022L00295, Schedule 2, item [4]

Rule 8.2.2 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 8.2.2A (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.2.2B (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.2.2C (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.2.3 (Penalty)

rep. F2022L00295, Schedule 2, item [2]

Rule 8.2.4 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8.3.1 (Penalty)

rep. F2022L00295, Schedule 2, item [3]

Rule 8A.1.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.1.2

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.2.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.3.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.3.2

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.3.3

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.4.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.5.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8A.6.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.1.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.1.2

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.2.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.2.2

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.2.3

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.3.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.4.1

ad. F2022L00294, Schedule 2, item [1]

Rule 8B.5.1

ad. F2022L00294, Schedule 2, item [1]