ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1)

Administered by Department of the Treasury

Legislation au F2015L00625 Rules Not in force Legislative Instrument

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ASIC MARKET INTEGRITY RULES (NSXA MARKET) AMENDMENT 2015 (NO. 1)

EXPLANATORY STATEMENT

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

Summary

This Instrument repeals Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA Market) 2010 (ASIC Market Integrity Rules (NSXA)).

Rule 4.3.2 imposes an obligation upon a Market Participants to provide the Australian Securities and Investments Commission (ASIC) with a copy of a certificate evidencing the Market Participant's relevant insurance policy. Other obligations in relation to the insurance of a Market Participant (including the requirement to take out and maintain a relevant insurance policy) will remain.

A Market Participant will no longer be required to comply with Rule 4.3.2.

ASIC is repealing this rule because it considers that it poses an unnecessary regulatory burden. ASIC considers that this rule no longer provides a commensurate regulatory benefit.

Capitalised terms used in this Explanatory Statement (e.g. “Market Participant”) are defined in the ASIC Market Integrity Rules (NSXA).

  1. Operation of this Instrument

Details of the Instrument are contained in Attachment A.

Rule 4.3.2 requires a Market Participant of the NSXA Market to provide ASIC with a copy of a certificate evidencing the insurance policy referred to in Rule 4.3.1.  Rule 4.3.1 requires a Market Participant to take out and maintain in full force and effect an insurance policy or policies covering and indemnifying the Market Participant against liability for negligence, errors, omissions, misstatements, statutory warranties and indemnities, and loss, destruction or deprivation of Securities or other documents of title. The certificate must be provided to ASIC as soon as practicable after renewal of an insurance policy. 

Breach of Rule 4.3.2 carries a maximum penalty of $100,000.

We consider the requirement for a Market Participant to provide ASIC with a copy of a certificate evidencing it's insurance policy to be an unnecessary administrative burden on Market Participants. Market Participants will continue to be subject to the obligation in Rule 4.3.1 to take out, and maintain in full force and effect, an insurance policy as specified above.. Failure to comply with the obligation in Rule 4.3.1 carries a maximum penalty of $100,000. 

Market Participants are also required to immediately notify ASIC in writing of the existence of any claim or the receipt of a notice from any person of any intention to make a claim  under the insurance policy referred to in Rule 4.3.1.

ASIC does not consider that there is a need for an additional requirement to confirm a Market Participant’s ongoing compliance with the requirement to hold insurance.

It is not ASIC’s practice to assess the adequacy of insurance and, as such, there is no utility for ASIC to receive copies of certificates evidencing insurance policies held by Market Participants.

2.     Consultation

ASIC consulted on the amendments made by this Instrument in Consultation Paper 222 Reducing red tape: Proposed amendments to the market integrity rules (CP 222). In CP 222 we consulted on proposals to repeal certain market integrity rules including Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA).

Submissions to CP 222 were received from a variety of stakeholders, including market operators, Market Participants and industry associations such as the Australian Financial Markets Association, Law Council of Australia and Stockbrokers Association of Australia.

There was unanimous support for the proposal to repeal Rule 4.3.2.

3.     Background

Enabling legislation

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

The ASIC Market Integrity Rules (NSXA) apply to:

(a)   the activities or conduct of the financial market operated by National Stock Exchange of Australia Ltd (ACN 000 902 063) (NSXA);

(b)   the activities or conduct of persons in relation to the NSXA Market; and

(c)   the activities or conduct of persons in relation to financial products traded on the NSXA Market.

ASIC Market Integrity Rules (NSXA) modelled on market operator rules

On 24 August 2009, the Australian Government announced its decision to transfer the responsibility for supervising Australia’s domestic licensed financial markets from market operators to ASIC. To support this decision, the Corporations Amendment (Financial Market Supervision) Act 2010 commenced on 1 August 2010. It inserted a new Part 7.2A into the Corporations Act which grants ASIC the power to make market integrity rules dealing with activities and conduct in relation to licensed financial markets, including participants of the relevant market.

During the transfer of responsibility for market supervision, ASIC’s public policy was to refrain from making substantive policy changes to obligations that applied to market participants of the various existing financial markets including the NSXA Market. This facilitated a streamlined transfer of supervision with minimal disruption to industry.

Harmonisation of market integrity rules

ASIC is currently undertaking a project to ‘harmonise’ some or all of the market integrity rulebooks. The amendments in this Instrument form part of this initiative.

4.     Commencement of the Instrument

The Instrument will commence on the day after the day on which the Instrument is registered under the Legislative Instruments Act 2003.

5.     Statement of Compatibility with Human Rights

A Statement of Compatibility with Human Rights is included in this Explanatory Statement at Attachment B.

6.      Regulation Impact Statement

A Regulation Impact Statement is not required for the Instrument because it will have a minor regulatory impact.
ATTACHMENT A

Paragraph 1 – Enabling Legislation

This paragraph provides that the Instrument is made under subsection 798G(1) of the Corporations Act 2001.

Paragraph 2 – Title

This paragraph provides that the title of the Instrument is the ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1).

Paragraph 3 – Commencement

This paragraph provides that the Instrument commences on the day after the day on which this Instrument is registered under the Legislative Instruments Act 2003.

Paragraph 4 – Amendments

This paragraph provides that Schedule 1 amends the ASIC Market Integrity Rules (NSXA Market) 2010.

Schedule 1 - Amendments

Item [1] Rule 4.3.2

Item [1] of Schedule 1 to the Instrument repeals Rule 4.3.2.


ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1)

This Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

  1. Overview of the Instrument
  1. This Instrument repeals Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA Market) 2010 (ASIC Market Integrity Rules (NSXA)). A Market Participant will no longer be required to comply with this market integrity rule.
  2. The Australian Securities and Investments Commission (ASIC) is repealing this rule because it considers that it poses an unnecessary regulatory burden. ASIC considers that this rule no longer provides a commensurate regulatory benefit.

Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA)

3.      Rule 4.3.2 imposes the obligation upon a Market Participant to provide ASIC with a copy of certificate evidencing the Market Participant's insurance policy referred to in Rule 4.3.1.  Rule 4.3.1 requires a Market Participant to take out and maintain in full force and effect an insurance policy or policies covering and indemnifying the Market Participant against liability for negligence, errors, omissions, misstatements, statutory warranties and indemnities, and loss, destruction or deprivation of Securities or other documents of title.

4.      Market Participants will continue to be subject to the obligation under Rule 4.3.1 to take out and maintain in full force and effect an insurance policy as specified above.  ASIC does not consider that there is an additional need for ASIC to receive a copy of a certificate evidencing the insurance policy to confirm a Market Participant’s ongoing compliance with the requirement to hold insurance.

5.      It is not ASIC’s practice to assess the adequacy of insurance and, as such, there is no utility for ASIC to receive copies of certificates evidencing insurance policies held by Market Participants.. Accordingly, this rule no longer serves a regulatory benefit.

Further Background

6.      This Instrument is made under subsection 798G(1) of the Corporations Act. This Instrument amends the ASIC Market Integrity Rules (NSXA) which apply to:

(a)   the activities or conduct of the financial market operated by National Stock Exchange of Australia Ltd (ACN 000 902 063) (NSXA);

(b)   the activities or conduct of persons in relation to the NSXA Market; and

(c)   the activities or conduct of persons in relation to financial products traded on the NSXA Market.

7.      This Instrument repeals Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA). A breach of Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA) incurs a penalty.

B.     Human rights implications

8.       The Instrument does not engage any of the applicable human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

C.    Conclusion

9.      The Instrument is compatible with human rights as it does not raise any human rights issues.

D.    Consultation

10.   ASIC consulted on the amendments effected by this Instrument in Consultation Paper 222 Reducing red tape: Proposed amendments to the market integrity rules (CP 222). In CP 222 we consulted on proposals to repeal certain market integrity rules including Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA).

11.  Submissions to CP 222 were received from a variety of stakeholders, including market operators, market participants and industry associations such as the Australian Financial Markets Association, Law Council of Australia and Stockbrokers Association of Australia.

12.   There was unanimous support for the proposal to repeal Rule 4.3.2.

Australian Securities and Investments Commission

 

Overview

The ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1) was enacted to address an unnecessary regulatory burden imposed by Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA Market) 2010. This amendment was made by the Australian Securities and Investments Commission (ASIC) under subsection 798G(1) of the Corporations Act 2001. The rule required market participants to provide ASIC with a copy of their insurance certificates, which ASIC deemed to be an unnecessary administrative burden given that it did not assess the adequacy of insurance policies. The repeal of Rule 4.3.2 was aimed at reducing red tape while maintaining other insurance-related obligations on market participants, thereby streamlining regulatory requirements without compromising the integrity and stability of the financial market.

Scope and Application

The ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1) is an instrument made under subsection 798G(1) of the Corporations Act 2001. This amendment repeals Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA Market) 2010, which previously imposed an obligation on Market Participants to provide the Australian Securities and Investments Commission (ASIC) with a copy of a certificate evidencing their relevant insurance policy. The repeal of Rule 4.3.2 was prompted by ASIC's consideration that the rule presented an unnecessary regulatory burden without providing commensurate benefits. Despite this repeal, other obligations concerning insurance, such as the requirement to maintain a relevant insurance policy, remain intact. The ASIC Market Integrity Rules (NSXA) apply to the activities or conduct of the financial market operated by National Stock Exchange of Australia Ltd, the activities or conduct of persons in relation to the NSXA Market, and the activities or conduct of persons in relation to financial products traded on the NSXA Market. The amendment aims to streamline the regulatory framework and reduce administrative burdens on Market Participants while maintaining essential safeguards.

Key Provisions

The ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1) primarily targets the repeal of Rule 4.3.2 of the ASIC Market Integrity Rules (NSXA Market) 2010, as referenced in section 1 of the Explanatory Statement. Rule 4.3.2 previously mandated that Market Participants provide the Australian Securities and Investments Commission (ASIC) with a copy of a certificate evidencing their relevant insurance policy. Despite the repeal of this rule, Market Participants remain obligated to take out and maintain a relevant insurance policy, as specified in Rule 4.3.1. Market Participants must ensure that their insurance policies cover and indemnify them against liability for negligence, errors, omissions, misstatements, statutory warranties and indemnities, and loss, destruction, or deprivation of securities or other documents of title. They must also notify ASIC immediately in writing of any claim or receipt of a notice from any person indicating an intention to make a claim under the insurance policy. The Act imposes several obligations on Market Participants. Firstly, they must take out and maintain a relevant insurance policy in full force and effect, as per Rule 4.3.1. This policy must provide comprehensive coverage against various liabilities. Secondly, Market Participants are required to promptly notify ASIC of any claims made against them or any notices indicating an intention to make a claim under their insurance policy. These obligations are crucial for maintaining the integrity and reliability of the financial market operated by the National Stock Exchange of Australia Ltd (NSXA). The repeal of Rule 4.3.2 does not affect the penalties associated with non-compliance. A breach of Rule 4.3.2, which is now repealed, would previously have incurred a maximum penalty of $100,000. However, non-compliance with Rule 4.3.1, which remains in effect, also carries a maximum penalty of $100,000. This penalty serves as a deterrent against negligence or failure to maintain adequate insurance coverage. The enforcement of these penalties ensures that Market Participants adhere to the necessary standards of conduct and risk management, thereby protecting the interests of stakeholders and maintaining market integrity. In summary, the ASIC Market Integrity Rules (NSXA Market) Amendment 2015 (No. 1) simplifies the regulatory framework by repealing an administratively burdensome rule while maintaining essential obligations for Market Participants. This amendment aims to reduce unnecessary paperwork without compromising the regulatory standards required to protect market integrity and participant liabilities.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.