ASIC Market Integrity Rules (Securities Markets) Determination 2019/175

Administered by Department of the Treasury

Legislation au F2019L00267 Not in force Legislative Instrument

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EXPLANATORY STATEMENT for
ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

 

The Australian Securities and Investments Commission (ASIC) makes ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176 (the Repeal Instrument) under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017 (the Rules).

Under subrule 6.2.1(4), ASIC may determine Tier 1 Equity Market Products and Tier 2 Equity Market Products in writing.

Under subrule 6.2.1(5), an instrument referred to in subrule (4) takes effect from 20 business days following the date the instrument is registered.

Under subsection 33(3) of the Acts Interpretation Act 1901 where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Under subsection 13(1) of the Legislation Act 2003, if enabling legislation confers on a person the power to make a legislative instrument or notifiable instrument, then unless the contrary intention appears, the Acts Interpretation Act 1901 applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of the Act. Accordingly, the power under subrule 6.2.1(4) of the Rules to determine Tier 1 Equity Market Products and Tier 2 Equity Market Products in writing, includes a power to repeal such a determination.

Capitalised terms in this Explanatory Statement refer to defined terms in the Rules.

 

  1.                                             Background

Chapter 6 of the Rules sets out market integrity rules relating to pre-trade transparency of Orders and post-trade transparency of transactions executed on or reported to a Market, including in relation to Equity Market Products. A ‘Block Trade’ is a key concept in Chapter 6 and has the meaning given by subrule 6.2.1(1).

For a transaction to be a Block Trade, among other things, the consideration for the transaction may not be less than consideration thresholds set out in paragraph 6.2.1(1)(c) of the Rules, which differ according to whether the Relevant Product is a Tier 1 Equity Market Product, Tier 2 Equity Market Product, Tier 3 Equity Market Product or a CGS Depository Interest.

Under subrule 6.2.1(4) of the Rules, ASIC may determine Tier 1 Equity Market Products and Tier 2 Equity Market Products by instrument in writing.

The Determination maintains ASIC’s policy of determining the allocation of Equity Market Products to tiers based on a periodic calculation of 2.5% of each product’s average daily value transacted in the preceding six-month period (or other material number of Trading Days if the product was not quoted during the entire period).

The Repeal Instrument, together with the Determination, supersede and repeal the determinations in ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131 (Superseded Determination).

 

2.                                                Purpose of the instruments

The purpose of the Determination is to determine, for the purposes of paragraph 6.2.1(1)(c) of the Rules and with effect from its commencement, the Tier 1 Equity Market Products and the Tier 2 Equity Market Products.

The purpose of the Repeal Instrument is to repeal the Superseded Determination, which will be superseded by the Determination upon its commencement.

The Determination and the Repeal Instrument maintain the existing policy settings under ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131.

 

3.                                                Operation of the instruments

ASIC Market Integrity Rules (Securities Markets) Determination 2019/175

Name of legislative instrument

Section 1 provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Determination 2019/175.

Commencement

Section 2 of the instrument provides that the instrument commences on the later of:

(a)  5 April 2019; and

(b) 20 business days after the day the instrument is registered on the Federal Register of Legislation.

Authority

Section 3 of the instrument provides that the instrument is made under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017.

Interpretation

Section 4(1) of the instrument provides that, unless the contrary intention appears, capitalised terms have the same meaning as in the Rules.

Subsection 4(2) of the instrument provides that ‘stock code’, in relation to an Equity Market Product, means the unique symbol assigned to the Equity Market Product under Rule 9.2.3 of the Rules.

Tier 1 Equity Market Products and Tier 2 Equity Market Products

Subsection 5(1) of the instrument provides that each Equity Market Product whose stock code is set out in the table in Schedule 1 to the instrument is a Tier 1 Equity Market Product.

Subsection 5(2) of the instrument provides that each Equity Market Product whose stock code is set out in the table in Schedule 2 to the instrument is a Tier 2 Equity Market Product.

Schedule 1

Schedule 1 provides that a specified Equity Market Product (referred to by its stock code) is a Tier 1 Equity Market Product.

Schedule 2

Schedule 2 provides that a specified Equity Market Product (referred to by its stock code) is a Tier 2 Equity Market Product.

ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176

Name

Section 1 of the instrument provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176.

Commencement

Section 2 of the instrument provides that the instrument commences on the day that is the later of:

(a)  5 April 2019; and

(b) the day that is 20 business days after the day the instrument is registered on the Federal Register of Legislation.

Authority

Section 3 of the instrument provides that the instrument is made under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017.

Schedule

Section 4 of the instrument provides that each instrument that is specified in Schedule 1 to this instrument is repealed as set out in the applicable items in the Schedule.

Schedule 1—Repeal

Item 1 of Schedule 1 to the instrument specifies that the whole of the ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131 is repealed.

 

4.                                                Consultation

In November 2010 and October 2011, ASIC consulted on its policy of determining the allocation of Equity Market Products to tiers based on a periodic calculation of average daily value in Consultation Paper 145 Australian equity market structure: Proposals and with further refinements in Consultation Paper 168 Australian equity market structure: Further proposals respectively.

There has been no consultation on the Determination or the Repeal Instrument because they are minor and machinery in nature.

A Regulatory Impact Statement is not required for the instruments as they maintain the existing policy settings in force under ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131 and its predecessors.

 


Statement of Compatibility with Human Rights

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

 

ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176

ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176 (the Repeal Instrument) are 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.

 

Overview

Chapter 6 of the ASIC Market Integrity Rules (Securities Markets) 2017 (the Rules) sets out market integrity rules relating to pre-trade transparency of Orders and post-trade transparency of transactions executed on or reported to a Market, including in relation to Equity Market Products. A ‘Block Trade’ is a key concept in Chapter 6 and has the meaning given by subrule 6.2.1(1).

For a transaction to be a Block Trade, among other things, the consideration for the transaction may not be less than consideration thresholds set out in paragraph 6.2.1(1)(c) of the Rules, which differ according to whether the Relevant Product is a Tier 1 Equity Market Product, Tier 2 Equity Market Product, Tier 3 Equity Market Product or a CGS Depository Interest.

Under subrule 6.2.1(4) of the Rules, ASIC may determine Tier 1 Equity Market Products and Tier 2 Equity Market Products by instrument in writing.

Under subsection 33(3) of the Acts Interpretation Act 1901 where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Under subsection 13(1) of the Legislation Act 2003, if enabling legislation confers on a person the power to make a legislative instrument or notifiable instrument, then unless the contrary intention appears, the Acts Interpretation Act 1901 applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of the Act. Accordingly, the power under subrule 6.2.1(4) of the Rules to determine Tier 1 Equity Market Products and Tier 2 Equity Market Products in writing, includes a power to repeal such a determination.

The Determination maintains ASIC’s policy of determining the allocation of Equity Market Products to tiers based on a periodic calculation of 2.5% of each product’s average daily value transacted in the preceding six-month period (or other material number of Trading Days if the product was not quoted during the entire period).

The Repeal Instrument repeals the ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131 (Superseded Determination). The Determination will supersede the Superseded Determination upon its commencement.

 

Human rights implications

These legislative instruments do not engage any of the applicable rights or freedoms.

 

Conclusion

These legislative instruments are compatible with human rights as they do not raise any human rights issues.

 

Australian Securities and Investments Commission

Overview

The ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176 were enacted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 to address the need for updated and consistent regulations on equity market products. These legislative instruments were introduced to maintain the existing policy settings established in the ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131, ensuring the ongoing classification of equity market products into different tiers based on their average daily value transacted over a specified period. The Determination and the Repeal Instrument maintain the policy of determining the allocation of equity market products to tiers, thus ensuring regulatory clarity and consistency in market integrity rules. The Determination takes effect from the later of 5 April 2019 or 20 business days after its registration on the Federal Register of Legislation, while the Repeal Instrument also commences under the same conditions, effectively superseding the previous determination. These instruments are compatible with human rights, as they do not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 and the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176 are legislative instruments made by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. The Determination specifies the Equity Market Products that are classified as Tier 1 and Tier 2, which are categories used to determine consideration thresholds for Block Trades. The Repeal Instrument repeals the previous Determination from 2018, which is replaced by the new Determination. Both instruments maintain the existing policy of classifying Equity Market Products based on their average daily value transacted over the preceding six-month period. The instruments apply nationally and affect market participants involved in trading Equity Market Products on Australian securities markets. The Determination and the Repeal Instrument came into effect on 5 April 2019 or 20 business days after registration, whichever is later. The instruments do not require consultation or a Regulatory Impact Statement as they are minor and machinery in nature, maintaining existing policy settings. These legislative instruments are compatible with human rights as they do not raise any human rights issues.

Key Provisions

The ASIC Market Integrity Rules (Securities Markets) Determination 2019/175 (the Determination) and the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/176 (the Repeal Instrument) are legislative instruments created by the Australian Securities and Investments Commission (ASIC) under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017 (the Rules). The Determination (Section 3) is made under subrule 6.2.1(4) of the Rules, and the Repeal Instrument (Section 3) is also made under subrule 6.2.1(4) of the Rules. The instruments are designed to determine Tier 1 Equity Market Products and Tier 2 Equity Market Products in writing, and to repeal the ASIC Market Integrity Rules (Securities Markets) Determination 2018/1131 (Superseded Determination) respectively. The Determination (Section 5) specifies which Equity Market Products are classified as Tier 1 or Tier 2 based on their stock codes listed in Schedules 1 and 2. The Repeal Instrument (Schedule 4) repeals the Superseded Determination, which will be superseded by the Determination upon its commencement. These instruments maintain the existing policy settings that were previously established under the Superseded Determination. The Determination and the Repeal Instrument impose obligations on ASIC to periodically assess and classify Equity Market Products into tiers based on a calculation of their average daily value transacted over the preceding six months. This assessment ensures that market transparency rules are appropriately applied to different types of securities, which in turn helps maintain market integrity and investor protection. The Determination and the Repeal Instrument also ensure that the regulatory framework remains up to date and aligned with the evolving market conditions. Breach of the rules and regulations set forth by these instruments can lead to various consequences. Specifically, non-compliance with the market integrity rules can result in financial penalties, reputational damage, and potential legal action against the parties involved. Under the Corporations Act 2001, individuals or entities found to be in breach of the rules may face civil penalties, which can include significant fines. In more serious cases, criminal penalties may apply, including imprisonment for directors or officers found to be willfully breaching the rules. Additionally, the Australian Securities and Investments Commission has the authority to take enforcement actions such as banning individuals from managing corporations or disqualifying directors. These instruments do not require consultation as they are considered minor and machinery in nature, and a Regulatory Impact Statement is not necessary because they maintain existing policy settings. The instruments are compatible with human rights, as they do not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

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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.