ASIC Market Integrity Rules (Securities Markets) Determination 2019/536

Administered by Department of the Treasury

Legislation au F2019L00728 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT for
ASIC Market Integrity Rules (Securities Markets) Determination 2019/536 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537

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 2019/536 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537 (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 2019/175 (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 2019/175.

 

3.                                                Operation of the instruments

ASIC Market Integrity Rules (Securities Markets) Determination 2019/536

Name of legislative instrument

Section 1 provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Determination 2019/536.

Commencement

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

(a)  8 July 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 2019/537

Name

Section 1 of the instrument provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537.

Commencement

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

(a)  8 July 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 2019/175 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 2019/175 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 2019/536 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537

ASIC Market Integrity Rules (Securities Markets) Determination 2019/536 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537 (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.

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 2019/175 (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 2019/536 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537 were enacted to refine the categorisation of Equity Market Products under the Corporations Act 2001. The Australian Securities and Investments Commission (ASIC), exercising its authority under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017, determined the Tier 1 and Tier 2 Equity Market Products. The purpose of the Determination is to specify the products that fall under these tiers, while the Repeal Instrument serves to supersede and repeal the previous determination, ASIC Market Integrity Rules (Securities Markets) Determination 2019/175. Both instruments maintain existing policy settings and aim to ensure consistent application of market integrity rules by categorising equity market products based on their average daily value transacted over a six-month period. These instruments are designed to support the regulatory framework for securities markets in Australia, ensuring transparency and integrity in trading activities.

Scope and Application

The ASIC Market Integrity Rules (Securities Markets) Determination 2019/536 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537, collectively referred to as the instruments, are made under the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). These instruments are designed to determine Tier 1 and Tier 2 Equity Market Products in accordance with subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017. The Determination applies to the specified Equity Market Products listed in Schedules 1 and 2, identifying which products are classified as Tier 1 or Tier 2 based on their average daily value transacted over the preceding six-month period. The Repeal Instrument serves to repeal the ASIC Market Integrity Rules (Securities Markets) Determination 2019/175, which is superseded by the Determination upon its commencement. Both instruments apply nationally across Australia, and they do not specify any exclusions, exemptions, or thresholds beyond those already outlined in the ASIC Market Integrity Rules (Securities Markets) 2017. The instruments do not extend or restrict application through subordinate instruments but are consistent with existing policy settings under ASIC Market Integrity Rules (Securities Markets) Determination 2019/175.

Key Provisions

The ASIC Market Integrity Rules (Securities Markets) Determination 2019/536 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2019/537 are instrumental in determining and repealing specific categories of equity market products under the ASIC Market Integrity Rules (Securities Markets) 2017. The Determination (Section 1) identifies and classifies certain equity market products as Tier 1 or Tier 2 products based on their average daily value transacted over the preceding six months (Section 5). The Repeal Instrument (Section 1) nullifies the earlier ASIC Market Integrity Rules (Securities Markets) Determination 2019/175. Both instruments are designed to maintain existing policy settings while updating the classification of equity market products (Section 3). These instruments impose several obligations on parties and entities governed by the ASIC Market Integrity Rules. Primarily, they require that the listed equity market products be classified accurately as either Tier 1 or Tier 2 based on the specified criteria (Section 5). Market participants and trading platforms must adhere to the new classifications when reporting transactions and ensuring compliance with transparency rules. Furthermore, the Repeal Instrument mandates the cessation of the application of the repealed Determination, ensuring that outdated classifications no longer apply. Failure to comply with the provisions of these instruments can lead to significant consequences. Although the Explanatory Statement does not explicitly outline specific penalties, non-compliance with the ASIC Market Integrity Rules generally can result in enforcement actions by ASIC. These may include financial penalties, corrective orders, or other regulatory sanctions. The precise penalties would depend on the nature and severity of the breach, but they underscore the importance of adhering to the rules to maintain market integrity and investor confidence. Both the Determination and the Repeal Instrument are crafted to ensure that the securities markets operate transparently and fairly. They aim to uphold the integrity of the market by clearly defining the categories of equity market products and ensuring that market participants are aware of their obligations under the rules. By doing so, these instruments support the broader regulatory objectives of protecting investors and maintaining market stability.

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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.