ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766

Administered by Department of the Treasury

Legislation au F2018L01271 Not in force Legislative Instrument

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EXPLANATORY STATEMENT for
ASIC Market Integrity Rules (Securities Markets) Determination 2018/765 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766

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 2018/765 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766 (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 2018/445 (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 2018/546.

 

3.                                                Operation of the instruments

ASIC Market Integrity Rules (Securities Markets) Determination 2018/765

Name of legislative instrument

Section 1 provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Determination 2018/765.

Commencement

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

(a)  8 October 2018; 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 2018/766

Name

Section 1 of the instrument provides that the instrument is the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766.

Commencement

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

(a)  8 October 2018; 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 2018/546 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 2018/546 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 2018/765 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766

ASIC Market Integrity Rules (Securities Markets) Determination 2018/765 (the Determination) and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766 (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 2018/546 (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 2018/765 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766 were enacted in 2018 under the Corporations Act 2001. These instruments were created to address the need for clear and consistent classification of equity market products for the purposes of ensuring market integrity. They were made by the Australian Securities and Investments Commission (ASIC) under the authority granted by subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017. The policy objective is to maintain the existing framework for categorising equity market products into tiers based on their average daily value transacted, ensuring that market participants have a transparent understanding of the classification criteria for block trades. These instruments ensure that the rules governing securities markets are up-to-date and aligned with current market conditions, thereby maintaining market integrity and investor confidence.

Scope and Application

The ASIC Market Integrity Rules (Securities Markets) Determination 2018/765 and the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766 are made by the Australian Securities and Investments Commission (ASIC) under subrule 6.2.1(4) of the ASIC Market Integrity Rules (Securities Markets) 2017. The Determination and Repeal Instrument apply to the determination of Tier 1 and Tier 2 Equity Market Products for the purposes of market integrity rules, which encompass pre-trade transparency of orders and post-trade transparency of transactions executed on or reported to a market. The instruments aim to maintain existing policy settings and supersede previous determinations. The Determination identifies specific Equity Market Products as Tier 1 or Tier 2 based on their stock codes, which are listed in Schedules 1 and 2 respectively, while the Repeal Instrument repeals the ASIC Market Integrity Rules (Securities Markets) Determination 2018/546. Both instruments commence on the later of 8 October 2018 or 20 business days after their registration on the Federal Register of Legislation. These legislative instruments do not engage any of the applicable rights or freedoms, and are compatible with human rights as they do not raise any human rights issues.

Key Provisions

The main operative sections of the ASIC Market Integrity Rules (Securities Markets) Determination 2018/765 (the Determination) and the ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2018/766 (the Repeal Instrument) pertain to the identification and classification of equity market products into different tiers, as well as the repeal of previous determinations. Specifically, Section 1 of each instrument identifies the instrument itself, Section 2 outlines the commencement date, and Section 3 provides the authority under which the instruments are made. Subsection 5 of the Determination specifies which equity market products are classified as Tier 1 and Tier 2, with details provided in Schedules 1 and 2. The Repeal Instrument, in Section 4, specifies the repealed instruments, which are listed in Schedule 1. These legislative instruments impose obligations on parties by clearly defining which equity market products fall into Tier 1 and Tier 2 categories, thereby ensuring transparency and consistency in how these products are treated under the securities market rules. Market participants must adhere to these classifications when engaging in transactions that may qualify as block trades, as the consideration thresholds for such transactions are contingent on the product's tier classification. The instruments also ensure that any previous determinations that conflict with the new classifications are repealed, maintaining a coherent regulatory framework. The Determination and the Repeal Instrument do not explicitly outline specific offences, penalties, or consequences for breach. However, non-compliance with the rules governing market integrity, including those pertaining to the classification of equity market products, may lead to regulatory actions under the Corporations Act 2001. Breaches of market integrity rules could result in civil penalties, including fines and other sanctions, as well as potential criminal penalties if the breach is deemed serious enough. The exact penalties would be determined in accordance with the provisions of the Corporations Act and any other applicable legislation.

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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.