ASIC takes steps to ensure stability of Australian equity market

ASIC office

The Australian Securities and Investment Commission (ASIC), has taken measures to ensure the resiliency of the Australian equity market as part of the Government’s response to Covid-19 outbreak.

During the last two weeks, the Australian equity market has seen record trading volumes. ASIC and other Council of Financial Regulators agencies, have kept a close eye on the financial markets to ensure they maintain order. Australian markets have remained strong over this volatile period, the actions taken are to prevent any disturbances and to maintain the standards.

The Australian equity markets have experienced exponential increases in the number of executed trades, with particularly high numbers last Friday, 13 March. There have not been any disturbances in the market operations then but there is a critical backlog of work for the exchanges and trading participant over the weekend. If these numbers continue to increase, it would put a big strain on the processing and risk management capabilities of market infrastructure and market participants.

ASIC as also issued guidelines under the ASIC Market Integrity Rules to a number of large equity market participants with requirements of limiting the number of trades executed daily by up to 25% of the levels from Friday. High volume participants and their clients will have to actively manage their volumes. The limits are not expected to impact the ability of retail consumers to execute trades.

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