ASIC releases market supervision report for period July to December 2013

ASIC’s half-yearly report on the supervision of market participants reveals 19,255 trading alerts, and continues its drive toward automated surveillance

Australia is a region which a great many FX company executives have been following with a keen eye recently, mainly due to its close proximity to the Asia Pacific region from which all FX firms globally are intent on accruing clients, but also assisted by the nation’s keen regulatory authority and financial stability.

The Australian Securities and Investments Commission (ASIC) yesterday published its seventh market supervision report, detailing statistics relating to the regulatory activity and enforcements that have been carried out between July and December 2013.

In this particular document, entitled ASIC Supervision of Markets And Participants, it is stated that a significant volume of enforcement and regulatory outcomes was achieved during the relevant period, and that ASIC intends to build what it considers to be strong results already achieved since the adoption of the real-time supervision of Australia’s domestic licensed markets.

ASIC was one of the first mainstream financial markets regulatory authorities to instigate computerized surveillance systems in order to conduct real time observations on the behavior of companies which it oversees, having initially used its proprietary SMARTS system, then adding First Derivatives’ Delta Stream solution. According to the regulator, further investment has been made since, and its new market surveillance system commenced operation. The new Market Analysis and Intelligence (MAI) system enables ASIC to better detect, investigate and prosecute trading breaches. MAI was built and designed around algorithmic trading technology already used in financial markets, and gives ASIC the ability to analyse trade data for patterns and relationships.

MAI also allows ASIC to analyse very large data sets and monitor market activity, consistent with the increased use of technology in day-to-day trading. The new system has been built to handle the continued increase in trade and message data, which has the potential to reach one billion messages per day. This could well render the traditional compliance inspections obsolete and indeed ensure no malpractice slips through the net.


Australia’s authorities have continued their campaign toward eliminating as much insider trading as possible, and unlike their European counterparts, have welcomed the use of algorithms and high frequency trading within its trading desks and venues, as long as companies engaging in this practice adhere to compliance procedure.

ASIC Commissioner Cathie Armour said the results were testament to the significant energy dedicated by ASIC, and in particular its Market and Participant Supervision team, to the supervision and surveillance of Australia’s financial markets.


“This report shows that our tailored financial markets surveillance continues to achieve strong results. These results are crucial to the further strengthening of investor confidence in the integrity of our markets” Ms Armour said.

Greg Yanco, Senior Executive Leader of the Market and Participant Supervision team, stated that ongoing dialogue with stakeholders, and a facilitative approach where appropriate, has allowed for swift corrective action when things do go wrong.

“We continue to encourage market participants and securities dealers to work with us in addressing any concerns or trading issues” Mr. Yanco said.

“Our new market surveillance system also allows ASIC to better detect, investigate and prosecute trading breaches and our analysts can now use the system to develop and modify alerts that take into account changing market circumstances, as well as as calibrating alerts more dynamically” concluded Mr. Yanco.

In the relevant period, ASIC produced 19,255 trading alerts, with 102 matters requiring further consideration, resulting in 31 referrals to enforcement. A full retrospective summary of the most significant cases can be viewed within the full report by clicking here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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