5.1.1 Application and meaning of dealing on “Own Account”
Subject to Rule 5.1.2, a reference to a Market Participant having an order for its own account means that the APX Products to be bought or sold are (in the case of a sale) or will be on the completion of the transaction (in the case of a purchase) beneficially owned by the Market Participant or a Prescribed Person, where the APX Products beneficially owned by a Market Participant or Prescribed Person include APX Products which would appear as assets on the balance sheet or consolidated balance sheet of that Market Participant or Prescribed Person.
Note: There is no penalty for this Rule.
5.1.2 Exceptions
The following are not regarded as orders on a Market Participant’s own account:
(a) an order placed by a life insurance company registered under the Life Insurance Act 1995 (Cwlth) (or equivalent State legislation) on behalf of a statutory fund; or
(b) an order placed by a Controller or a Related Body Corporate of the Market Participant or of a Controller on behalf of clients of, or funds managed by them or their Related Bodies Corporate.
Note: There is no penalty for this Rule.
5.1.3 Fairness and priority in dealing
A Market Participant must deal fairly and in due turn with:
(a) clients’ orders; and
(b) a client order and an order on its Own Account.
Maximum penalty: $1,000,000
5.1.4 Relevant factors
(1) In considering whether Rule 5.1.3 has been complied with, the following factors are relevant:
(a) the Market Participant acts in accordance with its instructions;
(b) orders that do not involve the exercise of discretion by the Market Participant in relation to the time or price or quantity of the order are entered in a Trading Platform in the sequence in which they are received, and otherwise as expeditiously as practicable;
(c) orders of a client (which is not a Prescribed Person) that involve the exercise of discretion by the Market Participant in relation to the time or price or quantity of the order are given preference, within the meaning of subrule (2), over orders on the Market Participant’s Own Account, unless the client otherwise consents;
(d) if the sequence of entry of orders into a Trading Platform is not clearly established by the time the orders were received, and one of the orders is for the Market Participant’s Own Account, the Market Participant gives preference to the order of a client over any order for the Market Participant’s Own Account;
(e) if the Market Participant has acted in accordance with its procedures to ensure that a person initiating, transmitting or executing an order who is aware of instructions of a client (which is not a Prescribed Person) to deal in the relevant APX Products that has not been entered in a Trading Platform does not use that information to the disadvantage of that client;
(f) the Market Participant buys or sells for a Wholesale Client; and
(g) allocation of Market Transactions occurs in accordance with Rule 5.1.5.
(2) In paragraph (1)(c), a reference to a Market Participant giving preference to an order of a client over an order on the Market Participant’s Own Account, means that from the time of receipt of the order until it is fully executed, the Market Participant does not enter into, on its Own Account, a Market Transaction for the same APX Products on the same terms, having regard to subrule (3), unless:
(a) the APX Products are allocated to the client in accordance with paragraph 5.1.6(c); or
(b) the APX Products are allocated to the client pursuant to an allocation policy previously disclosed to the client, to which the client consents, under which the Market Participant may buy or sell (and be allocated) the same APX Products on its Own Account.
(3) For the purposes of subrule (2), a limit order which cannot be executed owing to price differences is not on the same terms.
(4) A Market Participant must keep a record of any consent given by a client for the purposes of paragraph (1)(c).
Note: There is no penalty for this Rule.
5.1.5 Fairness and priority in allocation
A Market Participant must allocate Market Transactions fairly.
Maximum penalty: $1,000,000
5.1.6 Relevant factors
In considering whether Rule 5.1.5 has been complied with, the following factors are relevant:
(a) allocation of Market Transactions is immediate and automatic, unless circumstances or instructions justify later or manual allocation;
(b) Market Transactions executed pursuant to instructions (whether an order of a client or an order on its Own Account) are allocated in the sequence in which the Market Participant received those instructions, entered those instructions or the Market Transactions were effected;
(c) the client’s instructions;
(d) allocation of a Market Transaction occurs in accordance with the disclosed allocation policy of the Market Participant; and
(e) except as provided in these Rules or the Market Operating Rules, a Market Participant does not allocate Market Transactions to fulfil all or part of an order for its Own Account when it has an unfulfilled order on the same terms for those Market Transactions from a client.
Note: There is no penalty for this Rule.
5.1.7 Unexecuted order in APX Products—Market Participant not to make Bids or Offers
If a Market Participant has or receives an Order to buy or sell an APX Product underlying a Derivatives Market Contract in the Underlying Market which may materially affect:
(a) the market price of the APX Product in the Underlying Market; or
(b) the level of an Underlying Index, the level of which is calculated by reference to the value of that APX Product and other products,
the Market Participant must not make Bids or Offers to enter into an Options Market Transaction over that APX Product as Principal until the order in the APX Product has been executed in the Underlying Market.
Maximum penalty: $1,000,000
5.1.8 Allocation policy and Automated Client Order Processing Crossings—disclosure to Client
(1) A Market Participant must when requested to do so by a person (the “Client”), disclose to the Client each of the following:
(a) the policy it adopts in the allocation of Market Transactions to fill orders placed with it; and
(b) in relation to Crossings under the Market Operating Rules:
(i) that the Client’s orders may match opposite orders in a Trading Platform by the same Market Participant, effectively resulting in a Crossing and entitling the Market Participant to commission from both sides of the transaction; and
(ii) if the Market Participant deals as Principal, that the Client’s orders may match opposite orders in a Trading Platform on behalf of the same Market Participant as Principal.
(2) The Market Participant must keep a record of disclosures made under subrule (1).
Maximum penalty: $20,000
Part 5.4 Transactions by connected persons (including persons connected with other Market Participants)
5.4.1 Application
In this Part 5.4, a reference to a connected person is a reference to the following persons:
(a) an Employee;
(b) a company controlled by an Employee; and
(c) a Controlled Trust (other than a trust controlled by an Immediate Family of an employee or a trust in relation to which an Immediate Family of an Employee is a trustee or holds more than 50% of the whole beneficial interest).
Note: There is no penalty for this Rule.
5.4.2 Internal consent required for trading by connected persons
(1) A Market Participant must not enter into a Market Transaction by or for the account of its connected persons, whether the Market Transaction is conducted through that Market Participant or through another Market Participant unless the Market Transaction has been approved in writing in accordance with subrule (4) by a Responsible Executive, director or partner of the Market Participant or a person with written delegation for that responsibility from a Responsible Executive, director or partner (other than the Employee concerned).
(2) A Market Participant must obtain a separate approval under subrule (1) for each relevant Market Transaction.
(3) A Market Participant must take reasonable steps to ensure that a person who approves a Market Transaction under subrule (1) takes into account the circumstances of the proposed transaction and anything which might materially affect the price of the relevant APX Product the subject of the Market Transaction.
(4) For the purposes of subrule (1), the approval in writing must include:
(a) all the information required by Part 4.1 for orders, whether or not the Market Participant will be executing the order to which the approval relates; and
(b) the date and time of approval.
(5) If a Market Transaction referred to in subrule (1) is conducted through another Market Participant, that Market Participant must, as soon as practicable after entering into the Market Transaction, give to the employing Market Participant a confirmation in respect of the Market Transaction.
Maximum penalty: $100,000
Part 5.5 Participant’s trading infrastructure
5.5.1 Knowledge of Market Participant
If a Trading Message embedded with a Market Participant’s unique identifier is submitted, the Trading Message is taken for all purposes under these Rules to have been submitted in a Trading Platform by or with the knowledge of the Market Participant.
Note: There is no penalty for this Rule.
5.5.2 Organisational and technical resources
A Market Participant must have and maintain the necessary organisational and technical resources to ensure that:
(a) Trading Messages submitted by the Market Participant do not interfere with:
(i) the efficiency and integrity of the APX Market; or
(ii) the proper functioning of a Trading Platform; and
(b) the Market Participant complies at all times with these Rules and the Market Operating Rules.
Maximum penalty: $1,000,000
5.5.3 Trading management arrangements
A Market Participant must have arrangements in place so that at all times the Market Participant can determine the origin of all orders and Trading Messages, including:
(a) the different stages of processing each order (regardless of whether a Trading Message is generated) and the time at which each stage of processing occurred;
(b) the order that corresponds to a Trading Message;
(c) the identity and capacity of the person placing the order that corresponds to the Trading Message;
(d) whether the Trading Message was the result of Automated Order Processing;
(e) the Open Interface Device and the computer or other device of the Market Participant connected to an Open Interface Device of the Market Participant through which the Trading Message was submitted;
(f) the DTR with responsibility for that Open Interface Device or computer or other device connected to the Open Interface Device (unless the Trading Message was the result of Automated Order Processing); and
(g) whether the Trading Message was submitted on the Market Participant’s Own Account or for a client.
Maximum penalty: $1,000,000
5.5.4 Trading management arrangements—Records
A Market Participant must maintain records of the matters referred to in Rule 5.5.3, for a period of 7 years from the date of the Trading Message to which the matters relate.
Maximum penalty: $100,000
Part 5.6 Automated Order Processing—Filters, conduct, and infrastructure
5.6.1 Responsible use of system for Automated Order Processing
A Market Participant which uses its system for Automated Order Processing must at all times:
(a) have appropriate automated filters, in relation to Automated Order Processing; and
(b) ensure that such use does not interfere with:
(i) the efficiency and integrity of the APX Market; or
(ii) the proper functioning of any Trading Platform.
Maximum penalty: $1,000,000
5.6.2 Authorised Persons for Automated Client Order Processing
A Market Participant which uses its system for Automated Client Order Processing must also have procedures in place to ensure that each Authorised Person has demonstrated to the Market Participant knowledge of the order entry system of the Market Participant and of the Dealing Rules, directions, decisions and requirements of the Market Operator relevant to the type of order submission facilities given to the Authorised Person by the Market Participant.
Maximum penalty: $1,000,000
5.6.3 Automated Order Processing system requirements
(1) A Market Participant which uses its system for Automated Order Processing must ensure that the system has in place:
(a) organisational and technical resources, including having appropriate automated filters, filter parameters and processes to record any changes to the filters or filter parameters, to enable Trading Messages to be submitted into the Trading Platform without interfering with the efficiency and integrity of the APX Market or the proper functioning of the Trading Platform;
(b) trading management arrangements, including having appropriate automated filters, filter parameters and processes to record any changes to the filters or filter parameters to enable the ready determination of the origin of all orders and trading messages;
(c) security arrangements to monitor for and prevent unauthorised persons having access to a gateway or an Open Interface Device or to a computer or other device connected to an Open Interface Device, and to ensure that the Automated Order Processing system does not interfere with the efficiency and integrity of the APX Market or the proper functioning of the Trading Platform;
controls, including automated controls, that enable immediate suspension, limitation or prohibition of the conduct of all Automated Order Processing or Automated Order Processing in respect of:
one or more Authorised Persons or clients;
Automated Client Order Processing; or
one or more APX Products; and
(e) controls that enable immediate:
suspension of, limitation of, or prohibition on, the entry into the APX Market of Trading Messages in a series of related Trading Messages where the Market Participant has identified that Trading Messages in the series have entered the APX Market and have interfered with or are likely to interfere with the efficiency or integrity of the APX Market; and
cancellation of Trading Messages in a series that have already entered the APX Market where the entry of further messages in the series has been suspended, limited or prohibited under subparagraph (i).
(2) A Market Participant that uses its system for Automated Order Processing must have direct control over all automated filters and the filter parameters for those filters.
Maximum penalty: $1,000,000
5.6.4 Review of documentation and systems prior to use of Automated Order Processing system
(1) Before using their system for Automated Order Processing, a Market Participant must, for the purposes of providing the certification referred to in Rule 5.6.6, perform a review of the Market Participant’s policies, procedures, system design documentation, including the Market Participant’s procedures for implementation of subsequent changes to the Automated Order Processing software, filters and filter parameters, and other relevant documentation concerning the Market Participant’s compliance with Part 5.6 of these Rules.
(2) A Market Participant that was not required to comply with Rule 5.6.4 in relation to a system for Automated Order Processing because of the operation of Rule 5.6.6A is not required to conduct the review referred to in subrule (1) in relation to that system for Automated Order Processing.
Note: Rule 5.6.6A was omitted by the ASIC Market Integrity Rules (APX Market) Amendment 2013 (No.1) from 26 May 2014. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.4 or Chi-X Australia Market Integrity Rule 5.6.4, did not need to comply with this Rule 5.6.4.
Maximum penalty: $1,000,000
5.6.5 Representations as to organisational and technical resources, trading management arrangements and security arrangements, prior to use of Automated Order Processing system
(1) Before using their system for Automated Order Processing, the Market Participant must, for the purposes of providing the certification referred to in Rule 5.6.6, obtain written representations that the Market Participant has in place organisational and technical resources, arrangements and controls in relation to the system for Automated Order Processing that meet the requirements of Rule 5.6.3.
(2) The representations referred to in subrule (1) must:
(a) be provided by persons who are suitably qualified and experienced in relation to the organisational and technical resources, arrangements and controls for which they are making the representation;
(b) include the name of the person making the representation;
(c) be signed and dated by the person making the representation; and
(d) set out the methodology used by the person to enable them to make the representation.
(3) A Market Participant that was not required to comply with Rule 5.6.5 in relation to a system for Automated Order Processing because of the operation of Rule 5.6.6A is not required to obtain the representations referred to in subrule (1) in relation to that system for Automated Order Processing.
Note: Rule 5.6.6A was omitted by the ASIC Market Integrity Rules (APX Market) Amendment 2013 (No. 1) from 26 May 2014. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.5 or Chi-X Australia Market Integrity Rule 5.6.5, did not need to comply with this Rule 5.6.5.
Maximum penalty: $1,000,000
5.6.6 Certification of Automated Order Processing system
(1) Before using their system for Automated Order Processing, a Market Participant must:
(a) give a written certification (“AOP Initial Certification”) to ASIC that includes the matters set out in subrule (2); and
(b) receive a written confirmation from ASIC that the AOP Initial Certification complies with subrule (2).
(2) The AOP Initial Certification given by the Market Participant to ASIC must include:
(a) the name of the Market Participant;
(b) the version number and name of the Market Participant’s Automated Order Processing system;
(c) copies of the representations required by Rule 5.6.5 in relation to the system referred to in paragraph (b);
(d) a confirmation by the Market Participant that:
(i) the Market Participant has performed the review required by Rule 5.6.4 and that nothing came to the attention of the Market Participant during the course of that review which would indicate that the Market Participant is unable to comply with Part 5.6 of these Rules;
(ii) based on the review required by Rule 5.6.4 and the representations required by Rule 5.6.5, the Market Participant’s Automated Order Processing system:
(A) does, or does not, permit Automated Client Order Processing, as the case may be; and
(B) meets the requirements of Rule 5.6.3; and
(iii) the representations required by Rule 5.6.5 have been made by persons whom the Market Participant considers to be suitably qualified and experienced in relation to the organisational and technical resources, arrangements and controls for which they are making those representations; and
(e) the name of the directors of the Market Participant referred to in subrule (3).
(3) At least two directors of the Market Participant must sign and date the written certification referred to in subrule (2).
(4) A Market Participant that was not required to comply with Rule 5.6.6 in relation to a system for Automated Order Processing because of the operation of Rule 5.6.6A is not required to give the certification referred to in subrule (1) in relation to that system for Automated Order Processing.
Note: Rule 5.6.6A was omitted by the ASIC Market Integrity Rules (APX Market) Amendment 2013 (No. 1) from 26 May 2014. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.6 or Chi-X Australia Market Integrity Rule 5.6.6 did not need to comply with this Rule 5.6.6.
Maximum penalty: $1,000,000
5.6.8 AOP Material Change Review
(1) Before making a material change to any of the organisational or technical resources, arrangements or controls employed to comply with Rule 5.6.3, the Market Participant must ensure that an appropriately qualified person performs a review (“AOP Material Change Review”) of the material changes to the Automated Order Processing system, the Market Participant’s policies, procedures, system design documentation, including the Market Participant’s procedures for implementation of subsequent changes to the Automated Order Processing software, filters and filter parameters and other relevant documentation concerning the Market Participant’s compliance with Part 5.6 of these Rules.
(2) Before implementing a material change the subject of an AOP Material Change Review the Market Participant must, for the purposes of providing the AOP Annual Notification, obtain written representations from the person who performed the AOP Material Change Review that nothing came to the attention of the person during the course of the AOP Material Change Review that would indicate that the Market Participant is unable to comply with Part 5.6 of these Rules.
(3) The representations referred to in subrule (2) must:
include the name of the person making the representation; and
be signed and dated by the person making the representation.
Maximum penalty: $100,000
5.6.8A AOP Annual Review
(1) Where a Market Participant has not performed an AOP Material Change Review in relation to an Automated Order Processing system in the 12 months before the AOP Annual Review Date, the Market Participant must, for the purposes of providing the AOP Annual Notification in relation to that Automated Order Processing system, ensure that an appropriately qualified person performs a review (“AOP Annual Review”) of the Automated Order Processing system, the Market Participant’s policies, procedures, system design documentation, including the Market Participant’s procedures for implementation of changes to the Automated Order Processing software, filters and filter parameters and other relevant documentation concerning the Market Participant’s compliance with Part 5.6 of these Rules.
(2) The Market Participant must, for the purposes of providing the AOP Annual Notification in relation to an Automated Order Processing system, obtain written representations from the person who performed the AOP Annual Review in relation to the Automated Order Processing system, that nothing came to the attention of the person during the course of the AOP Annual Review that would indicate that the Market Participant is unable to comply with Part 5.6 of these Rules.
(3) The representations referred to in subrule (2) must:
(a) include the name of the person making the representation; and
(b) be signed and dated by the person making the representation.
Maximum penalty: $100,000
5.6.8B AOP Annual Notification
(1) A Market Participant must, within 10 Business Days of each AOP Annual Review Date, given a written notice (“AOP Annual Notification”) to ASIC that includes:
(a) the name of the Market Participant; and
(b) the version number and name of the Market Participant’s Automated Order Processing system; and
(c) a confirmation by the Market Participant that nothing came to the attention of the Market Participant during the 12 months before the AOP Annual Review date that would indicate that the Market Participant is unable to comply with Part 5.6 of these Rules; and
(d) the name of the directors of the Market Participant referred to in subrule (2).
(2) At least two directors of the Market Participant must sign and date the AOP Annual Notification.
Maximum penalty: $100,000
5.6.11 Further certification
(1) A Market Participant must, if directed by ASIC in writing to do so, provide a further certification in a form acceptable to ASIC from an appropriately qualified person acceptable to ASIC as to compliance by the Market Participant with the Automated Order Processing Requirements.
(2) A Market Participant must comply with a direction under subrule (1) within the time specified in the direction.
Maximum penalty: $100,000
5.6.12 Limitations on Automated Order Processing
(1) This Rule applies where ASIC reasonably considers that:
(a) a Market Participant is not complying with the Automated Order Processing Requirements; or
(b) it is otherwise appropriate to direct a Market Participant to take the actions referred to in subrule (2).
(2) A Market Participant must, if directed to do so by ASIC:
(a) cease conducting Automated Order Processing until ASIC is satisfied that the Market Participant complies with the Automated Order Processing Requirements; or
(b) immediately suspend, limit or prohibit the conduct of Automated Order Processing in respect of:
(i) one or more Authorised Persons or clients;
(ii) Automated Client Order Processing;
(iii) Automated Order Processing; or
(iv) one or more APX Products,
as required by the direction.
Maximum penalty: $1,000,000
Part 5.7 Manipulative trading
5.7.1 False or misleading appearance
A Market Participant must not make a Bid or Offer for, or deal in, any APX Products:
(a) as Principal:
(i) with the intention; or
(ii) if that Bid, Offer or dealing has the effect, or is likely to have the effect,
of creating a false or misleading appearance of active trading in any APX Product or with respect to the market for, or the price of, any APX Product; or
(b) on account of any other person where:
(i) the Market Participant intends to create;
(ii) the Market Participant is aware that the person intends to create; or
(iii) taking into account the circumstances of the Order, a Market Participant ought reasonably suspect that the person has placed the Order with the intention of creating,
a false or misleading appearance of active trading in any APX Product or with respect to the market for, or the price of, any APX Product.
Maximum penalty: $1,000,000
5.7.2 Circumstances of Order
In considering the circumstances of the Order, the Market Participant must have regard to the following matters:
(a) whether the Order or execution of the Order would be inconsistent with the history of or recent trading in that APX Product;
(b) whether the Order or execution of the Order would materially alter the market for, or the price of, the APX Product;
(c) the time the Order is entered or any instructions concerning the time of entry of the Order;
(d) whether the person on whose behalf the Order is placed, or another person who the Market Participant knows to be a Related Party of that person, may have an interest in creating a false or misleading appearance of active trading in any APX Product or with respect to the market for, or the price of, any APX Product;
(e) whether the Order is accompanied by settlement, delivery or security arrangements which are unusual;
(f) where the Order appears to be part of a series of Orders, whether when put together with other Orders which appear to make up the series, the Order or the series is unusual having regard to the matters referred to in this Rule 5.7.2;
(g) whether there appears to be a legitimate commercial reason for that person placing the Order, unrelated to an intention to create a false or misleading appearance of active trading in or with respect to the market for, or price of, any APX Product; and
(h) whether the transaction, bid or offer the execution of which is proposed will involve no change of beneficial ownership.
Maximum penalty: $1,000,000
5.7.3 Obligations apply to Automated Order Processing
A Market Participant must also comply with this Part 5.7 in respect of Orders the subject of Automated Order Processing.
Note: There is no penalty for this Rule.
Part 5.9 Fair and orderly markets
5.9.1 Market must remain fair and orderly
A Market Participant must not do anything which results in a market for an APX Product not being both fair and orderly, or fail to do anything where that failure has that effect.
Maximum penalty: $1,000,000
5.9.2 Representative must be available
A Market Participant must ensure that a Representative of the Market Participant is available to receive communications from other Market Participants or from the Market Operator from during Trading Hours, unless otherwise determined in writing by ASIC and notified to the Market Participant.
Maximum penalty: $100,000
5.9.3 Must not take advantage of breakdown or malfunction
A Market Participant must not take advantage of a situation arising as a result of a breakdown or malfunction in the Market Operator’s procedures or systems or an error in any Trading Message submitted by the Market Operator.
Maximum penalty: $1,000,000
Part 5.10 Dealing in APX Products
5.10.1 Market Participants may not deal in APX Products for which Official Quotation will be sought
Except as permitted in Rule 5.10.2, a Market Participant is prohibited, either in its own office or elsewhere, from making quotations or dealing in a new issue or placement of APX Products (except Loan Securities):
(a) made for the purpose of qualifying a company for admission to the Official List; or
(b) for which Official Quotation will be sought,
until those APX Products have been granted Official Quotation.
Maximum penalty: $100,000
5.10.2 When Market Participants may deal in APX Products for which Official Quotation will be sought
Notwithstanding Rule 5.10.1 but subject to any other provisions of these Rules and the Market Operating Rules, a Market Participant may deal in APX Products to which Rule 5.10.1 applies in the following circumstances:
(a) a Market Participant may underwrite or sub-underwrite a new issue or placement of APX Products;
(b) a Market Participant may dispose of APX Products if those APX Products comprise an underwriting or sub-underwriting shortfall;
(c) where the APX Products have been issued on a pro-rata basis to holders;
(d) where a listed entity acquires assets and as part or full consideration, issues new APX Products (except Loan Securities) to the vendor and the Market Participant:
(i) has made a prior firm arrangement with the vendor to place these APX Products as soon as they are issued; and
(ii) ensures that the details of the issue to the vendor are advised to the APX Market by the listed entity immediately the APX Products are issued;
(e) where a Market Participant:
(i) makes a placement of new APX Products (except Loan Securities) for which Official Quotation will be sought, and the Market Participant ensures that all investors accepting the APX Products are informed in writing that Market Participants cannot deal in the APX Products either as Principal or agent until Official Quotation is granted in respect of those APX Products;
(ii) accepts selling orders in APX Products (except Loan Securities) for which Official Quotation will be sought, and the Market Participant takes all reasonable steps to ensure that the APX Products are not sold before the APX Products have been granted Official Quotation; or
(iii) accepts selling orders in APX Products (except Loan Securities) where the APX Products are of the same class as APX Products which have already been granted Official Quotation and:
(A) the APX Products have already been issued by the Issuer; and
(B) the fact that the APX Products have been issued has been notified to, and released to the APX Market by, the APX Announcements Office; and
(f) a Market Participant may dispose of or acquire ETF Securities which are the subject of a subscription application if:
(i) the ETF Securities are in a class of ETF Securities which are quoted on the APX Market;
(ii) the subscription application is irrevocable and subject only to transfer of the subscription consideration from the subscriber to the Issuer;
(iii) the disposal or acquisition is made on the APX Market in accordance with these Rules and the Market Operating Rules;
(iv) there is an arrangement between the Issuer and APX under which the ETF Securities will be granted Official Quotation before settlement of the disposal or acquisition; and
(v) the number of ETF Securities on issue is regularly reported to APX on the basis required by APX.
Note: There is no penalty for this Rule.
5.10.3 Dealings in Securities for which Official Quotation will not be sought
A Market Participant may deal in new Securities issued by a listed entity for which Official Quotation will not be sought 24 hours after that entity has advised the APX Market of the details of the issue.
Note: There is no penalty for this Rule.
5.10.4 Dealings in APX Products suspended from Official Quotation
A Market Participant must not deal in APX Products which have been suspended from quotation or trading.
Maximum penalty: $100,000
5.10.5 Disclosure of shortfall—Must disclose to Client
A Market Participant, an Employee or a director of a Market Participant or a company which is a partner of a Market Participant who or which will be required to acquire APX Products as underwriter or sub-underwriter must not offer such APX Products to clients unless:
(a) they first inform the clients concerned of the closing date of the issue or offering of the APX Products and the reasons for the acquisition; or
(b) the offer to the client is made more than 90 days from the closing date.
Maximum penalty: $100,000
5.10.6 Expenses—Reimbursement for out-of-pocket expenses
Where a Market Participant seeks out-of-pocket expenses involved in the purchase or sale of APX Products, the Market Participant must not cover that charge by an increase or reduction in the price of the APX Products.
Maximum penalty: $100,000
5.10.7 Nominee holdings—Restrictions on when an Equity Security can be recorded in the name of a nominee company
(1) A Market Participant must not cause the ownership of an Equity Security of which it is not the beneficial owner to be registered in its own name or in the name of its partners, directors or Employees.
(2) A Market Participant may only cause the ownership of an Equity Security referred to in subrule (1) to be registered in the name of a nominee company which:
(a) unless otherwise agreed by ASIC, is incorporated in Australia with a name which contains the word “nominee”;
(b) has a constitution which precludes the nominee company from owning any Equity Security or other property except cash beneficially; and
(c) is a directly legally and beneficially wholly owned subsidiary of the Market Participant which is operated by the Market Participant unless the Market Participant is a Clearing Participant who appoints a Settlement Participant as its agent in accordance with the Clearing Rules.
Maximum penalty: $100,000
Part 5.11 Suspicious activity reporting
5.11.1 Notification requirement
(1) Subject to subrule (2), if a Market Participant has reasonable grounds to suspect that:
(a) a person (“the Insider”) has placed an order into or entered into a transaction on the Market in relation to a financial product while in possession of inside information (within the meaning of section 1042A of the Corporations Act), whether or not the Market Participant is aware of:
(i) the identity of the Insider; or
(ii) all of the details of the order or transaction; or
(b) a transaction or an order transmitted to a Trading Platform has or is likely to have the effect of:
(i) creating an artificial price for trading in financial products on the Market;
(ii) maintaining at a level that is artificial (whether or not it was previously artificial) a price for trading in financial products on the Market;
(iii) creating, or causing the creation of, a false or misleading appearance of active trading in financial products on the Market; or
(iv) creating, or causing the creation of, a false or misleading appearance with respect to the market for, or the price for trading in, financial products on the Market,
whether or not the Market Participant is aware of:
(v) the intention of any party to the transaction or order; or
(vi) all of the details of the transaction or order,
the Market Participant must, as soon as practicable, notify ASIC in writing of the details of the transaction or order (to the extent known by the Market Participant) and the reasons it suspects the matter set out in paragraphs (a) and/or (b).
(2) A Market Participant is not required to notify ASIC under subrule (1) to the extent the Market Participant has reported the information that would otherwise be required to be contained in the notification to the Australian Transaction Reports and Analysis Centre under section 41 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cwlth) or under section 16 of the Financial Transaction Reports Act 1988 (Cwlth).
Maximum penalty: $20,000
5.11.2 Confidentiality
A Market Participant who notifies ASIC under subrule 5.11.1(1) must not disclose that the notification was made, or the information contained in the notification, other than:
(a) for the purposes of seeking legal advice; or
(b) as required by law.