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:
in relation to Cash Market Transactions, that the Cash Market 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 Cash Market Products beneficially owned by a Market Participant or Prescribed Person include Cash Market Products which would appear as assets on the balance sheet or consolidated balance sheet of that Market Participant or Prescribed Person; and
(b) in relation to Derivatives Market Transactions, having an order to enter into a Derivatives Market Transaction on its own behalf or for the benefit of a 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:
an order placed by a life insurance company registered under the Life Insurance Act 1995 (or equivalent State legislation) on behalf of a statutory fund;
(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:
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:
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 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;
(g) allocation of Market Transactions occurs in accordance with Rule 5.1.5; and
(h) a Market Participant’s orders on its Own Account are not knowingly interposed between Orders of its clients that would otherwise have Crossed.
(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 Products on the same terms, having regard to subrule (3), unless:
the Products are allocated to the client in accordance with paragraph 5.1.6(c); or
(b) the 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 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:
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 Underlying Financial Products—Trading Participant not to make Bids or Offers
If a Trading Participant has or receives an Order to buy or sell an Underlying Financial Product in the Underlying Market which may materially affect:
the market price of the Underlying Financial 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 Underlying Financial Product and other Products,
the Trading Participant must not make Bids or Offers to enter into an Options Market Transaction over that Underlying Financial Product as Principal until the order in the Underlying Financial 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:
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:
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 5.3 Large Order facilitation
5.3.1 Futures Market Contracts—Action a Market Participant may take when insufficient opposite orders
(1) This Part 5.3 applies only to orders to deal in Futures Market Contracts.
(2) Where a Market Participant receives a Large Order from a client and there are insufficient opposite orders in the Central Orderbook at that time to satisfy that order:
the Market Participant may, with the written authority of the client, withhold transmission of the Large Order and solicit counterparties, disclose the relevant instructions and aggregate opposite orders from other clients;
(b) when the Market Participant has solicited other counterparties under paragraph (a), the Market Participant must enter the Large Order into the Central Orderbook (or, where the counterparty orders are orders of other clients of the Market Participant, effect a Crossing in accordance with the Market Operating Rules); and
(c) during the period in which the Market Participant solicits orders under paragraph (a) and until the Large Order has been entered or executed as a Crossing under paragraph (b), the Market Participant must not enter an opposite order.
Maximum penalty: $100,000
5.3.2 Application
(1) For the purposes of this Part 5.3:
“Large Order” means an Order for a number of Futures Market Contracts that is greater than or equal to the number set out in subrule (2); and
(b) where the Market Participant is a body corporate, a Related Body Corporate and a division of the Market Participant other than its futures division will each be regarded as “clients”.
(2)For the purposes of subrule (1):
for Futures Market Contracts which are Futures Market Contracts over an Underlying Index (other than Futures Market Contracts referred to in paragraph (b)), 750 contracts;
(b) for Futures Market Contracts which are Futures Market Contracts over the Underlying Index which is known as the S&P/ASX 200 Property Trust Index Futures, 50 contracts;
(c) for Futures Market Contracts which are Futures Market Contracts over an Underlying Commodity which is wool, 100 contracts;
(d) for Futures Market Contracts which are Futures Market Contracts over an Underlying Commodity which is grain, 200 contracts.
Note: There is no penalty for this Rule.
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:
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 Cash Market Product (or, in the case of a Derivatives Market Transaction, the price or value of the relevant Contract Series) the subject of the Market Transaction.
(4) For the purposes of subrule (1), the approval in writing must include:
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 Trading Participant
If a Trading Message embedded with a Trading 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 Trading Participant.
Note: There is no penalty for this Rule.
5.5.2 Organisational and technical resources
A Trading Participant must have and maintain the necessary organisational and technical resources to ensure that:
Trading Messages submitted by the Trading Participant do not interfere with:
the efficiency and integrity of the Market; or
(ii) the proper functioning of a Trading Platform; and
(b) the Trading 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 Trading Participant must have arrangements in place so that at all times the Trading Participant can determine the origin of all orders and Trading Messages, including:
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 Trading Participant connected to an Open Interface Device of the Trading 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 Trading Participant’s Own Account or for a client.
Maximum penalty: $1,000,000
5.5.4 Trading management arrangements—Records
A Trading 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
(1)A Trading Participant which uses its system for Automated Order Processing must at all times:
have appropriate automated filters, in relation to Automated Order Processing; and
(b) ensure that such use does not interfere with:
the efficiency and integrity of the Market;
(ii) the proper functioning of any Trading Platform; or
(iii) the efficiency and integrity of any Crossing System operated by the Trading Participant.
(2)A Trading Participant does not have to ensure its system used for Automated Order Processing does not interfere with the efficiency and integrity of any Crossing System operated by the Trading Participant under subparagraph (1)(b)(iii) until six months have passed from the commencement of subparagraph (1)(b)(iii).
Maximum penalty: $1,000,000
5.6.2 Authorised Persons for Automated Client Order Processing
A Trading 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 Trading Participant knowledge of the order entry system of the Trading 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 Trading Participant.
Maximum penalty: $1,000,000
5.6.3 Automated Order Processing system requirements
(1) A Trading Participant which uses its system for Automated Order Processing must ensure that the system has in place:
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 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 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:
(i) one or more Authorised Persons or clients;
(ii) Automated Client Order Processing; or
(iii) one or more Products; and
controls that enable immediate:
suspension of, limitation of, or prohibition on, the entry into the Market of Trading Messages in a series of related Trading Messages where the Trading Participant has identified that Trading Messages in the series have entered the Market and have interfered with or are likely to interfere with the efficiency or integrity of the Market;
(ii) cancellation of Trading Messages in a series that have already entered the Market where the entry of further messages in the series has been suspended, limited or prohibited under subparagraph (i);
(iii) suspension of, limitation of, or prohibition on, the entry into any Crossing System operated by the Trading Participant of Orders in a series of related Orders where the Trading Participant has identified that Orders in the series have entered the Crossing System operated by the Trading Participant and have interfered with or are likely to interfere with the efficiency or integrity of the Crossing System; and
(iv) cancellation of Orders in a series that have already entered a Crossing System operated by the Trading Participant where the entry of further Orders in the series has been suspended, limited or prohibited under subparagraph (iii).
(2) A Trading 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
Before using their system for Automated Order Processing, a Trading Participant must, for the purposes of providing the certification referred to in Rule 5.6.6, perform a review of the Trading Participant’s policies, procedures, system design documentation, including the Trading Participant’s procedures for implementation of subsequent changes to the Automated Order Processing software, filters and filter parameters, and other relevant documentation concerning the Trading Participant’s compliance with Part 5.6 of these Rules.
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 Trading Participant must, for the purposes of providing the certification referred to in Rule 5.6.6, obtain written representations that the Trading 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:
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.
Maximum penalty: $1,000,000
5.6.6 Certification of Automated Order Processing system
(1) Before using their system for Automated Order Processing, a Trading Participant must:
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 Trading Participant to ASIC must include:
the name of the Trading Participant;
(b) the version number and name of the Trading 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 Trading Participant that:
the Trading Participant has performed the review required by Rule 5.6.4 and that nothing came to the attention of the Trading Participant during the course of that review which would indicate that the Trading 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 Trading Participant’s Automated Order Processing system:
does, or does not, permit Automated Client Order Processing, as the case may be; and
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 Trading 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;
(e) the name of the directors of the Trading Participant referred to in subrule (3).
(3) At least two directors of the Trading Participant must sign and date the written certification referred to in subrule (2).
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 Trading 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 Trading Participant’s policies, procedures, system design documentation, including the Trading Participant’s procedures for implementation of subsequent changes to the Automated Order Processing software, filters and filter parameters and other relevant documentation concerning the Trading 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 Trading 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 Trading 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
(b) be signed and dated by the person making the representation.
Maximum penalty: $100,000
5.6.8A AOP Annual Review
(1) Where a Trading 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 Trading 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 Trading Participant’s policies, procedures, system design documentation, including the Trading Participant’s procedures for implementation of changes to the Automated Order Processing software, filters and filter parameters and other relevant documentation concerning the Trading Participant’s compliance with Part 5.6 of these Rules.
(2) The Trading 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 Trading 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
(b) be signed and dated by the person making the representation.
Maximum penalty: $100,000
5.6.8B AOP Annual Notification
(1) A Trading Participant must, within 10 Business Days of each AOP Annual Review Date, given a written notice (“AOP Annual Notification”) to ASIC that includes:
the name of the Trading Participant; and
(b) the version number and name of the Trading Participant’s Automated Order Processing system; and
(c) a confirmation by the Trading Participant that nothing came to the attention of the Trading Participant during the 12 months before the AOP Annual Review date that would indicate that the Trading Participant is unable to comply with Part 5.6 of these Rules; and
(d) the name of the directors of the Trading Participant referred to in subrule (2).
(2) At least two directors of the Trading Participant must sign and date the AOP Annual Notification.
Maximum penalty: $100,000
5.6.11 Further certification
(1) A Trading 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 Trading Participant with the Automated Order Processing Requirements.
(2) A Trading 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 Trading Participant is not complying with the Automated Order Processing Requirements; or
(b) it is otherwise appropriate to direct a Trading Participant to take the actions referred to in subrule (2).
(2) A Trading Participant must, if directed to do so by ASIC:
cease conducting Automated Order Processing until ASIC is satisfied that the Trading Participant complies with the Automated Order Processing Requirements; or
(b) immediately suspend, limit or prohibit the conduct of Automated Order Processing in respect of:
one or more Authorised Persons or clients;
(ii) Automated Client Order Processing;
(iii) Automated Order Processing; or
(iv) one or more 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 Products:
as Principal:
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 Product or with respect to the market for, or the price of, any Product; or
(b) on account of any other person where:
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 Product or with respect to the market for, or the price of, any 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:
whether the Order or execution of the Order would be inconsistent with the history of or recent trading in that Product;
(b) whether the Order or execution of the Order would materially alter the market for, or the price of, the 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 Product or with respect to the market for, or the price of, any 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 Product;
(h) whether the transaction, bid or offer the execution of which is proposed will involve no change of beneficial ownership;
(i) the frequency with which Orders are placed by a person;
(j) the volume of Products the subject of each Order placed by a person; and
(k) the extent to which a person amends or cancels an instruction to purchase or sell a Product relative to the number of transactions executed for that person.
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 5.8 Prohibition on wash trades, pre-arranged trades and dual trading—Futures
5.8.1 Application of Rule 5.8
This Part 5.8 applies to Futures Market Transactions only.
Note: There is no penalty for this Rule.
5.8.2 Wash trades
A Market Participant must not effect any Futures Market Transaction where the account on behalf of which the Market Participant enters into the Futures Market Transaction is the same on both sides of that transaction.
Maximum penalty: $100,000
5.8.3 Pre-arranged trades
(1) A Market Participant must not give or accept a request or instructions that a Futures Market Transaction only be entered into between particular Market Participants.
(2) A Market Participant must not arrange a Futures Market Transaction with another Market Participant to the exclusion of other Market Participants.
Maximum penalty: $100,000
5.8.4 Dual trading
A Market Participant must ensure that arrangements are in place to ensure that a Representative responsible for placing orders for the Market Participant’s own account does not have access to orders submitted by clients of the Market Participant before the client orders are transmitted for execution.
Maximum penalty: $100,000
5.8.5 Corners—Postponement of deliveries
When, in the opinion of ASIC, a person or two or more persons acting in concert have acquired such control of a Quoted Product that the Quoted Product cannot be obtained for delivery on existing contracts except at prices or on terms arbitrarily dictated by such persons which are unfair, harsh, or unconscionable, ASIC may:
for the purpose of enabling equitable settlement to be effected on these contracts, postpone (or from time to time further postpone) the times for deliveries on contracts for any such Quoted Product; and
(b) at any time declare that if such Quoted Product is not delivered on any contract requiring delivery on or before the time to which delivery has been postponed such contract will be settled by payment to the party entitled to receive such Quoted Product or by the credit to such party of a fair settlement price determined under Rule 5.8.6.
Note: There is no penalty for this Rule.
5.8.6 Establishment of a fair settlement price
If the parties to a contract referred to in Rule 5.8.5 do not agree on a fair settlement price and set a date for payment they must submit the differences or matter in dispute to arbitration by an independent arbiter capable of making an award on the difference or matters in dispute in accordance with the provisions of the Commercial Arbitration Act 1984 (NSW).
Maximum penalty: $20,000
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 a 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 Trading Participant must ensure that a Representative of the Trading Participant is available to receive communications from other Trading Participants or from the Market Operator during the following times on a Trading Day:
in relation to Cash Market Products—from the beginning of Open Session State until the end of CSPA Session State;
(b) in relation to Options Market Contracts and Futures Market Contracts—during Open Session State,
unless otherwise determined in writing by ASIC and notified to the Trading 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 Cash Market Products
5.10.1 Trading Participants may not deal in Cash Market Products for which Official Quotation will be sought
Except as permitted in Rule 5.10.2, a Trading Participant is prohibited, either in its own office or elsewhere, from making quotations or dealing in a new issue or placement of Cash Market Products (except Loan Securities):
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 Cash Market Products have been granted Official Quotation.
Maximum penalty: $100,000
5.10.2 When Trading Participants may deal in Cash Market 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 Trading Participant may deal in Cash Market Products to which Rule 5.10.1 applies in the following circumstances:
a Trading Participant may underwrite or sub-underwrite a new issue or placement of Cash Market Products;
(b) a Trading Participant may dispose of Cash Market Products if those Cash Market Products comprise an underwriting or sub-underwriting shortfall;
(c) where the Cash Market 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 Cash Market Products (except Loan Securities) to the vendor and the Trading Participant:
has made a prior firm arrangement with the vendor to place these Cash Market Products as soon as they are issued; and
(ii) ensures that the details of the issue to the vendor are advised to the Market by the listed entity immediately the Cash Market Products are issued;
(e) where a Trading Participant:
makes a placement of new Cash Market Products (except Loan Securities) for which Official Quotation will be sought, and the Trading Participant ensures that all investors accepting the Cash Market Products are informed in writing that Trading Participants cannot deal in the Cash Market Products either as Principal or agent until Official Quotation is granted in respect of those Cash Market Products;
(ii) accepts selling orders in Cash Market Products (except Loan Securities) for which Official Quotation will be sought, and the Trading Participant takes all reasonable steps to ensure that the Cash Market Products are not sold before the Cash Market Products have been granted Official Quotation; or
(iii) accepts selling orders in Cash Market Products (except Loan Securities) where the Cash Market Products are of the same class as Cash Market Products which have already been granted Official Quotation and:
the Cash Market Products have already been issued by the Issuer; and
(B) the fact that the Cash Market Products have been issued has been notified to, and released to the Market by, the Company Announcements Office of the Market Operator;
(f) a Trading Participant may dispose of or acquire ETF Securities which are the subject of a subscription application if:
the ETF Securities are in a class of ETF Securities which are quoted on the 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 Market in accordance with these Rules and the Market Operating Rules;
(iv) there is an arrangement between the Issuer and the Market Operator 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 the Market Operator on the basis required by the Market Operator.
Note: There is no penalty for this Rule.
5.10.3 Dealings in Securities for which Official Quotation will not be sought
A Trading 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 Market of the details of the issue.
Note: There is no penalty for this Rule.
5.10.4 Dealings in Cash Market Products suspended from Official Quotation
A Trading Participant must not deal in Cash Market Products which have been suspended from quotation or trading unless the Cash Market Product is an Equity Market Product that is quoted on another Equity Market and is not in a Trading Suspension on that Equity Market.
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 Cash Market Products as underwriter or sub-underwriter must not offer such Cash Market Products to clients unless:
they first inform the clients concerned of the closing date of the issue or offering of the Cash Market 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 Trading Participant seeks out-of-pocket expenses involved in the purchase or sale of Cash Market Products, the Trading Participant must not cover that charge by an increase or reduction in the price of the Cash Market 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:
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 subrules (2) and (3), if a Market Participant has reasonable grounds to suspect that:
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:
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:
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 to 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) if the Market Participant has reported the information that would otherwise be required to be contained in the notification to ASIC under subrule (1) to the Australian Transaction Reports and Analysis Centre under section 41 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006or under section 16 of the Financial Transaction Reports Act 1988.
(3) A Market Participant is not required to comply with subrule (1) until 1 November 2012.
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, to any person other than:
for the purposes of seeking legal advice; or
(b) as required by law.