ASIC Market Integrity Rules (Chi-X Australia Market) 2011

Part 2.1 Management requirements

2.1.1 Management structure

(1) A Market Participant must, in relation to its conduct, and that part of its business that it conducts, on or in relation to the Chi-X Market, wherever the conduct occurs or the business is located and regardless of the number of offices operated or intended to be operated by the Market Participant, have appropriate management structures in place to ensure that:

(a) it has operations and processes in place that are reasonably designed, implemented, and that function, so as to achieve compliance by the Market Participant with these Rules and the Market Operating Rules;
(b) the design, implementation, functioning and review of those operations and processes are subject to the supervision of one or more Responsible Executives; and
(c) each Responsible Executive has sufficient seniority and authority within the Market Participant to exert control, leadership, influence and supervision over those operations and processes.

(2) A Market Participant must keep accurate records of its management structure and its allocation of responsibilities among its Responsible Executives.

2.1.2 Notification of management structure

(1) Subject to subrule (4), a Market Participant that is a Market Participant as at the Commencement Date must give to ASIC a document that sets out its management structure and its allocation of its responsibilities among its Responsible Executives, within 10 Business Days of the Commencement Date.

(2) Subject to subrule (4), a Market Participant that was not a Market Participant as at the Commencement Date must give to ASIC a document that sets out its management structure and its allocation of its responsibilities among its Responsible Executives, within 10 Business Days of becoming a Market Participant.

(3) A Market Participant that has given to ASIC a document under subrule (1) or (2) must notify ASIC in writing, within 10 Business Days, of any significant change in the management structure or its allocation of its responsibilities among its Responsible Executives shown in that document.

(4) A Market Participant is not required to comply with subrule (1) or (2), and is taken for the purposes of subrule (3) to have given ASIC a document under subrule (1) or (2), where, at the time the obligation to comply with the relevant subrule would arise, all of the following are satisfied:

(b) the Market Participant has given ASIC a document or set of documents that complies with ASX Market Integrity Rule 2.1.2;
(c) the Market Participant proposes to rely on the document or set of documents referred to in paragraph (b) for the purposes of complying with these Rules; and
(d) the Market Participant notifies ASIC in writing:
  (i) that the Market Participant proposes to rely on the document or set of documents referred to in paragraph (b) for the purposes referred to in paragraph (c); and
  (ii) of any significant change in the management structure or its allocation of its responsibilities among its Responsible Executives shown in that document or those documents.

2.1.3 Supervisory procedures

A Market Participant must have appropriate supervisory policies and procedures to ensure compliance by the Market Participant and each person involved in its business as a Market Participant with these Rules, the Market Operating Rules and the Corporations Act.

2.1.4 Persons involved in the business—Good fame and character requirement

(1) A Market Participant must ensure that any Employee or other person who is or will be involved in the business of the Market Participant in connection with the Chi-X Market and, in the case of a body corporate, each director or Controller, is of good fame and character and high business integrity having regard to subrule (2).

(2) In assessing whether a person is of good fame and character and high business integrity for the purpose of subrule (1):

(a) a person will not be of good fame and character if he or she is disqualified from managing a corporation under the Corporations Act or under the law of another country, or is an insolvent under administration or its equivalent in another country; and
(b) a person may not be of good fame and character or high business integrity if the person has been:
  (i) convicted of any offence;
  (ii) disciplined or adversely mentioned in a report made by, or at the request of, any government or governmental authority or agency;
  (iii) adversely mentioned in a report made by, or at the request of, the Market Operator, a Clearing Facility, a Settlement Facility or any other exchange, market operator or clearing and settlement facility; or
  (iv) disciplined by the Market Operator, a Clearing Facility, a Settlement Facility or any other exchange, market operator or clearing and settlement facility.

2.1.5 Unprofessional Conduct

(1) A Market Participant must not engage in Unprofessional Conduct.

(2) A Market Participant must ensure that its Responsible Executives do not engage in Unprofessional Conduct.

2.1.6 Responsibility for individuals involved in business

A Market Participant is responsible for all actions and omissions of its Employees.

Part 2.2 Insurance and information requirements

2.2.1 Insurance requirements—Obligation to have insurance

(1) Subject to Rule 2.2.2, every Market Participant must, where the Market Participant acts for any person other than itself or a Related Body Corporate, take out and maintain, at all times, a professional indemnity (or equivalent) insurance policy that the Market Participant determines (acting reasonably) to be adequate having regard to the nature and extent of the business carried on by the Market Participant in connection with its business as a Market Participant and the responsibilities and risks assumed or which may be assumed by the Market Participant in connection with that business.

(2) The professional indemnity (or equivalent) insurance referred to in subrule (1) must include insurance against a breach of duty the Market Participant owes in a professional capacity, whether owed in contract or otherwise at law, arising from any act or omission of the Market Participant and its Employees.

2.2.2 Insurance requirements—Insurance with Related Body Corporate

If the insurance referred to in Rule 2.2.1 is provided by a Related Body Corporate, the Market Participant must provide ASIC with the following information by no later than 10 Business Days after the issue or renewal of the insurance:

(a) the name of the Related Body Corporate and a copy of evidence sufficient to establish that it is a Related Body Corporate; and
(b) confirmation from the Related Body Corporate that it is the insurer or the self-insurer covering and indemnifying the Market Participant against the liabilities referred to in Rule 2.2.1 and a copy of the certificate evidencing the insurance.

2.2.4 Insurance requirements—Notification of claims

In relation to any liability or potential liability of the type referred to in Rule 2.2.1, a Market Participant must immediately notify ASIC of any notification to its insurer of any claim, potential claim or circumstance that might give rise to a claim and must include the following details:

(a) any circumstance which is likely to give rise to a claim or potential claim against the Market Participant;
(b) the receipt of a notice from any person of any intention to make a claim or potential claim against the Market Participant; and
(c) the details of any claim, potential claim or circumstance against the Market Participant, including the gross contingent liability, the net contingent liability, the full name of the Market Participant’s insurer and the date the Market Participant notified its insurer of the claim, potential claim or circumstance.

2.2.5 Information requirements—Obligation to notify of legal proceedings

If:

(a) a Market Participant commences legal proceedings against, or has legal proceedings commenced against it by, another Market Participant, a Clearing Participant, a regulatory authority or a client in connection with their role as a Market Participant; and
(b) those legal proceedings may affect the operations of the Market Operator, or the interpretation of these Rules or the Market Operating Rules,

the Market Participant must, upon commencing or upon becoming aware of the proceedings, immediately notify ASIC and the Market Operator in writing of the particulars of the proceedings.

Part 2.3 Responsible Executives

2.3.1 Appointment or resignation of Responsible Executives

(1) A Market Participant must notify ASIC within 10 Business Days if the Market Participant appoints a new Responsible Executive, or if a person ceases to be a Responsible Executive of the Market Participant.

(2) A Market Participant must not appoint a person as a Responsible Executive unless:

(a) the person has skills, knowledge and experience that are appropriate having regard to the supervisory role that the person will perform as a Responsible Executive in the business of the Market Participant; and
(b) as at the date the Market Participant appoints the person, the person satisfies the requirements of ASX Market Integrity Rule 2.3.1(b) or (c); or
(c) the person has:
  (i) attained a mark of at least 65% in an examination approved by ASIC under subrule (3), in the 12 months preceding the date the Market Participant appoints the person as a Responsible Executive; and
  (ii) satisfied the Compliance Education Requirements from the date the person passed the examination as referred to in subparagraph (i) to the date the Market Participant appoints the person as a Responsible Executive, pro-rata to the number of full months in that period.

(3) For the purposes of subparagraph (2)(c)(i), ASIC may approve, in writing, one or more examinations that, in the opinion of ASIC, assess knowledge and competency in the application of the provisions of these Rules, the Market Operating Rules and the Corporations Act that govern the operation of the Chi-X Market and are relevant to the role performed by Responsible Executives.

2.3.2 Ongoing responsibilities of Market Participants in relation to Responsible Executives

A Market Participant must ensure that each of its Responsible Executives:

(a) supervises the design and implementation activities and the functioning and review of the operations and processes referred to in Rule 2.1.1 for the Relevant Activities of that Responsible Executive; and
(b) is accountable to the Market Participant for the effective design, implementation, functioning and review of the operations and processes referred to in paragraph (a).

2.3.3 Annual review and representation to Market Participant

(1) A Market Participant must ensure that each of its Responsible Executives:

(a) maintains the currency of his or her knowledge of these Rules, the Market Operating Rules and the Corporations Act related to the business that the Market Participant conducts in the Chi-X Market;
(b) by 10 July each year, performs a review as at 30 June of that year, including all matters reasonably considered by the Responsible Executive to be necessary in the circumstances, of the supervision and control procedures involved in the business of the Market Participant and other relevant documentation concerning the Market Participant’s compliance with these Rules and the Market Operating Rules for the 12 month period ending on 30 June that year;
(c) by 10 July each year, determines whether, based on the enquiries referred to in paragraph (b), the controls over the operations and processes of the Relevant Activities have been, during the period referred to in paragraph (b), and continue to be, reasonably designed, implemented and functioning to achieve compliance by the Market Participant with these Rules and the Market Operating Rules; and
(d) by 10 July each year, provides a signed and dated representation to the Market Participant as to whether:
  (i) the requirements of paragraphs (a) and (b) have been met for the period referred to in paragraph (b); and
  (ii) the controls over the operations and processes of the Relevant Activities have been, for the period referred to in paragraph (b), and continue to be, reasonably designed, implemented and functioning to achieve compliance by the Market Participant with the Market Operating Rules and these Rules.

(2) The Market Participant must retain copies of the representation referred to at paragraph (1)(d), and of the documentation concerning the Market Participant’s compliance with these Rules and the Market Operating Rules on which the representation is based, for 7 years from the date the representation is provided to the Market Participant.

2.3.4 Continuing education requirements for Responsible Executives

A Market Participant must ensure that, during the period from 1 July each year until 30 June the following year, each of its Responsible Executives meets the Compliance Education Requirements pro-rata to the number of complete months during that period in which that person is a Responsible Executive of the Market Participant.

2.3.5 Annual continuing education and compliance self-assessment

(1) Subject to subrule (2), a Market Participant must provide a written notification to ASIC by 31 July each year that contains the following information:

(a) the name of each person who was a Responsible Executive of the Market Participant during the period from 1 July in the preceding calendar year to 30 June in the calendar year in which the notification is provided;
(b) if the person was a member of a professional body or bodies during the period referred to in paragraph (a), the name of that body or those bodies;
(c) a statement in relation to each person that the Market Participant confirms that, during the period referred to in paragraph (a), the person:
  (i) has satisfied; or
  (ii) has not satisfied,
as the case may be, each of the requirements of subrule 2.1.4(1) (good fame and character), paragraphs 2.3.1(2)(a) and (b) or (c) (skills, knowledge, experience and qualifications), subrule 2.1.5(2) (Unprofessional Conduct), paragraph 2.3.3(1)(d) (annual representation) and Rule 2.3.4 (continuing education), while the person was a Responsible Executive of the Market Participant during that period; and
(d) if subparagraph (c)(ii) applies, an explanation of the reason that the person has not satisfied the requirement.

(2) A notification provided under subrule (1) prior to 1 August 2011 need only relate to the period from the Commencement Date to 30 June 2011.

(3) The Market Participant must retain copies of the records upon which the notification referred to in subrule (1) is based for 7 years from the end of the period to which the notification relates.

Part 2.4 Retail Client Adviser Accreditation

2.4.1 Accreditation required

(1) A Market Participant must ensure that each of its Representatives who provides Financial Product Advice to a Retail Client in relation to Investment Products (Warrants) holds the relevant accreditation required by these Rules.

(2) A Market Participant must not, and must ensure that a Representative does not, hold himself or herself out as holding a type of accreditation under these Rules if they do not hold that type of accreditation.

(3) A person:

(a) accredited as a Level One Accredited Derivatives Adviser under the Rule 2.4.7 of the ASX Market Integrity Rules is a Level One Accredited Derivatives Adviser under these Rules;
(b) accredited as a Level Two Accredited Derivatives Adviser under the Rule 2.4.8 of the ASX Market Integrity Rules is a Level Two Accredited Derivatives under these Rules.

2.4.2 Extent of advice to clients—Level One Accredited Derivatives Adviser

(1) A Market Participant must ensure that each of its Representatives who provides Financial Product Advice to a Retail Client in relation to:

(a) subscribing for and buying and selling Investment Products (Warrants); and
(b) exercising Investment Products (Warrants),

is accredited as a Level One Accredited Derivatives Adviser or a Level Two Accredited Derivatives Adviser.

Note: There is no Rule 2.4.3

2.4.4 Extent of advice to clients—Level Two Accredited Derivatives Adviser

(1) A Market Participant must ensure that each of its Representatives who provides Financial Product Advice to a Retail Client in relation to:

(a) subscribing for, buying, selling and exercising Investment Products (Warrants); and
(b) all trading strategies relating to Investment Products (Warrants),
is accredited as a Level Two Accredited Derivatives Adviser.

(2) For the avoidance of doubt, a person accredited as a Level Two Accredited Derivatives Adviser may advise and make recommendations in relation to the Financial Products and strategies set out in Rule 2.4.2.

Note: There is no Rule 2.4.5 or 2.4.6

2.4.7 Accreditation—Level One Accredited Derivatives Adviser

(1) ASIC may, subject to any conditions ASIC considers appropriate, accredit a person as a Level One Accredited Derivatives Adviser for a period of time if:

(a) the person is a Representative of a Market Participant and the Market Participant nominates the person to be a Level One Accredited Derivatives Adviser under subrule (2);
(b) the person:
  (i) unless the person is applying for, or has been granted, an exemption under subrule 2.4.11(1), has obtained a score of 80% or more for an Accreditation Examination for Level One Accredited Derivatives Advisers approved by ASIC in accordance with subrule (4);
  (ii) has successfully completed an educational module or subject, or a series of educational modules or subjects, approved by ASIC in accordance with subrule (4); and
(c) ASIC has no reason to believe that the person does not have the requisite skill, knowledge and integrity to provide Financial Product Advice of the kind covered by Rule 2.4.2.

(2) A Market Participant may nominate a person to be a Level One Accredited Derivatives Adviser by submitting a written application to ASIC that includes:

(a) the full name, date of birth, business address and email address of the applicant, a statement that the applicant is a Representative of the Market Participant and a description of the nature of the relationship of the applicant to the Market Participant (for example, employee);
(b) the name, business address and AFSL number of the Market Participant nominating the person to be a Level One Accredited Derivatives Adviser;
(c) the name, position and contact telephone number of the director, partner, Responsible Executive or Compliance Manager of the Market Participant referred to in subrule (3);
(d) unless the person has been granted, or is applying for, an exemption under subrule 2.4.11(1), a declaration by the Market Participant that the applicant meets the requirements of paragraph (1)(b);
(e) if subparagraph (1)(b)(ii) applies, evidence that the applicant has successfully completed the educational subject or module, or series of educational subjects or modules, referred to in that subparagraph; and
(f) an acknowledgement by the Market Participant that accreditation as a Level One Accredited Derivatives Adviser will only authorise the applicant to provide Financial Product Advice of the kind covered by Rule 2.4.2.

(3) A director, partner, Responsible Executive or Compliance Manager of the Market Participant must sign and date the application referred to in subrule (2).

(4) For the purposes of subrule (1), ASIC may approve examinations, educational modules or subjects, or a series of educational modules or subjects, that are relevant to Financial Product Advice of the kind covered by Rule 2.4.2.

2.4.8 Accreditation—Level Two Accredited Derivatives Adviser

(1) ASIC may, subject to any conditions ASIC considers appropriate, accredit a person as a Level Two Accredited Derivatives Adviser for a period of time if:

(a) the person is a Representative of a Market Participant and the Market Participant nominates the person as a Level Two Accredited Derivatives Adviser in accordance with subrule (2);
(b) unless the person is applying for, or has been granted, an exemption under subrule 2.4.11(1), the person has obtained a score of 80% or more for each of the Accreditation Examinations for Level One Accredited Derivatives Advisers and Level Two Accredited Derivatives Advisers approved by ASIC in accordance with subrule (4); and
(c) ASIC has no reason to believe that the person does not have the requisite skill, knowledge and integrity to provide Financial Product Advice of the kind covered by Rules 2.4.2 and 2.4.4.

(2) A Market Participant may nominate a person to be a Level Two Accredited Derivatives Adviser by submitting a written application to ASIC that includes:

(a) the full name, date of birth, business address, email address and contact telephone number of the applicant, a statement that the applicant is a Representative of the Market Participant and description of the nature of the relationship of the applicant to the Market Participant (for example, employee);
(b) the name, business address and AFSL number of the Market Participant nominating the person to be a Level Two Accredited Derivatives Adviser;
(c) the name, position and contact telephone number of the director, partner, Responsible Executive or Compliance Manager of the Market Participant referred to in subrule (3);
(d) unless the person has been granted, or is applying for, an exemption under subrule 2.4.11(1), a declaration by the Market Participant that the applicant meets the requirements of paragraph (1)(b); and
(e) an acknowledgement by the Market Participant that accreditation as a Level Two Accredited Derivatives Adviser will only authorise the applicant to provide Financial Product Advice of the kind covered by Rules 2.4.2 and 2.4.4.

(3) A director, partner, Responsible Executive or Compliance Manager of the Market Participant must sign and date the application referred to in subrule (2).

(4) For the purposes of subrule (1), ASIC may approve, in writing one or more examinations that are relevant to Financial Product Advice of the kind covered by Rules 2.4.2 and 2.4.4.

2.4.9 Acceptance of application

(1) If ASIC is satisfied that:

(a) an application for accreditation made by a Market Participant; and
(b) the person in respect of which the application for accreditation is made,

under Rule 2.4.7 or 2.4.8, meets the applicable requirements of the Rule, ASIC will accredit the person in the relevant category of accreditation.

(2) ASIC will give the Market Participant a written notice that a person has been accredited under subrule (1), specifying:

(a) any conditions to which the accreditation is subject;
(b) the Renewal Date.
(3) Nothing in subrule (1) prevents ASIC from seeking further information from the Market Participant for the purposes of satisfying itself that the person or the application meets the requirements of the relevant Rule.

2.4.10 Rejection of application

(1) Subject to subrule (2), if ASIC is not satisfied that:

an application for accreditation made by a Market Participant; or

(b) the person in respect of which the application for accreditation is made,

under Rule 2.4.7 or 2.4.8, meets the applicable requirements of the Rule, ASIC will reject the application.

(2) ASIC will give the Market Participant a written notice that an application for accreditation has been rejected under subrule (1), specifying the reason or reasons why the application is rejected.

(3) Nothing in subrule (1) prevents ASIC from seeking further information from the Market Participant for the purposes of satisfying itself that the person or the application meets the requirements of the relevant Rule.

2.4.11 Exemption for other accreditation and experience

(1) ASIC may exempt a person, in writing, from the requirement to sit an Accreditation Examination if the person has:

(a) completed a course listed on ASIC’s Training Register as a specialist course and which, in the opinion of ASIC, provides appropriate coverage of these Rules, the Market Operating Rules, the Trading Platform and the relevant Financial Products;
(b) completed relevant training, other than a course listed on ASIC’s Training Register, and can demonstrate, to the satisfaction of ASIC, their knowledge of these Rules, the Market Operating Rules, the Trading Platform and the relevant Financial Products; or
(c) extensive relevant industry experience and can demonstrate, to the satisfaction of ASIC, their knowledge of these Rules, the Market Operating Rules, the Trading Platform and the relevant Financial Products.
(2) ASIC may require a Market Participant to provide further information which ASIC considers necessary to establish the experience, expertise and professional history of a person nominated under this Rule for exemption from the examination requirement.
(3) ASIC may require a person nominated for exemption under this Rule to complete and pass a modified version of an Accreditation Examination to demonstrate the person’s expertise and knowledge of the Rules, the Market Operating Rules, the Trading Platform and relevant Financial Products.

2.4.12 Examinations

(1) Unless ASIC gives permission under this Rule, a person may sit an Accreditation Examination for a category of accreditation no more than three times.

(2) If a person has not obtained the required pass level after sitting the Accreditation Examination three times, the Market Participant may apply to ASIC under subrule (3) for permission for the person to sit the Accreditation Examination again.

(3) A Market Participant may apply for permission for a person to sit an Accreditation Examination again by submitting a written application to ASIC that includes:

(a) the full name, business and email address of the applicant;
(b) the name and business address of the Market Participant seeking permission for the applicant to sit the Accreditation Examination again;
(c) the type of Accreditation Examination that the Market Participant is applying for the applicant to re-sit;
(d) the date on which the person last sat the Accreditation Examination;
(e) reasons in support of the applicant being permitted to sit the Accreditation Examination again; and
(f) the name and position of the Responsible Executive referred to in subrule (4).

(4) A Responsible Executive of the Market Participant (or, if the applicant is a Responsible Executive, another Responsible Executive of the Market Participant) must sign and date the application referred to in subrule (3).

(5) After considering the application, ASIC may permit the person to sit the examination again.

(6) ASIC will not consider an application under this Rule unless 3 months have passed since the person last sat the Accreditation Examination.

2.4.13 Renewal of accreditation

(1) ASIC may renew the accreditation of an Accredited Adviser for a period of time with effect from the Renewal Date if:

(a) the person is a Representative of a Market Participant and the Market Participant applies to ASIC during the Renewal Period to renew the person’s accreditation under subrule (2);
(b) the person has complied with the Continuing Professional Education Requirements pro-rata to the number of full months in the period from the date the Accredited Adviser was first accredited or last renewed their accreditation to the date of the application; and
(c) ASIC has no reason to believe that the person does not have the requisite skill, knowledge and integrity to provide Financial Product Advice of the kind covered by the relevant category of accreditation.

(2) A Market Participant may apply to ASIC to renew the accreditation of a person by submitting a written application to ASIC during the Renewal Period that includes:

(a) the name and business address of the Market Participant seeking renewal of the accreditation of the persons named in the application;
(b) in respect of each Accredited Adviser seeking renewal of accreditation:
  (i) the name of the Accredited Adviser;
  (ii) the category of accreditation held by the Accredited Adviser;
  (iii) a declaration that the Accredited Adviser is a Representative of the Market Participant;
  (iv) a declaration that the Accredited Adviser meets the requirements of paragraph (1)(b); and
(c) the name, position, contact telephone number, facsimile number and email address of the director, partner, Responsible Executive or Compliance Manager of the Market Participant referred to in subrule (3).
(3) A director, partner, Responsible Executive or Compliance Manager of the Market Participant must sign and date the application referred to in subrule (2).

2.4.14 Acceptance of application

(1) If ASIC is satisfied that:

(a) an application for renewal of accreditation made by a Market Participant; and
(b) a person in respect of which the application has been made,

meets the requirements of Rule 2.4.13, ASIC will renew the accreditation of the person with effect from the Renewal Date.

(2) ASIC will give the Market Participant a written notice that a person’s accreditation has been renewed under subrule (1), specifying the next Renewal Date.

(3) Nothing in subrule (1) prevents ASIC from seeking further information from the Market Participant for the purposes of satisfying itself that the person or the application meets the requirements of the relevant Rule.

2.4.15 Rejection of application or renewal subject to conditions

(1) Subject to subrule (2), if ASIC is not satisfied that:

(a) an application for renewal of accreditation; or
(b) a person in respect of which the application has been made,

meets the requirements of Rule 2.4.13, ASIC may:

reject the application for renewal in respect of one or more persons; or
renew the person’s accreditation but subject to such conditions as ASIC considers appropriate.

(2) If ASIC rejects the application under paragraph (1)(c), ASIC will give the Market Participant a written notice that a person’s application for renewal has been rejected, specifying the reason or reasons that the application has been rejected.
(3) If ASIC renews the person’s accreditation subject to conditions under paragraph (1)(d), ASIC will give the Market Participant a written notice that a person’s accreditation has been renewed, specifying:

the conditions to which the renewed accreditation is subject; and

(b) the next Renewal Date.
(4) Nothing in subrule (1) prevents ASIC from seeking further information from the Market Participant for the purposes of satisfying itself that the person or the application meets the requirements of the relevant Rule.

2.4.16 Effect of non-renewal

If, by 1 Business Day after the Renewal Date, ASIC has not renewed the accreditation of an Accredited Adviser under subrule 2.4.14(1) or paragraph 2.4.15(1)(d), the person will cease to hold the relevant accreditation with effect from the Renewal Date.

2.4.17 Automatic withdrawal of accreditation

(1) An Accredited Adviser’s accreditation is automatically withdrawn when the Accredited Adviser ceases to be a Representative of the Market Participant that made the application for the person to be accredited.

(2) If an Accredited Adviser ceases to be a Representative of a Market Participant, the Market Participant must notify ASIC in writing within 5 Business Days of:

(a) the name and date of birth of the Accredited Adviser; and
(b) the date the Accredited Adviser ceased to be a Representative of the Market Participant.

2.4.18 Voluntary withdrawal of accreditation

(1) ASIC may withdraw the accreditation of an Accredited Adviser in one or more categories of accreditation if the Market Participant of which the person is a Representative requests that ASIC withdraw the accreditation under subrule (2).

(2) A Market Participant may request that ASIC withdraw the accreditation of an Accredited Adviser by submitting a written application to ASIC that includes:

(a) the name and date of birth of the Accredited Adviser;
(b) the name and business address of the Market Participant requesting that the accreditation be withdrawn;
(c) the category of the accreditation which is to be withdrawn;
(d) the Trading Day on which the Market Participant wishes the withdrawal to take effect;
(e) the reasons for withdrawal of the accreditation; and
(f) the name, position and contact telephone number of the director, partner, Responsible Executive or Compliance Manager of the Market Participant referred to in paragraph (3)(a).
(3) The application must be signed and dated by:

a director, partner, Responsible Executive or Compliance Manager of the Market Participant; and

(b) the relevant Accredited Adviser.

2.4.19 Suspension or withdrawal by ASIC

(1) ASIC may suspend or withdraw the accreditation of an Accredited Adviser in a category of accreditation if ASIC has reason to believe that the person does not have the requisite skill, knowledge or integrity to provide Financial Product Advice of the kind covered by the relevant category of accreditation.

(2) ASIC will notify the relevant Market Participant and the Accredited Adviser in writing of a suspension or withdrawal of accreditation under subrule (1) and the reasons for the suspension or withdrawal.

2.4.20 Re-accreditation after withdrawal or expiry

(1) ASIC may re-accredit a person whose accreditation has been withdrawn or has expired, without the person sitting another Accreditation Examination if:

(a) the person is a Representative of a Market Participant and the Market Participant applies to ASIC to re-accredit the person under subrule (2);
(b) the person became an Employee of, or was otherwise engaged by, a Market Participant within 2 years from the date their accreditation was withdrawn or expired, and within 2 months of being re-accredited will re-commence providing Financial Product Advice to clients of a Market Participant of a kind covered by Rules 2.4.2 or 2.4.4;
(c) the person has complied with the Continuing Professional Education Requirements pro-rata to the number of full months since the date their accreditation was granted or last renewed; and
(d) ASIC has no reason to believe that the person does not have the requisite skill, knowledge and integrity to provide Financial Product Advice of the kind covered by the relevant category of accreditation.

(2) A Market Participant may apply to ASIC to re-accredit a person whose accreditation has been withdrawn or has expired by submitting a written application to ASIC that includes:

(a) the name, date of birth, business address and email address of the applicant, a statement that the applicant is a Representative of the Market Participant and a description of the nature of the relationship of the applicant to the Market Participant (for example, employee);
(b) the name, business address and AFSL number of the Market Participant seeking renewal of the accreditation of the applicant;
(c) the category of accreditation sought;
(d) a statement that the Market Participant requests the requirement for the person to sit the Accreditation Examination be waived;
(e) a declaration by the Market Participant that the applicant meets the requirements of paragraph (1)(c); and
(f) the name, position, contact telephone number, facsimile number and email address of the director, partner, Responsible Executive or Compliance Manager of the Market Participant referred to in subrule (3).
(3) A director, partner, Responsible Executive or Compliance Manager of the Market Participant must sign and date the application.
(4) If ASIC is satisfied that:

an application for re-accreditation made by a Market Participant; and
the person in respect of which the application for re-accreditation is made,

meets the applicable requirements of this Rule, ASIC will re-accredit the person in the relevant category of accreditation.
(5) ASIC will give the Market Participant a written notice that the person has been re-accredited under subrule (4), specifying:

any conditions to which the accreditation is subject;

the Renewal Date.

(6) Nothing in subrule (4) prevents ASIC from seeking further information from the Market Participant for the purposes of satisfying itself that the person or the application meets the requirements of the relevant Rule.

2.4.21 Continuing Professional Education Requirements for Accredited Advisers

(1) A Market Participant must ensure that all of its Accredited Advisers comply with any continuing professional education requirements approved by ASIC in accordance with subrule (2).

(2) For the purposes of subrule (1), ASIC may approve, in writing, continuing professional education requirements for Accredited Advisers that are relevant to the skills and knowledge required to provide Financial Product Advice of the kind covered by the relevant category of accreditation.

2.4.22 Managed Discretionary Accounts— Investment Products (Warrants)

A Market Participant must ensure that a Managed Discretionary Account for a Retail Client which involves dealing in Investment Products (Warrants) is operated by an Accredited Adviser with the appropriate accreditation under these Rules.

Part 2.5 Designated Trading Representatives (DTRs)

2.5.1 Trading in a Trading Platform

A Market Participant must ensure that all trading in a Trading Platform by the Market Participant is carried out either:

(a) by DTRs; or
(b) in accordance with the Automated Order Processing Requirements.

2.5.2 Market Participant must have a DTR

A Market Participant must have at least one DTR.

2.5.3 DTRs may submit Trading Messages

A Market Participant must ensure that only its DTRs submit Trading Messages into the Trading Platform through the Market Participant’s system, unless the trading is conducted in accordance with the Automated Order Processing Requirements.

2.5.4 Responsibility of Market Participant

A Market Participant is responsible for the accuracy of details, the integrity and bona fides of all Trading Messages containing their unique identifier that are submitted into the Trading Platform, regardless of whether a DTR of the Market Participant was involved in their submission.

2.5.5 DTR criteria

A Market Participant must ensure that:

(a) each of its DTRs is at all times a Representative of the Market Participant authorised to deal in the Cash Market Products in respect of which the DTR submits orders on behalf of the Market Participant either:
  (i) under the Market Participant’s AFSL; or
  (ii) under the person’s own AFSL (unless the person is a Principal Trader not required to hold an AFSL);
(b) each of its DTRs is suitably qualified and experienced to deal in the Cash Market Products referred to in paragraph (a), by submitting orders on behalf of the Market Participant;
(c) prior to submitting Trading Messages on behalf of the Market Participant, each DTR has demonstrated to the Market Participant knowledge of the Dealing Rules governing the process of dealing and reporting Market Transactions on the Trading Platform, and the relevant practices of the Market Operator; and
(d) each of its DTRs does not:
  (i) execute any order in a Trading Platform for or on behalf of, or which will benefit, directly or indirectly, the DTR or any associate or Relative of the DTR, without the prior written approval of the Market Participant; or
  (ii) intentionally take advantage of a situation arising as a result of:
  (A) a breakdown or malfunction in the Market Operator’s procedures or systems; or
  (B) an error in entries made by the Market Operator within a Trading Platform.

2.5.6 Market Participant must allocate unique identifier

A Market Participant must allocate a unique identifier to each DTR of the Market Participant.

2.5.7 Records—DTRs

A Market Participant must maintain a record of:

(a) the name, contact details and DTR identifier of each of its DTRs, while the person remains a DTR of a Market Participant; and
(b) the information in paragraph (a) for a period of 7 years from the date the person ceases to be a DTR of the Market Participant.

Part 2.6 Foreign Participants

2.6.1 Minimum presence requirements

(1) This Rule applies to a Market Participant (“Foreign Market Participant”) that:

(a) is a foreign entity; and
(b) does not hold an AFSL.

(2) Before entering into a Market Transaction, a Foreign Market Participant must provide ASIC with a deed of the Foreign Market Participant for the benefit of and enforceable by ASIC and the other persons referred to in subsection 659B(1) of the Corporations Act, which deed provides that:

(a) the deed is irrevocable except with the prior written consent of ASIC;
(b) the Foreign Market Participant submits to the non-exclusive jurisdiction of the Australian courts in legal proceedings conducted by ASIC (including under section 50 of the ASIC Act) and, in relation to proceedings relating to a financial services law, by any person referred to in subsection 659B(1) of the Corporations Act and whether brought in the name of ASIC or the Crown or otherwise;
(c) the Foreign Market Participant covenants to comply with any order of an Australian court in respect of any matter relating to the activities or conduct of the Foreign Market Participant in relation to the Chi-X Market or in relation to Financial Products traded on the Chi-X Market, including but not limited to any matter relating to the Foreign Market Participant’s obligations under:
  (i) the ASIC Act;
  (ii) the Corporations Act; and
  (iii) the Corporations (Fees) Act 2001;
(d) if the Foreign Market Participant is not registered under Division 2 of Part 5B.2 of the Corporations Act:
  (i) the Foreign Market Participant must have at all times an agent who is:
  (A) a natural person or a company;
  (B) resident in this jurisdiction; and
  (C) authorised to accept, on behalf of the Foreign Market Participant, service of process and notices; and
  (ii) the Foreign Market Participant must notify ASIC of any change to:
  (A) the agent; or
  (B) the name and address of the agent (if the agent is a company, address means the address of the registered office of the company); and
  (iii) service of process on the Foreign Market Participant in relation to legal proceedings conducted by ASIC (including under section 50 of the ASIC Act), and in relation to proceedings relating to a financial services law, by any person referred to in subsection 659B(1) of the Corporations Act and whether brought in the name of ASIC or the Crown or otherwise, can be effected by service on the agent;
(e) the deed applies notwithstanding that the Foreign Market Participant may have ceased to be a Market Participant; and
(f) such additional terms notified by ASIC to the Foreign Market Participant.

Chapter 3: Client relationships Chapter 3: Client relationships

Chapter 3: Client relationships

Part 3.1 Clients trading in products for first time

3.1.1 Documents to be given to a client

Before accepting an order from a person to enter into a Market Transaction, a Market Participant must give the person, in addition to all of the documents which the Market Participant is required to give the person in respect of the Market Transaction under the Corporations Act, all of the documents the Market Participant is required to give the person in respect of the Market Transaction under this Part.

3.1.2 Documents to be given to a client: Investment Products (Warrants)

(1) Subject to subrule (2), before a Market Participant accepts an Order from a person to purchase an Investment Product (Warrant), the Market Participant must give the person a copy of any current explanatory booklet in respect of Investment Products (Warrants) published by the Market Operator, together with any updates to that explanatory booklet published by the Market Operator, if it is the first time an Order in respect of Investment Products (Warrants) is accepted from the person.

(2) A Market Participant is not required to comply with subrule (1) if the person from whom the Order is accepted is a Wholesale Client, unless the person expressly requests it.

(3) For the avoidance of doubt, a Market Participant is not required to comply with subrule (1) if the person from whom the Order is accepted is entering into a Market Transaction to sell Investment Products (Warrants).

3.1.3 Information to be given to a client: Execution arrangements

(1) Subject to subrule (2), before accepting an Order from a person to enter into a Market Transaction, if the Market Participant does not have Trading Permission to execute that Market Transaction, the Market Participant must give the person a document which clearly discloses the execution arrangements in place for that Market Transaction including, without limitation:

(a) the name, principal telephone number and principal business address of the Market Participant which executes the Market Transactions of the Market Participant; and
(b) the extent of any NGF coverage, or coverage under other Compensation Arrangements, of the Market Transaction.

(2) The Market Participant is not required to comply with subrule (1) in relation to a Client where, at the time the obligation to comply with subrule (1) would arise, all of the following are satisfied:

(b) the Market Participant has given the Client a document that complies with ASX Market Integrity Rule 3.1.3 with respect to execution arrangements the Market Participant has in place for executing the Client’s transactions in Equity Market Products on the ASX Market;
(c) the Market Participant proposes to rely on the execution arrangements referred to in paragraph (b) for the purposes of executing the Client’s transactions in Equity Market Products on the Chi-X Market;
(d) the Market Participant notifies the Client in writing of any material change to the execution arrangements referred to in paragraph (b), including, without limitation, any changes to the matters referred to in paragraph (1)(a) and (b); and
(e) the Market Transaction is a Market Transaction in a Cash Market Product.

3.1.4 Information to be given to a client: Clearing arrangements

(1) Subject to subrule (3), before accepting an order from a person (the “Client”) to enter into a Market Transaction if the Market Participant:

(a) is not a Clearing Participant, who is permitted under the Clearing Rules to clear the Market Transaction; or
(b) is a Clearing Participant who is permitted under the Clearing Rules to clear that Market Transaction, but has an arrangement with another Clearing Participant to clear that Market Transaction, and such transaction is cleared under the arrangement,

the Market Participant must give the Client a document which clearly discloses the clearing arrangements in place for that Market Transaction, including, without limitation, any information required by subrule (2).

(2) The written disclosure document referred to in subrule (1) must include:

(a) the name, principal telephone number and principal business address of the Clearing Participant which clears the Market Transactions of the Market Participant; or
(b) if, under the clearing arrangements:
  (i) notwithstanding that the Market Transaction may have been entered into on the Client’s behalf, the Clearing Participant carries the Clearing Obligations and any settlement obligations for all Market Transactions of the Market Participant, including those of the Client, and must settle as principal with the Clearing Facility or the relevant counter-party; or
  (ii) the Client owes obligations to the Clearing Participant in relation to the clearing and settlement of Cash Market Transactions;
  (iii) the Clearing Participant has rights against the Client in the event that:
  (A) the Client fails to pay the amounts due in respect of Cash Market Transactions; or
  (B) the Client fails to fulfil its settlement obligations in respect of Cash Market Transactions,
statements to that effect.

(3) The Market Participant is not required to comply with subrule (1) in relation to the Client where, at the time the obligation to comply with subrule (1) would arise, all of the following are satisfied:

(b) the Market Participant has given the Client a document that complies with ASX Market Integrity Rule 3.1.4 with respect to the clearing arrangements in place for transactions in Equity Market Products on the ASX Market;
(c) the Market Participant proposes to rely on the clearing arrangements disclosed in the document referred to in paragraph (b) for the purposes of clearing the Client’s transactions in Equity Market Products on the Chi-X Market;
(d) the Market Participant notifies the Client in writing of any material change to the clearing arrangements referred to in paragraph (b), including, without limitation, any changes to the matters referred to in paragraphs (2)(a) and (b); and
(e) the Market Transaction is a Market Transaction in a Cash Market Product.

Note: there is no Rule 3.1.5, 3.1.6, or 3.1.7

3.1.8 Client Agreement for Investment Products (Warrants)

(1) Before entering into a Market Transaction in respect of Investment Products (Warrants) on behalf of a Retail Client (the “Client”), subject to subrule (3), the Market Participant must enter into a written agreement with the Client under which the Market Participant discloses, and the Client acknowledges that they are aware that:

(a) an Investment Product (Warrant) has a limited life and cannot be traded after its expiry date;
(b) Investment Products (Warrants) do not have standardised Terms of Issue and it is the responsibility of the Client to become aware of the Terms of Issue of any Investment Product (Warrant) in which the Client chooses to invest; and
(c) Investment Products (Warrants) may be subject to adjustments after their initial issue and it is the Client’s responsibility to become aware of any adjustments which may have been made to any Investment Product (Warrant) in which the Client chooses to invest.
(2) The written agreement referred to in subrule (1) must include an acknowledgement from the Client that the Client has received and read a copy of any current explanatory booklet issued by the Market Operator in respect of Investment Products (Warrants).
(3) A Market Participant is not required to enter into an agreement under subrule (1) before entering into a Market Transaction to sell Investment Products (Warrants).
(4) A Market Participant is not required to comply with subrules (1) and (2) if the Market Participant is an ASX Participant and the Market Participant has a written agreement with the Client under Rule 3.1.8 of the ASX Market Integrity Rules.

Note: Subrule (4) does not affect a Market Participant’s obligation to give a Client a copy of an explanatory booklet under Rule 3.1.2.

3.1.9 Client Agreement for Partly Paid Securities

(1) Before entering into a Market Transaction in respect of Partly Paid Securities on behalf of a Retail Client (the “Client”), subject to subrule(2), the Market Participant must enter into a written agreement with the Client under which the Market Participant discloses, and the Client acknowledges that they are aware, that:

(a) a Partly Paid Security is a security which may require the Client to make a further payment or payments at some time in the future;
(b) it is the responsibility of the Client to obtain and read a copy of the prospectus, product disclosure statement or information memorandum issued by an Issuer which sets out the particular features of, and rights and obligations attaching to, a Partly Paid Security before the Client places an order to buy a Partly Paid Security;
(c) the Client may be required to make further payments on a Partly Paid Security and that a failure to make a further payment by the specified date(s) may result in an Issuer of a Partly Paid Security or their associates or agents taking action, including legal action, against the Client to recover the outstanding payments and/or may result in the forfeiture of the Client’s entitlement to the Partly Paid Security;
(d) in certain circumstances the Client may be required to make a further payment on a Partly Paid Security despite the fact that the Client may have disposed of a Partly Paid Security prior to the date that a further payment falls due;
(e) the Client should monitor announcements made by the Issuer of a Partly Paid Security and that it is the responsibility of the Client to inform themselves of the dates or circumstances that a further payment falls due and the last day that the Client can dispose of the Partly Paid Security before the Client becomes required to make a further payment; and
(f) the amount of a further payment may be unrelated to the financial performance of a Partly Paid Security and that the amount of the further payment may exceed the intrinsic value of a Partly Paid Security at the time a further payment falls due.

(2) A Market Participant is not required to enter into an agreement under subrule (1) before entering into a Market Transaction to sell Partly Paid Securities.

3.1.10 Other terms of Client Agreement

For the avoidance of doubt, the agreement referred to in Rule 3.1.9 may include other disclosures, acknowledgements, terms and conditions agreed between the Market Participant and the Client, or required to be included under the Market Operating Rules, provided they are not inconsistent with the requirements of Rules 3.18 and 3.1.9.

3.1.11 Market Participant to keep copy of Client Agreement and disclosures

The Market Participant must retain a copy of each agreement entered into under Rule 3.1.9 and any disclosures made under this Part for at least 7 years following the date on which the agreement, or the arrangement the subject of the disclosure, is terminated.

Part 3.2 Trading as Principal

3.2.1 Application

This Part 3.2 applies where a Market Participant enters into a Market Transaction with a Client as Principal, except where the Client is a Market Participant or a participant or member of a Recognised Stock Exchange.

3.2.2 Disclosure and consent

Before entering into a Market Transaction as Principal with a person (the “Client”), the Market Participant must disclose, or have previously disclosed, in accordance with paragraph 991E(1)(c) of the Corporations Act, that it is acting, or may act, as Principal and have obtained the consent of the Client, in accordance with paragraph 991E(1)(d) of the Corporations Act.

3.2.3 Confirmation must include disclosure

When a Market Participant enters into a Market Transaction with a person (the “Client”) as Principal, the confirmation issued by the Market Participant to the Client under Rule 3.4.1 in respect of that Market Transaction must state that the Market Participant entered into the transaction as Principal and not as agent.

3.2.4 Brokerage and commission

(1) When a Market Participant enters into a Market Transaction as Principal with a person (the “Client”), the Market Participant must not charge the Client brokerage, commission or any other fee in respect of the Market Transaction, except in the following circumstances:

(a) where the Client is a Prescribed Person of the Market Participant;
(b) where the Client is a Wholesale Client who has consented to the Market Participant charging brokerage, commission or the other fee (and that consent has not been withdrawn); or
(c) where otherwise permitted by the Corporations Act.

(2) The Market Participant must keep a written record of any consent given by a Wholesale Client under paragraph (1)(b), and send a copy of the record to that Wholesale Client as soon as practicable.

3.2.5 Extended meaning of dealing as Principal

(1) Except where a Market Participant is dealing as a trustee of a trust in which the Market Participant has no direct or indirect beneficial interest, a reference in this Part 3.2 to a Market Participant dealing or entering into a Market Transaction as Principal, includes a reference to a Market Participant entering into a Market Transaction on its own behalf or on behalf of any of the following persons:

(a) a partner of the Market Participant;
(b) a director, company secretary or Substantial Holder of the Market Participant;
(c) the Immediate Family, Family Company or Family Trust of a partner, director, company secretary or Substantial Holder of the Market Participant;
(d) a body corporate in which the interests of one or more of the partners singly or together constitute a controlling interest; and
(e) any Related Body Corporate of the Market Participant, except where that Related Body Corporate is dealing as a trustee of a trust in which it, or the Market Participant, has no direct or indirect beneficial interest.

(2) Without limitation, in paragraph (1)(b), a reference to dealing on behalf of a Substantial Holder means that any Cash Market Product the subject of the Market Transaction is, or will be on the execution of the transaction, beneficially owned by the Substantial Holders.

(3) For the purposes of subrule (2), Cash Market Products beneficially owned by a Substantial Holder include Cash Market Products that appear or would appear as assets on the balance sheet or consolidated balance sheet of that Substantial Holder’s assets and liabilities, except where the Cash Market Products concerned appear or would appear as assets on the balance sheet or consolidated balance sheet of a life insurance company registered under the Life Insurance Act 1995 or the equivalent Act of a State, and are held for or on behalf of that life insurance company’s statutory funds.

3.2.6 Register of persons who are regarding as Principal

A Market Participant must keep a register of the persons referred to in paragraphs 3.2.5(1)(a) to (e).

Part 3.3 Client instructions

3.3.1 Market Participant restrictions

A Market Participant must not:

(a) accept or execute instructions from a person (a “Client”) to enter into a Market Transaction except in accordance with these Rules, the Competition Market Integrity Rules and the Market Operating Rules;
(b) enter into a Market Transaction for a Client, except in accordance with the instructions of the Client, or of a person authorised in writing by a Client to give such instructions, or pursuant to an exercise of discretion in respect of that particular Client’s Managed Discretionary Account or as otherwise permitted by these Rules or the Market Operating Rules;
(c) allocate a Market Transaction to a Client’s account unless the Market Transaction was entered into on the instructions of the Client, or of a person authorised in writing by a Client to give such instructions, or pursuant to an exercise of discretion in respect of that particular Client’s Managed Discretionary Account or as otherwise permitted by these Rules or the Market Operating Rules; or
(d) except as permitted under these Rules, the Competition Market Integrity Rules or the Market Operating Rules, or in writing by ASIC, enter into or arrange a Market Transaction on the instructions of a Client unless the instructions are executed in such a manner that the Market Transaction is entered into on a Trading Platform.

3.3.2 Excessive trading

A Market Participant must not enter into Market Transactions on a Managed Discretionary Account for a Retail Client where the size or frequency of the Market Transactions may be considered excessive having regard to the investment objectives, financial situation and needs of the client and the relevant markets.

Part 3.4 Reporting to Clients

3.4.1 Confirmations—Form and timing

(1) Subject to Rule 3.4.3, a Market Participant must give a confirmation to a person (the “Client”) in respect of each Market Transaction entered into on the Client’s instructions or on the Client’s Managed Discretionary Account.

(2) The Market Participant must send to, or cause to be sent to, the Client a confirmation:

(a) in writing;
(b) electronically; or
(c) in another form permitted by ASIC,

as soon as practicable after the Market Participant enters into the Market Transaction.

(3) The confirmation must meet the following requirements:

(a) the confirmation must include all of the information required to be included in a confirmation under Division 3 of Part 7.9 of the Corporations Act;
(b) the confirmation must include a statement that the confirmation is issued subject to:
  (i) the directions, decisions and requirements of the Market Operator, these Rules, the Market Operating Rules, the Clearing Rules and where relevant, the Settlement Rules;
  (ii) the customs and usages of the Chi-X Market; and
  (iii) the correction of errors and omissions,

unless the Market Participant has obtained and retained an acknowledgment from the Client that the conditions set out in subparagraphs (i), (ii) and (iii) apply to the issue of confirmations to that Client;

(c) if the Market Transaction is to be cleared by another party which is a Clearing Participant, the confirmation must include the name of the Market Participant which executed the trade and the Clearing Participant which clears it;
(d) the confirmation must state the time by which all documents and information which the Market Participant or Clearing Participant will require to settle the Market Transaction must be provided by the Client:
  (i) in the case of a sale of Cash Market Products, the date by which the Client must provide all documents and security holder information (including, if applicable, the relevant holder identification number or personal identification number and/or shareholder reference number) required by the relevant Clearing Participant to meet its Clearing Obligations; and
  (ii) if applicable, the date by which the Client must provide the consideration specified in the confirmation; and
  (iii) if applicable, the date by which the net consideration to the Client falls due;
(e) the confirmation must state the amount of money which the Client must pay, or which the Client will receive, on settlement of the Market Transaction and, if the Client is required to pay an amount of money, the time by which that money must be paid;
(f) where the Market Transaction involved a Crossing, the confirmation must include a statement to that effect;
(g) the confirmation must include any disclosure required under Rule 3.2.3; and
(h) if the confirmation is a confirmation in respect of a Conditional Sale of a Cash Market Product and the corresponding confirmation in respect of the conditional purchase of the relevant Cash Market Product, the confirmation must be endorsed as conditional and state the condition and the effect of non-fulfilment of the condition.

3.4.2 Confirmations—accumulation and price averaging

If a Market Participant is required by Rule 3.4.1 to give a confirmation to a person (the “Client”) and the Market Participant enters into multiple Market Transactions for the purpose of completing the Client’s order, the Market Participant may accumulate those Market Transactions on a single confirmation and specify the volume weighted average price for those Market Transactions provided that:

(a) the Client authorised in writing the accumulation and price averaging of 2 or more Market Transactions in a confirmation at or before the time the order was placed; and
(b) if requested by the Client, the Market Participant gives to the Client a statement of all the individual prices of the Cash Market Products, as applicable, which are accumulated and averaged under this Rule.

3.4.3 Confirmations—clients other than Retail Clients

(1) A Market Participant is not required to comply with Rule 3.4.1 in respect of a client that is not a Retail Client, provided the Market Participant:

has notified the client before entering a Trading Message on the client’s behalf that Market Transactions effected for the client are subject to:

  (i) the directions, decisions and requirements of the Market Operator, these Rules, the Market Operating Rules, the Clearing Rules and where relevant, the Settlement Rules;
  (ii) the customs and usages of the Chi-X Market; and
  (iii) the correction of errors and omissions; and
(b) subject to subrule (2), notifies the client as soon as practicable:
  (i) if the Market Participant entered into the client’s Market Transaction as Principal that the Market Participant entered into the Market Transaction as Principal and
  (ii) if the client’s Market Transaction was executed as a Crossing, the execution code of the execution venue for the Crossing.

(2) A Market Participant does not have to give the notifications in paragraph (1)(b) to a client who has agreed not to receive such notifications.

(3)A Market Participant must keep a record of the notification referred to in paragraph (1)(a).

(4) ASIC may determine and publish on its website a notification of the execution venue codes referred to in subparagraph (1)(b)(ii).

(5) A Market Participant is not required to comply with paragraph (1)(b) until 28 October 2014.

Part 3.5 Client Money and Property

3.5.1 Trust accounts Cash Market Transactions

A Market Participant must establish one or more clients’ trust accounts for money received by the Market Participant in connection with dealings in Cash Market Transactions.

3.5.3 Bank accounts to be with Australian ADI

All money received by a Market Participant which the Corporations Act requires the Market Participant to deposit in a clients’ segregated account or in a clients’ trust account must be deposited in an account with an Australian ADI in Australia (which has been rated by an Approved Ratings Agency as being at least short term investment grade) unless:

(a) the money is received by the Market Participant in another country and the Market Participant deposits the money in a clients’ segregated account or clients’ trust account with a branch of an Australian ADI with such a rating in that country; or
(b) Rule 3.5.4 applies.

3.5.4 Approved foreign banks

(1) ASIC may approve, in writing, foreign banks at which Market Participants may:

(a) open clients’ segregated accounts or clients’ trust accounts for the handling of money received for a person in another country or for a person who is resident in another country; and
(b) invest money held in clients’ segregated accounts or clients’ trust accounts in another country.

(2) ASIC may impose conditions on the use of a foreign bank approved under subrule (1) for clients’ segregated accounts and clients’ trust accounts.

3.5.5 Change of rating or approval of ADI

If the Market Participant has a clients’ segregated account or a clients’ trust account with an Australian ADI which ceases to have the rating referred to in Rule 3.5.3 or with a foreign bank which ceases to be a bank approved under Rule 3.5.4, the Market Participant must transfer the balance of the relevant account to an entity which meets the requirements of Rule 3.5.3 or Rule 3.5.4, as applicable.

3.5.9 Reconciliation of trust accounts

(1) A Market Participant must perform a reconciliation of:

(a) the aggregate balance held by it at the close of business on each Business Day in clients’ trust accounts maintained pursuant to Rule 3.5.1 and the corresponding balance as recorded in the Market Participant’s accounting records; and
(b) the balance held by it at the close of business on the last Business Day of each week on trust for each person on whose behalf money is held in a trust account maintained pursuant to Rule 3.5.1 and the corresponding balance as recorded in the Market Participant’s accounting records,

that:

is accurate in all respects; and

(d) contains a statement signed by a Responsible Executive or a person authorised in writing by a Responsible Executive, stating that the signatory believes, and has no reason not to believe, that the reconciliation is accurate in all respects.

(2) The Market Participant must perform the reconciliation referred to in subrule (1) by 7.00 pm on the Trading Day after the Trading Day to which the reconciliation relates.

3.5.10 Obligation to notify ASIC in respect of reconciliation

A Market Participant must notify ASIC, in writing, within 2 Business Days if:

(a) a reconciliation has not been performed in accordance with Rule 3.5.9; or
(b) according to a reconciliation performed pursuant to Rule 3.5.9, there is a deficiency of funds in its trust accounts (or, in respect of a reconciliation performed pursuant to paragraph 3.5.9(1)(b), a deficiency in respect of any particular person on whose behalf money is held in the trust account) or if it is unable to reconcile its trust accounts pursuant to Rule 3.5.9.

3.5.11 Schedule of trust amounts

Each Market Participant must by no later than 5 Business Days after 31 March, 30 June, 30 September and 31 December in each year cause to be prepared a schedule as at the above dates showing the respective amounts held in the Market Participant’s trust account on behalf of clients together with the names of the particular client in respect of each amount.

Part 3.6 Prohibition of advice to Client

3.6.1 Definition used in this Part 3.6

For the purposes of this Part 3.6, “Client” includes a shareholder in a company which constitutes the Market Participant.

3.6.2 Market Participant possesses information that is not generally available

Where as a result of its relationship to a Client, a Market Participant is in possession of information that is not generally available in relation to a Financial Product and which would be likely to materially affect the price of that Financial Product if the information was generally available, that Market Participant must not give any advice to any other Client of a nature that would damage the interest of either of those Clients.

3.6.3 Chinese Walls in place

For the purposes of Rule 3.6.2, a Market Participant is not regarded as having possession of information that is not generally available in relation to a Financial Product where:

(a) thatMarket Participant has in place arrangements whereby information known to persons included in one part of the business of the Market Participant is not available, directly or indirectly, to those involved in another part of the business of the Market Participant;
(b) it is accepted that in each of the parts of the business of the Market Participant so divided, decisions will be taken without reference to any interest which any other such part or any person in any other such part of the business of the Market Participant may have in the matter; and
(c) the person advising the Client is not in possession of that information.

3.6.4 Certain actions do not constitute giving advice

For the purposes of Rule 3.6.2, a Market Participant or an Employee or partner of a Market Participant advising a Client that the Market Participant is precluded from giving the Client advice will not be regarded as giving advice.

Chapter 4: Records Chapter 4: Records

Chapter 4: Records

Part 4.1 Trading records

4.1.1 Records of dealings for clients

(1) This Rule applies to a Market Participant who receives instructions to enter into a Market Transaction on behalf of a person (the “Client”), whether or not a Trading Message corresponding to those instructions is entered into or matched on a Trading Platform.

(2) Subject to Rule 4.1.7, in addition to complying with the requirements of the Corporations Act to the extent that those requirements apply to dealing in the Chi-X Market, the Market Participant must maintain sufficiently detailed records showing:

(a) particulars of the instructions, including, without limitation:
  (i) the Financial Product to be bought or sold;
  (ii) the number thereof;
  (iii) any price or time related instructions;
  (iv) any time limit on the instructions;
  (v) the date and time the Market Participant received the instructions;
  (vi) instructions or decisions to purchase or sell Financial Products pursuant to a Managed Discretionary Account (including, without limitation, the Financial Products to be bought or sold and the number thereof, any price or time related instructions or decisions and the name of the person who generated the instruction or made the decision), whether the instruction or decision was executed or not; and
  (vii) the authority of the Client, if any, for accumulation and price averaging under Rule 3.4.2;
(b) the name of the Client;
(c) the name of the person who gave the instructions (or, if the Trading Message was received by Automated Order Processing, the information set out in Rule 5.5.3);
(d) any amendment of any kind to the instructions or Trading Message (including, without limitation, cancellation of an instruction or Trading Message, variation of the number of Financial Products to be bought or sold or variation of any price or time related instructions) including the date and time of any amendment to the instructions or Trading Message;
(e) the name of the person who received the instruction (or, if the Trading Message was received by Automated Order Processing, the information set out in Rule 5.5.3);
(f) the name of any other person who passed the instruction on between the person who initially received the instruction, and the Trading Platform and the date and time they passed it;
(g) the name of the DTR who entered a Trading Message into a Trading Platform (or, if the Trading Message was submitted by Automated Order Processing, the information set out in Rule 5.5.3);
(h) the time the DTR entered a Trading Message into a Trading Platform (or if the Trading Message was submitted by Automated Order Processing, the time at which the Trading Message was initiated by the Open Interface Device); and
(i) if the Trading Message gives rise to a Market Transaction, the date and time that occurs.

4.1.2 Records of dealings on Own Account

(1) This Rule applies to a Market Participant that makes a decision, or gives instructions to, enter into a Market Transaction on its Own Account, whether or not the Market Transaction is executed.

(2) Subject to Rule 4.1.8, the Market Participant must, in addition to complying with the requirements of the Corporations Act to the extent that those requirements apply to dealing in the Chi-X Market provided by the Market Operator, maintain sufficiently detailed records showing:

(a) particulars of the decision or instructions, including, without limitation:
  (i) the name of the person who generated the instruction or made the decision;
  (ii) the Financial Products to be bought or sold;
  (iii) the number thereof;
  (iv) any price or time related instructions or decisions; and
  (v) any time limit on the instruction;
(b) any amendment of any kind to the instructions or Trading Message (including, without limitation, cancellation of an instruction or Trading Message, variation of the number of Financial Products to be bought or sold or variation of any price or time related instructions), including the date and time of any amendment to the instruction or Trading Message;
(c) the name of any other person who passed the instruction on between the person who initially gave the instruction or made the decision, and a Trading Platform and the date and time they passed it;
(d) the name of the DTR who entered a Trading Message into a Trading Platform (or if the Trading Message was submitted by Automated Order Processing, the information set out in Rule 5.5.3);
(e) the time the DTR entered a Trading Message into a Trading Platform (or if the Trading Message was submitted by Automated Order Processing, the time at which the Trading Message was initiated by the Open Interface Device); and
(f) if the Trading Message gives rise to a Market Transaction, the date and time that occurs.

4.1.3 Records to be made immediately

A Market Participant must make the records referred to in Rules 4.1.1, 4.1.2, 4.1.7 and 4.1.8 immediately after the event to which they relate and record the time of the relevant event.

4.1.4 Records to be retained for prescribed period

A Market Participant must retain the records referred to in Rules 4.1.1, 4.1.2, 4.1.7 and 4.1.8 for 7 years from the date the record is made.

4.1.5 Certain records maintained by the Market Operator

Certain obligations of a Market Participant under Rules 4.1.1 and 4.1.2 may be met by relying on records maintained electronically as set out in Rule 4.1.6.

4.1.6 Conditions for reliance on the Market Operator records

(1) Where the records of the Market Participant:

(a) are able to connect the DTR identifier with the particular DTR; and
(b) identify the person, or any other persons, receiving the instructions, generating an order or making a decision (if not the DTR) and a DTR is capable of being connected to a particular Trading Record or sequence of events,

a Market Participant may:

when dealing for clients satisfy certain of its obligations in relation to paragraphs 4.1.1(2)(g), 4.1.1(2)(h) and 4.1.1(2)(i); or

(d) when dealing on its Own Account, satisfy certain of its obligations in relation to subparagraphs 4.1.2(2)(a)(i) to (iv), paragraphs 4.1.2(2)(b), 4.1.2(2)(d), 4.1.2(2)(e) and 4.1.2(2)(f),

by relying on records maintained by the Market Operator, but only to the extent permitted by subrule (2).

(2) For the purposes of subrule (1), the Market Participant may satisfy the obligation specified in column 1 of the following table by relying on records maintained by the Market Operator in the circumstances specified in column 2 of the following table:

4.1.7 Records of dealings for clients by a Market Participant who instructs another Market Participant to execute the dealings

A Market Participant that instructs another Market Participant to enter into a Market Transaction on behalf of a person:

(a) need not comply with paragraphs 4.1.1(2)(e), (f), (g), (h), and (i) in respect of that instruction;
(b) must maintain sufficiently detailed records in respect of such instruction showing:
  (i) the name of the person who received the instructions;
  (ii) the name of any person who passed the instruction on between the person who initially received the instruction and the person instructing the Market Participant to enter into the Market Transaction;
  (iii) the name of the person who instructed such Market Participant to enter into the Market Transaction; and
  (iv) the time the person instructed such Market Participant to enter into the Market Transaction.

4.1.8 Records of dealings on its Own Account by a Market Participant who instructs another Market Participant to execute the dealings

A Market Participant that instructs another Market Participant to enter into a Market Transaction on its behalf:

(a) need not comply with paragraphs 4.1.2(2)(c), (d), (e) and (f) in respect of that instruction; and
(b) must maintain sufficiently detailed records in respect of such instruction showing:
  (i) the name of any person who passed the instruction on between the person who initially gave the instruction or made the decision and the Market Participant instructed to enter into the Market Transaction;
  (ii) the name of the person who instructed such Market Participant to enter into the Market Transaction; and
  (iii) the time the person instructed such Market Participant to enter into the Market Transaction.

4.1.9 Records regarding Authorised Persons

A Market Participant must maintain records of:

(a) the name and contact details of an Authorised Person, and if that Authorised Person is an agent of another person, the details of that other person; and
(b) the security arrangements regarding access by the Authorised Person to a computer or other device connected to the Market Participant’s Open Interface Device and its location or if not fixed, the method of identifying the computer or other device,

for a period of 7 years from the date the person ceases to be an Authorised Person.

Part 4.2 Records—General

4.2.1 General record keeping requirements

(1) A Market Participant must maintain accurate records in sufficient detail to show particulars of:

(a) all money received or paid by the Market Participant, including trust account receipts and payments in a manner usual for a business of the kind being carried on by a Market Participant;
(b) all transactions by the Market Participant with or for the account of:
  (i) a person of a type described in Rule 5.4.1 or a Related Party;
  (ii) other Market Participants; and
  (iii) members of any overseas stock exchange;
(c) all income from commissions, interest and other sources and all expenses, commissions and interest paid;
(d) all assets and liabilities, including contingent liabilities of the Market Participant;
(e) all Cash Market Products which are the property of the Market Participant, showing by whom they, or the documents of title to them, are held and if held otherwise than by the Market Participant, whether they are held as security for loans or advances;
(f) all Cash Market Products which are not the property of the Market Participant but for which the Market Participant or any nominee controlled by it is accountable, showing by whom and for whom such Financial Products are held and:
  (i) in respect of those which are held for safe custody details sufficient to identify such Cash Market Products; and
  (ii) in respect of those which are held for any person or firm or corporation as security for loans or advances made by the Market Participant details sufficient to identify such Cash Market Products;
(g) all confirmations issued by the Market Participant and details of any statements and specifications which are required by these Rules, the Market Operating Rules and the Corporations Act to appear on confirmations; and
(h) all underwriting transactions entered into by the Market Participant.

(2) All Cash Market Products held for safe custody or whose certificates are held for safe custody must either be registered in the name of the client or the Market Participant’s nominee.

(3) The holding of Cash Market Products for security must be authorised in writing by the owner thereof or some other person lawfully authorised to do so.

(4) An authority referred to in subrule (3) must specify the period for which such Cash Market Products or documents of title may be held.

4.2.2 Client complaints—Records of complaints and correspondence

(1) A Market Participant must keep the following records of complaints received from clients:

a copy of all written complaints;
a copy of all written correspondence between the Market Participant and the clients and a written summary of any oral communication in connection with a written complaint; and
any correspondence or documents relating to the resolution of a complaint through any complaints resolution scheme.

(2) A Market Participant must keep the records referred to in subrule (1) in respect of a complaint for at least 5 years from the date of the last correspondence in respect of that complaint.

Part 4.3 Access to records

4.3.1 Records to be in writing and in English

(1) A Market Participant must keep all of the records it is required to maintain under this Chapter 4, in writing and in the English language or in a manner which will enable them to be readily accessible by ASIC and readily converted into writing in the English language.

(2) A Market Participant must, if directed by ASIC in writing to do so, convert records maintained under this Chapter 4 into writing and into English.

(3) A Market Participant must comply with a direction given under subrule (2) by the time specified by ASIC when giving the direction.

4.3.2 Records kept outside of Australia

(1) If the records which a Market Participant is required to maintain under this Chapter 4 are kept outside Australia:

the Market Participant must send, or cause to be sent, to Australia records which will enable true and fair financial statements to be prepared; and
the Market Participant must, if directed by ASIC in writing to do so, produce any of its records in Australia.

(2) A Market Participant must comply with any direction given by ASIC under paragraph (1)(b) by the time specified by ASIC when giving the direction.

Chapter 5: Trading Chapter 5: Trading

Chapter 5: Trading

Part 5.1 Client order priority

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 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.

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 Act1995 (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.

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.

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;
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;
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;
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;
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 Cash Market Products that has not been entered in a Trading Platform does not use that information to the disadvantage of that client;
the Market Participant buys or sells for a Wholesale Client; and
allocation of Market Transactions occurs in accordance with Rule 5.1.5; and
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 Cash Market Products on the same terms, having regard to subrule (3), unless:

(a) the Cash Market Products are allocated to the client in accordance with paragraph 5.1.6(c); or
(b) the Cash Market 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 Cash Market 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).

5.1.5 Fairness and priority in allocation

A Market Participant must allocate Market Transactions fairly.

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.

5.1.7 Unexecuted order in Cash Market Products—Market Participant not to make Bids or Offers

If a Market Participant has or receives an Order to buy or sell a Cash Market Product underlying a Derivatives Market Contract in the Underlying Market which may materially affect:

(a) the market price of the Cash Market 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 Cash Market Product and other products,
the Market Participant must not make Bids or Offers to enter into an Options Market Transaction over that Cash Market Product as Principal until the order in the Cash Market Product has been executed in the Underlying Market.

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).

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).

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 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.

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.

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 Chi-X 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.

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:

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;
the order that corresponds to a Trading Message;
the identity and capacity of the person placing the order that corresponds to the Trading Message;
whether the Trading Message was the result of Automated Order Processing;
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;
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
whether the Trading Message was submitted on the Market Participant’s Own Account or for a client.

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.

Part 5.6 Automated Order Processing—Filters, conduct, and infrastructure

5.6.1 Responsible use of system for Automated Order Processing

(1) 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 Chi-X Market;
  (ii) the proper functioning of any Trading Platform; or
  (iii) the efficiency and integrity of any Crossing System operated by the Market Participant.

(2) A Market 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 Market Participant under subparagraph (1)(b)(iii) until six months have passed from the commencement of subparagraph (1)(b)(iii).

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.

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 Chi-X 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 Chi-X Market or the proper functioning of the Trading Platform;
(d) 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 Cash Market Products; and
(e) controls that enable immediate:
  (i) suspension of, limitation of, or prohibition on, the entry into the 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 Chi-X Market and have interfered with or are likely to interfere with the efficiency or integrity of the Chi-X Market;
  (ii) cancellation of Trading Messages in a series that have already entered the Chi-X 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 Market Participant of Orders in a series of related Orders where the Market Participant has identified that Orders in the series have entered the Crossing System operated by the Market 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 Market Participant where the entry of further Orders in the series has been suspended, limited or prohibited under subparagraph (iii).

(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.

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 (Chi-X Australia Market) Amendment 2012 (No. 3) from the day that was 18 months after the day on which that instrument was registered under the Legislative Instruments Act 2003. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.4 did not need to comply with this Rule 5.6.4.

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:

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;
include the name of the person making the representation;
be signed and dated by the person making the representation; and
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 (Chi-X Australia Market) Amendment 2012 (No. 3) from the day that was 18 months after the day on which that instrument was registered under the Legislative Instruments Act 2003. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.5 did not need to comply with this Rule 5.6.5.

5.6.6 Certification of Automated Order Processing system

(1) Before using their system for Automated Order Processing, a Market Participant must:

give a written certification (“AOP Initial Certification”) to ASIC that includes the matters set out in subrule (2); and
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 (Chi-X Australia Market) Amendment 2012 (No. 3) from the day that was 18 months after the day on which that instrument was registered under the Legislative Instruments Act 2003. Rule 5.6.6A stated that Market Participants who complied with ASX Market Integrity Rule 5.6.6 did not need to comply with this Rule 5.6.6.

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.

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.

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:

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.

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.

5.6.12 Limitations on Automated Order Processing

(1) This Rule applies where ASIC reasonably considers that:

A Market Participant is not complying with the Automated Order Processing Requirements; or
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 Cash Market Products,
as required by the direction.

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 Cash Market Products:

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 Cash Market Product or with respect to the market for, or the price of, any Cash Market 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 Cash Market Product or with respect to the market for, or the price of, any Cash Market Product.

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 Cash Market Product;
whether the Order or execution of the Order would materially alter the market for, or the price of, the Cash Market Product;
the time the Order is entered or any instructions concerning the time of entry of the Order;
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 Cash Market Product or with respect to the market for, or the price of, any Cash Market Product;
whether the Order is accompanied by settlement, delivery or security arrangements which are unusual;
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;
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 Cash Market Product;
whether the transaction, bid or offer the execution of which is proposed will involve no change of beneficial ownership;
the frequency with which Orders are placed by a person;
the volume of Cash Market Products the subject of each Order placed by a person; and
the extent to which a person amends or cancels an instruction to purchase or sell a Cash Market Product relative to the number of Market Transactions executed for that person.

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.

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 Cash Market Product not being both fair and orderly, or fail to do anything where that failure has that effect.

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 the beginning of the Continuous Trading Period until the end of the Post-Trading Administration Period unless otherwise determined in writing by ASIC and notified to the Market Participant.

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.

Part 5.10 Dealing in Equity Market Products

5.10.1 Market Participants may not deal in Equity Market 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 Equity Market Products (except Loan Securities):

made for the purpose of qualifying a company for admission to the Official List; or
for which Official Quotation will be sought,

until those Equity Market Products have been granted Official Quotation.

5.10.2 When Market Participants may deal in Equity 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 Market Participant may deal in Equity Market 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 Equity Market Products;
(b) a Market Participant may dispose of Equity Market Products if those Equity Market Products comprise an underwriting or sub-underwriting shortfall;
(c) where the Equity 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 Equity Market Products (except Loan Securities) to the vendor and the Market Participant:
  (i) has made a prior firm arrangement with the vendor to place these Equity Market Products as soon as they are issued; and
  (ii) ensures that the details of the issue to the vendor are advised to the ASX Market by the listed entity immediately the Equity Market Products are issued;
(e) where a Market Participant:
  (i) makes a placement of new Equity Market Products (except Loan Securities) for which Official Quotation will be sought, and the Market Participant ensures that all investors accepting the Equity Market Products are informed in writing that Market Participants cannot deal in the Equity Market Products either as Principal or agent until Official Quotation is granted in respect of those Equity Market Products;
  (ii) accepts selling orders in Equity Market Products (except Loan Securities) for which Official Quotation will be sought, and the Market Participant takes all reasonable steps to ensure that the Equity Market Products are not sold before the Equity Market Products have been granted Official Quotation; or
  (iii) accepts selling orders in Equity Market Products (except Loan Securities) where the Equity Market Products are of the same class as Equity Market Products which have already been granted Official Quotation and:
  (A) the Equity Market Products have already been issued by the Issuer; and
  (B) the fact that the Equity Market Products have been issued has been notified to, and released to the ASX Market by, the Company 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 ASX 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 Chi-X Market in accordance with these Rules and the Market Operating Rules;
  (iv) there is an arrangement between the Issuer and ASX 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 ASX on the basis required by ASX.

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 ASX Market of the details of the issue.

5.10.4 Dealings in Cash Market Products suspended from Official Quotation

A Market Participant must not deal in Cash Market Products which have been suspended from quotation or trading unless the Cash Market Product is quoted on another Equity Market and is not in a Trading Suspension on that Equity Market.

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 Equity Market Products as underwriter or sub-underwriter must not offer such Equity Market Products to clients unless:

(a) they first inform the clients concerned of the closing date of the issue or offering of the Equity 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.

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 Cash Market Products, the Market Participant must not cover that charge by an increase or reduction in the price of the Cash Market Products.

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.

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) a person (“the Insider”) has placed an order into or entered into a transaction on the Chi-X 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 Chi-X 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 Chi-X Market;
  (iii) creating, or causing the creation of, a false or misleading appearance of active trading in financial products on the Chi-X 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 Chi-X 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 or 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.

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.

Chapter 6: Takeovers Chapter 6: Takeovers

Chapter 6: Takeovers

Part 6.1 Market Bid—Announcements by Market Participant

6.1.1 Announcement of Market Bid

(1) A Market Participant acting on behalf of a Bidder in relation to a Market Bid must ensure that the bid has been announced to the Relevant Financial Market in accordance with subrule (2).

(2) For the purposes of subrule (1), the announcement must include the following information:

a description of the Bid Class of Equity Market Products in the Target and the total number of Equity Market Products in that Bid Class;
the price offered for Equity Market Products in the Bid Class;
the date of the commencement and conclusion of the Offer Period;
the number of Equity Market Products in the Bid Class that the Bidder had a relevant interest in immediately prior to the announcement (expressed as a percentage of the total number of Equity Market Products in the Bid Class); and
a statement:

  (i) as to whether the Bidder will buy Equity Market Products in the Bid Class On-Market before the Offer Period commences and, if so, the maximum number of those Equity Market Products to be bought and the price that will be paid;
  (ii) that the Market Bid is an offer to buy all the Equity Market Products in the Bid Class that exist or will exist at any time during the Offer Period for the price offered; and
  (iii) that the Offer Period may be extended and the offer price may be increased in accordance with the Corporations Act.

6.1.2 Announcement of variations to Market Bid

A Market Participant acting on behalf of a Bidder in relation to a Market Bid must ensure that the following is announced to the Relevant Financial Market, in writing:

(a) an increase to the price offered for Equity Market Products in the Bid Class;
(b) an extension to the Offer Period;
(c) a withdrawal of the Market Bid;
(d) any other variation to the Market Bid in accordance with the Corporations Act; or
(e) if the Market Participant ceases to act on behalf of the Bidder.

Part 6.2 Acquisition of Equity Market Products during the Bid Period

6.2.1 Acquisition of Equity Market Products by Bidder

(1) This rule applies to both Market Bids and Off-Market Bids.

(2) A Market Participant acting on behalf of a Bidder must not offer to buy on behalf of the Bidder Equity Market Products in the Bid Class On-Market during the Bid Period for a price that varies from the consideration offered under the Takeover Bid unless and until an announcement has been made to the Relevant Financial Market.

(3) For the purposes of subrule (2), the announcement must be made in writing, by facsimile or electronic delivery to the operator of the Relevant Financial Market.

6.2.2 Acquisition of Equity Market Products by another Bidder

(1) Where Equity Market Products are subject to a Market Bid, a Market Participant acting on behalf of another Bidder, must not buy the Equity Market Products in the Bid Class of the Target on behalf of that Bidder unless and until:

(a) a Market Bid on behalf of the person pursuant to Rule 6.1.1; or
(b) an increase in the price offered under a Market Bid for the Equity Market Products pursuant to Rule 6.1.2,

has been announced to the Relevant Financial Market in accordance with subrule (2).

(2) For the purposes of subrule (1), the announcement must be made in writing, by facsimile or electronic delivery to the operator of the Relevant Financial Market.

Part 6.3 Market Participant acting for Bidder or Issuer

6.3.1 Market Participant to advise seller if acting for Bidder or Issuer

Where a Market Participant:

has an order from the Bidder in relation to an Off-Market Bid;
has made an announcement to the Relevant Financial Market on behalf of a Bidder to acquire Equity Market Products under a Market Bid; or
acts for a company involved in a buy-back under Chapter 2J of the Corporations Act conducted on a Relevant Financial Market,

the Market Participant must not accept, or transact, an order to sell Equity Market Products in the Bid Class referred to in paragraph (a) or subject to the announcement referred to in paragraph (b) or subject to the buy-back referred to in paragraph (c) unless the Market Participant:

advises the seller that it is acting for the Bidder or that it is acting for the company involved in the buy-back and is thus unable to give the seller advice in respect of the proposed sale; and

(e) does not give the seller any advice in respect of the proposed sale.