ASIC makes this instrument under subsection 798G(1) of the Corporations Act.
1.1.2 Title
This instrument is ASIC Market Integrity Rules (Futures Markets) 2017.
1.1.4 Scope of these Rules
These Rules apply to:
(a) the activities or conduct of the Markets;
(b) the activities or conduct of persons in relation to the Markets; and
(c) the activities or conduct of persons in relation to financial products traded on the Markets,
as specified in each Chapter, Part or Rule.
1.1.5 Entities that must comply with these Rules
The following entities must comply with these Rules:
(a) Market operators;
(b) Market Participants; and
(c) Other Regulated Entities,
as specified in each Rule.
1.1.5A Penalties for a contravention of these Rules
The maximum pecuniary penalty payable for a contravention of a provision of these Rules is an amount determined by the Court under section 1317G of the Corporations Act.
1.1.6 Conduct by officers, Employees or agents
In these Rules, conduct engaged in on behalf of a person:
(a) by an officer, Employee, or other agent of the person, and whether or not within the scope of the actual or apparent authority of the officer, Employee, or other agent; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an officer, Employee, or other agent of the person, and whether or not the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the officer, Employee, or other agent,
is deemed to have been engaged in by the person.
1.1.7 State of mind of a person
(1) If for the purposes of these Rules in respect of conduct engaged in by a person, it is necessary to establish the state of mind of the person, it is sufficient to show that an officer, Employee, or other agent of the person, being an officer, Employee, or other agent by whom the conduct was engaged in and whether or not the conduct was within the scope of the actual or apparent authority of that officer, Employee, or other agent, had that state of mind.
(2) In subrule (1), a reference to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person’s reasons for the person’s intention, opinion, belief or purpose.
1.1.8 Application for review by Administrative Review Tribunal of certain decisions made under these Rules
(1) Subject to this Rule, applications may be made to the Tribunal for review of a decision made by ASIC under:
(a) subrule 1.2.1(1); or
(b) subrule 1.2.1(3); or
(c) paragraph 2.2.1(2)(b); or
(d) paragraph 2.4.1(2)(f); or
(e) subrule 4.1.1(1); or
(f) subparagraph 4.1.1(1)(g)(vi); or
(g) subrule 4.1.1(2); or
(h) rule 4.3.3; or
(i) subrule 8.1.1(3); or
(j) subrule 8.1.4(3).
(2) An application made under subrule (1) may only be made by:
(a) in relation to paragraphs (a) and (b);
(i) the Market Participant that made the application for a waiver of a Rule under Rule 1.2.1;
(b) in relation to paragraphs (c) and (d);
(i) the Market Participant in respect of which the decision by ASIC was made;
(c) in relation to paragraphs (e) to (j);
(i) the Market operator in respect of which the decision by ASIC was made.
(3) In this Rule:
decision and Tribunal have the same meaning as in the Administrative Review Tribunal Act 2024.
1.1.9 Notice of reviewable decision and review rights
(1) This Rule applies if ASIC makes a decision to which Rule 1.1.8 applies.
(2) ASIC must take such steps as are reasonable in the circumstances to give to each person who may make an application for review of the decision under Rule 1.1.8 notice, in writing or otherwise:
(a) of the making of the decision; and
(b) of the person’s right to have the decision reviewed by the Tribunal.
(3) A failure to comply with this Rule does not affect the validity of the decision.
Part 1.2 Waiver
1.2.1 Waiver of Rules
(1) Subject to Rule 1.2.3, ASIC may, by legislative instrument, relieve any person or class of persons from the obligation to comply with a provision of these Rules, either generally or in a particular case or category, and either unconditionally or subject to such conditions as ASIC thinks fit.
(2) If any conditions on a waiver given under subrule (1) are imposed, all of the conditions must be complied with for the waiver to be effective.
(3) ASIC may withdraw, by legislative instrument, a waiver given under subrule (1) at any time.
(4) Any request by a person for a waiver under subrule (1) must be in writing.
Note: Legislative instruments made under this rule are available on the Federal Register of Legislation. The register may be accessed at www.legislation.gov.au.
1.2.2 Compliance with conditions
Failure to comply with a condition imposed under Rule 1.2.1 is a contravention of this Rule.
1.2.3 Period during which relief applies
ASIC may specify the period or specific event during which any relief from an obligation to comply with a provision of these Rules may apply.
1.2.4 Register
(1) ASIC may establish and maintain a register for recording details of relief granted under Rule 1.2.1 and may enter the following details in the register:
(a) the date that the relief takes effect;
(b) the person or class of person relieved from the obligation;
(c) the provision to which the relief applies;
(d) brief reasons for the relief; and
(e) any conditions that apply to the relief.
(2) ASIC may publish the register referred to in subrule (1).
Part 1.3 Notice, notification and service of documents
1.3.1 Market Participant to have email system
A Market Participant must acquire and maintain an operating email system for the purposes of receiving notices under these Rules.
1.3.2 Methods of giving notice in writing
Unless otherwise specified in a Rule, ASIC may give notice under these Rules by any of the following methods:
(a) delivering it to the recipient personally;
(b) leaving it at or by sending it by courier or post to the address of the recipient last notified to ASIC;
(c) sending it by facsimile to the recipient’s facsimile number last notified to ASIC;
(d) a circular or bulletin addressed to a class of persons and delivered or communicated by any means permitted under this Rule;
(e) specific email by any method which identifies a person or person’s title as addressee and no notice of non-delivery has been received;
(f) broadcast email by any method which identifies the addressee and which, having regard to all the relevant circumstances at the time, was as reliable as appropriate for the purposes for which the information was communicated.
Part 1.4 Interpretation
1.4.1 References to time
In these Rules a reference to time is to the time in Sydney, Australia.
1.4.2 Words and expressions defined in the Corporations Act
Words and expressions defined in the Corporations Act will unless otherwise defined or specified in these Rules or the contrary intention appears, have the same meaning in these Rules.
1.4.3 Definitions
Anomalous Order means a:
(a) Buy Order for which the price is above the maximum Anomalous Order Threshold for the relevant Equity Index Future or ASX SPI 200 Future; and
(b) Sell Order for which the price is below the minimum Anomalous Order Threshold for the relevant Equity Index Future or ASX SPI 200 Future.
Anomalous Order Threshold means a threshold for an Equity Index Future or ASX SPI 200 Future determined under subrule 8.1.1(1).
Approved Foreign Bank has the meaning given by regulation 1.0.02 of the Corporations Regulations.
Approved Securities has the meaning given by:
(a) when used in Chapter 7, Rule 7.1.1; and
(b) otherwise, in relation to a Market, the operating rules of that Market.
ASIC means the Australian Securities and Investments Commission.
ASIC Act means the Australian Securities and Investments Commission Act 2001 (Cth).
ASX 24 means Australian Securities Exchange Limited (ACN 000 943 377).
ASX 24 Market means the financial market operated by ASX 24 under the Australian Market Licence (Australian Securities Exchange Limited) 2002.
ASX Market means the financial market operated by ASX Limited (ACN 008 624 691) under Australian Market Licence (ASX Limited) 2002.
ASX SPI 200 Future means the contract over the market index known as the S&P/ASX 200, that is generally known as the “ASX SPI 200 Future” and that is admitted to quotation on the ASX 24 Market.
ASX Trade24 means the Order Book operated by ASX 24 and generally known as “ASX Trade24”, that is the central Order Book of ASX 24 for ASX SPI 200 Futures.
Auction in Part 8.2 of these Rules, means:
(a) in relation to the ASX SPI 200 Future, an auction in the ASX SPI 200 Future on ASX Trade24; and
(b) in relation to Equity Index Futures, an auction in the Equity Index Future on the central Order Book of the Responsible Market Operator for Equity Index Futures.
Bid means, in relation to a financial product, a price and quantity of the financial product to be purchased.
Block Trade means any trade which is executed via the Block Trade Facility.
Block Trade Facility, in relation to a Market, has the meaning given by the operating rules of that Market.
Block Trade Order, in relation to a Market, means an Order in a Contract prescribed by the operator of that Market which must be executed via the Block Trade Facility.
Call means the demand for payment of a sum of money made upon a Client.
CHESS Depositary Interest has the meaning given to the term “CDI” by Rule 2.13.1 of the operating rules of ASX Settlement Pty Limited (ACN 008 504 532).
Chi-X Market means the financial market operated by Chi-X Australia Pty Ltd (ACN 129 584 667) under Australian Market Licence (Chi-X Australia Pty Ltd) 2011.
Clearing Participant means, when used in relation to a Market, a person admitted as a participant under the Clearing Rules.
Clearing Rules means, when used in relation to a Market, the operating rules of the clearing and settlement facility with which the Market operator has clearing and settlement arrangements for transactions effected through the Market.
Client means:
(a) in relation to a Market Participant, any person, partnership or corporation on behalf of whom the Market Participant enters, acquires or disposes of a Futures Market Contract or Option Contract, or on whose behalf the Market Participant proposes to enter, acquire or dispose of a Futures Market Contract or Option Contract or from whom the Market Participant accepts instructions to enter, acquire or dispose of Futures Market Contracts or Option Contracts;
(b) for the purposes of Rule 2.2.2, includes all persons, partnerships and corporations related to, associated with or affiliated with the Client or otherwise financially dependent upon the Client;
(c) for the purposes of Rule 2.2.6 and Part 2.3, excludes a related body corporate or a division of the Market Participant;
(d) for the purposes of Rules 2.2.7, 3.1.1(1), 3.1.13, 3.1.14, 3.1.16 and 3.1.17 and Part 3.3, in respect of a Market Participant which is a corporation, includes a related body corporate or a division of the Market Participant which is separate from the Market Participant’s futures division; and
(e) for the purposes of Rule 3.1.15, includes a related body corporate or a division of the Market Participant—which is separate from the Market Participant’s futures division.
Client Account means an account of a Client.
Client Order means an instruction, provided by a client to a Participant, to enter into a transaction or transactions.
Client Trade means a trade of a Market Participant held on behalf of a Client.
Close Out means to extinguish an Open Position by matching it with an offsetting Open Position and effecting the settlement of each such Open Position against the other.
Contract means a contract entered, acquired or disposed of on a Market or capable of being entered, acquired, or disposed of on a Market.
Controller means:
a person holding 20% or more of the total votes attached to voting shares of a Market Participant or a person who, together with Related Parties, holds 20% or more of such votes; or
(b) a person who has the power to control a Market Participant, whether that power is direct or indirect or is, or can be, exercised as a result of, by means of, in breach of, or by revocation of, trusts, relevant agreements and practices, or any of them, and whether or not they are enforceable.
Corporations Act means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations 2001 (Cth).
Cover means cash and/or Approved Securities as determined by a Market operator in relation to its Market, and held by a Market Participant against a Client’s liability from time to time.
Cross or Crossing, means a transaction in respect of which a Market Participant acts:
on behalf of both buying and selling clients to that transaction; or
(b) on behalf of a buying or selling client on one side of that transaction and as Principal on the other side.
Crossing System means any automated service provided by a Market Participant which matches or executes client Orders with Orders of:
the Market Participant;
(b) other clients of the Market Participant; or
(c) any other person whose Orders access the automated service;
otherwise than on an Order Book.
Crossing System Initial Report has the meaning given by Rule 5.1.1.
Crossing System Monthly Report has the meaning given by Rule 5.1.2.
Employee, in relation to a Market Participant, includes a director, employee, officer, agent, Representative, consultant or adviser of that Market Participant, or an independent contractor who acts for or by arrangement with a Market Participant.
Equity Index Future means a Futures Market Contract over a market index, where that market index is comprised of more than one Equity Market Product.
Equity Market Product means:
a share in a body;
(b) a financial product referred to in subparagraph 764A(1)(b)(i) or subparagraph 764A(1)(ba)(i) of the Corporations Act; or
(c) a right (whether existing or future and whether contingent or not) to acquire, by way of issue, the following under a rights issue:
a share covered by paragraph (a); or
(ii) a financial product covered by paragraph (b); or
(d) a CHESS Depositary Interest,
admitted to quotation on the ASX Market or admitted to quotation on the Chi-X Market under the Chi-X Market operating rules, but does not include a CGS Depository Interest.
Error Trade means a trade transacted in error.
ETR Event means when:
(a) an Order to buy an Equity Index Future or an ASX SPI 200 Future for which the Bid price is both above the Reference Price and in the Extreme Trade Range for the Equity Index Future or ASX SPI 200 Future (as applicable); or
(b) an Order to sell an Equity Index Future or an ASX SPI 200 Future, for which the Offer price is both below the Reference Price and in the Extreme Trade Range for the Equity Index Future or ASX SPI 200 Future (as applicable),
is received by a Market operator and is not prevented from entering the relevant Market by the controls the Market operator has in place to comply with Rule 8.1.3.
Note: Under Rule 8.2.2B, an ETR Event occurs on a Market in the circumstances described in this definition whether or not the Buy Order or Sell Order is executed, in whole or in part, on the Market.
Exchange For Physical means a transaction where:
(a) a bona fide physical transaction in a commodity or instrument is completed and physical delivery takes place at the time of the transaction or is intended by both parties to take place at a later time; and
(b) at or about the same time a Contract, opposite in effect, is entered, acquired or disposed of by a Market Participant or two Market Participants, for the same or similar quantity or amount of the commodity or a substantially similar commodity or instrument between Market Participants, on behalf of the parties to the physical transaction.
Expression of Interest means an enquiry made to a Market Participant either:
(a) to obtain the current best bid and/or offer in a particular Contract; or
(b) to enquire as to the volume that may be obtained at a given price,
but is not a firm Order to buy or sell.
Extreme Trade Range:
(a) in relation to ASX SPI 200 Futures, has the meaning given by subrule 8.2.1(1); and
(b) in relation to Equity Index Futures, has the meaning given by subrule 8.2.1(2).
Family Company means a corporation:
controlled by the person or the Immediate Family of the person; or
(b) in respect of which the person is beneficially entitled to more than 50% of the issued capital.
Family Trust means a trust in which:
the person or the Immediate Family of the person is the sole or majority beneficiary; or
(b) the person has the ability to remove the trustee of the trust and replace that trustee with his or her own nominee.
FEX means FEX Global Pty Ltd (ACN 124 127 224).
FEX Market means the market operated by FEX under Australian Market Licence (FEX Global Pty Ltd) 2013.
Futures Market Contract, in relation to a Market, has the meaning given by the operating rules of that Market.
House Account means any account other than a Client Account.
Immediate Family in relation to a person, means that person’s spouse and any non-adult children.
Initial Margin means the amount which a Market Participant requires to be paid by a Client in respect of a Futures Market Contract entered into or proposed to be entered into on behalf of a Client.
Invalid, in relation to a price established by an auction, or the price of a transaction, means:
(a) the price has resulted from an error;
(b) the price is materially different from the price of the last transaction in the same, Equity Index Future or ASX SPI 200 Future (as applicable) on the same Order Book, and the difference in price is not, in the opinion of the relevant Market operator, readily attributable to an announcement that has been made to that Market or some other event; or
(c) the price has resulted from a transaction that is otherwise required to be cancelled or amended by the operator of the Market on which the transaction is executed.
Margin means Initial Margin and Variation Margin.
Market means any of the following:
the ASX 24 Market;
the FEX Market.
Minimum Volume Threshold means the threshold determined by a Market operator under its operating rules, being the minimum number of lots in respect of each Contract.
Month means calendar month.
Non-Public Crossing System Information has the meaning given by subrule 5.2.2(5).
Offer means, in relation to a financial product, a price and quantity of the financial product to be sold.
Open Position An open position exists where the obligations under a Contract held by a party, which has not been closed out are yet to be performed and will refer as the context requires either to an open position as defined by the Clearing Rules of a Market, held by a Clearing Participant under the Clearing Rules for that Market, or to such an open position which is held by a Market Participant on the instructions of a client, including open positions held, where applicable on markets other than the Market.
Option or Option Contract means an option over:
(a) a Futures Market Contract or a number of Futures Market Contracts; or
(b) an option over an Underlying Physical,
as listed by a Market operator in relation to its Market.
Order means an instruction to enter into a Contract, or an instruction to amend or cancel a prior instruction to enter into a Contract.
Order Book means an electronic list of Orders maintained by or on behalf of a Market operator, on which those Orders are matched with other Orders in the same list.
Order System means a software application, satisfactory to a Market operator in relation to its Market, for entering Orders into the Trading Platform through a Terminal.
Other Regulated Entities means entities prescribed by regulations made for the purposes of paragraph 798H(1)(c) of the Corporations Act, that must comply with these Rules.
Participant means:
(a) in relation to a Market, a person who is allowed to directly participate in the market under the operating rules of the Market other than as a recognised affiliate; or
(b) in relation to a clearing and settlement facility, a person who is allowed to directly participate in the facility under the facility’s operating rules other than as a recognised affiliate.
Prescribed Person means, in relation to a Market Participant:
an Employee, a director, or a partner, of the Market Participant;
(b) a Controller of the Market Participant or a related body corporate of that Controller;
(c) the Immediate Family of a person referred to in paragraphs (a) or (b);
(d) a Family Company and a Family Trust of a person referred to in paragraphs (a) to (c); and
(e) where a Market Participant or a person referred to in paragraphs (a) to (d) is a body corporate, anybody corporate or other entity controlled by that body corporate.
Pre-Commencement Market Integrity Rules means:
the ASIC Market Integrity Rules (ASX 24 Market) 2010; and
(b) the ASIC Market Integrity Rules (FEX Market) 2013.
Pre-Opening Period, in relation to a Market, has the meaning given by the operating rules of that Market.
Pre-Opening Phase, in relation to a Market, has the meaning given by the operating rules of that Market.
Principal, when used in Chapter 5 in the context of a Market Participant trading on its own behalf “as Principal”, includes a reference to the Market Participant trading on its own behalf or on behalf of any of the following persons:
(a) a partner of the Market Participant;
(b) a director or company secretary of the Market Participant;
(c) a Substantial Holder of the Market Participant;
(d) the Immediate Family, Family Company or Family Trust of a partner, director, company secretary or Substantial Holder of the Market Participant;
(e) a body corporate in which the interests of one or more of the partners singly or together constitute a controlling interest of the Market Participant;
(f) any related body corporate of the Market Participant,
and does not include where the Market Participant or a related body corporate of the Market Participant is trading as a trustee of a trust in which that trustee has a beneficial interest in the trust of less than 5%, and all of that interest was acquired in lieu of receipt of fees for administering the trust.
Principal Trader, in relation to a Market, has the meaning given by the operating rules of that Market.
Publicly Available Crossing System Information has the meaning given by subrule 5.2.1(2).
Related Party:
in relation to a body corporate:
has the meaning given by section 228 of the Corporations Act; or
(ii) means a Substantial Holder of the body corporate;
(b) in relation to a trust, which is not a registered management investment scheme, means the management company, trustee and their related parties within the meaning of section 228 of the Corporations Act;
(c) in relation to a trust which is a registered managed investment scheme, means the responsible entity and a related party of the responsible entity under section 228 of the Corporations Act, as modified by section 601LA of the Corporations Act;
(d) in relation to a person, means:
his or her spouse, de facto spouse, parent, son, or daughter, or a spouse or de facto spouse of that person;
(ii) an entity over which one or more of the persons referred to in subparagraph (i) has control;
(iii) an entity that he or she controls, or its holding company or which is controlled by the holding company;
(iv) a person who acts, or proposes to act, in concert with anyone referred to above;
(v) a person who was a related party in the previous six months, or who would be a related party in the future, under the tests in section 228 of the Corporations Act (applied with any necessary adaptation).
Representative has the meaning given by section 910A of the Corporations Act.
Responsible Market Operator means:
(a) in relation to an Equity Index Future:
(i) if offers to acquire or dispose of the Equity Index Future are made or accepted on only one Market, the operator of that Market; or
(ii) if offers to acquire or dispose of the Equity Index Future are made or accepted on more than one Market, the Market operator determined by ASIC in writing; and
(b) in relation to ASX SPI 200 Futures, ASX 24.
Note: Instruments made under paragraph (a)(ii) are available on the Federal Register of Legislation. The register may be accessed at www.legislation.gov.au.
Roll Business means trading a position from the nearest delivery month to an equivalent position in a different delivery month.
Rules means these market integrity rules.
Strategy Trade, in relation to a Market, has the meaning given by the operating rules of that Market.
Substantial Holder when used in the definition of “Principal” in this Rule to refer to a Substantial Holder in a corporation, means a person who has or would have a substantial holding if Part 6C of the Corporations Act applied to that corporation.
Terminal means an automated Order entry interface through which an Order System routes Orders to the Trading Platform of a Market.
Trading Day for a Market means a day on which that Market is open for trading.
Trading Hours in relation to a Market, means the times during which:
Orders may be entered, amended or cancelled on the Order Books of that Market; and
(b) Orders are matched and transactions are executed on a continuous basis on that Market,
and includes a time during which an Auction is conducted on the Market.
Trading Messages means those messages submitted into a Trading Platform relating to trading functions, such as orders, amendment or cancellation of orders and the reporting or cancellation of Market transactions on the Trading Platform.
Trading Participant, in relation to a Market, has the meaning given by the operating rules of that Market.
Trading Pause means a period during which a Market operator must prevent Orders from being matched or executed on its Market, but during which Bids and Offers may be displayed, entered, amended and cancelled.
Trading Platform means a facility made available by a Market operator to Participants of that Market for the entry of Trading Messages, the matching of Orders, the advertisement of invitations to trade and the reporting of transactions.
Trading Reset, in relation to an Equity Index Future or ASX SPI 200 Future, means each of a Trading Pause, Trading Suspension, and the end of Trading Hours for the Equity Index Future or ASX SPI 200 Future.
Trading Suspension means a halt or suspension in trading on a Market pursuant to the exercise of a power by a Market operator under its operating rules during which Orders may not be matched or executed on the relevant Market, but does not include a halt or suspension caused by a technical problem (including a power outage) affecting the technical infrastructure used by the Market operator for the purposes of receiving Trading Messages, matching and executing Orders and reporting transactions.
Underlying Physical means the asset, instrument, index, reference rate or any other thing, excluding a Futures Market Contract, whose price movement determines the value of the Contract.
Variation Margin means the difference between the value of a Futures Market Contract or Option Contract as shown in the contract, and the value of that contract at any given time.
Part 1.5 Participants of multiple Markets
1.5.1 Participants may rely on notifications
Where these Rules require a Market Participant to give to ASIC any document (however described) in relation to the Market Participant in relation to a Market, the Market Participant may give to ASIC the same document in relation to more than one Market, provided that:
(a) the Market Participant has notified ASIC in writing that it intends to comply with these Rules by relying on that document, or on documents of that kind, in relation to each Market to which the document applies; and
(b) the document contains all of the information that would be required to be in the document if it were given separately in relation to each Market.
Part 1.6 Transitional
1.6.1 Status of notifications and certifications given by a Market Participant under the Pre-Commencement Market Integrity Rules
(1) This Rule applies if:
(a) a Market Participant gave ASIC a written notification or certification under the Pre-Commencement Market Integrity Rules; and
(b) the notification or certification has not been withdrawn or otherwise ceased to have effect; and
(c) the power or obligation in the Pre-Commencement Market Integrity Rules to give the notification or certification is incorporated under a corresponding provision in these Rules.
(1A) For the purposes of this Rule, a provision (old provision) of the Pre-Commencement Market Integrity Rules corresponds to a provision (new provision) of these Rules (and vice versa) if the old provision and the new provision are substantially the same.
(1B) For the purposes of subrule (1A), differences of all or any of the following kinds are not sufficient to mean that two provisions are not substantially the same:
(a) differences in the numbering of the provisions;
(b) differences of a minor technical nature (for example, differences in punctuation, or differences that are attributable to the correction of incorrect cross-references);
(c) the fact that one of the provisions refers to a corresponding previous law and the other does not;
(d) other differences that are attributable to the fact that these Rules apply to more than one Market.
(2) The notification or certification:
is taken to have been given to ASIC by the Market Participant under the corresponding provision in these Rules; and
will continue in its existing form, and continue to have the same effect under these Rules, as when given under the Pre-Commencement Market Integrity Rules.