The Australian Securities and Investments Commission (ASIC) issued a guideline on Tuesday, asking market operators and participants to continue to implement resilient measures to tackle equity market outages.
The regulator even wants market players to offer trading services on alternative markets during unforeseen circumstances. The goal is to offer trading services even during outages.
“While progress has been reasonable given the industry is balancing other significant market system changes and volatile trading conditions, there is considerably more to do,” said Commissioner of ASIC, Danielle Press.
Additionally, the financial market regulator released a consultation paper earlier to clarify how the market participants could respond during an outage.
Valid Concerns of Outages
The Aussie watchdog is keen on tacking market outages after the Australian Securities Exchange (ASX) went down in November 2020 following a major technical upgrade. An independent investigation later found that the ASX Trade system was ‘not ready to go live’. It led to the imposition of additional license conditions on the stock exchange.
The latest concerns of market outage came with several upcoming important upgrades, including the replacement of CHESS, technology upgrade of Cboe, and the implementation of new market integrity rules. ASIC has been delaying the roll-out of its blockchain -based CHESS replacement for years now, while Cboe plans to implement its new technology in February 2023.
ASIC is now asking market layers to implement all these upgrades in a ‘reasonable timeframe’.
“By early to mid-2023, we anticipate that all market participants will have arrangements for at least new orders to trade on an alternative market during an outage, and that market operators will support this outcome,” Press added.
Meanwhile, ASIC is prioritizing the security of all regulated market players. Though the Australia Financial Services (AFS) incense does not have any specific requirements for cybersecurity measures, the regulator expects ‘licensees to address cyber risk’.
