Sharemarket regulation revamp passes Senate

The Age

Saturday March 13, 2010

By LUCY BATTERSBY

THE timetable for the securities regulator taking over market supervision in Australia is running to schedule, with the passage of legislation through Federal Parliament.The Corporations Amendment (Financial Market Supervision) Bill passed the Senate on Thursday and is expected to allow the Australian Securities and Investments Commission to take over market supervision between July and September.Senator Mitch Fifield said the broking industry had urged Parliament to pass a law to "generate incentives for financial market operators to innovate and become more competitive".ASIC has already received three applications for a licence to operate a market in Australia, from Chi-X (owned by Instinet), Liquidnet and AXE, but has not yet granted any new licences.Under the new laws, brokers will be able to trade financial products on a range of markets, not just the Australian Securities Exchange (ASX), and all markets will be regulated by ASIC.Once a company is listed, its shares can be traded on any of the markets regulated by ASIC.Multiple markets have been operating in Europe, Asia and the US for many years. However, the alternative markets are less well known because index makers still quote closing prices from the original markets, according to chief operating officer of Instinet, John Fildes.Mr Fildes said the biggest change for traders would be that brokers would be able to search multiple markets to find the best sale and execution prices."Everybody should get a better price for their trade because there will be more competition," he said. "This is good for everybody in Australia because it means that superannuation funds can transact more efficiently and at better prices."Brokers were also keen for ASIC to take over as they "have had difficulty with regulation by ASX", Mr Fildes added.The ASX has not outlined how the changes will affect its business, apart from saying 11 to 22 staff may move to ASIC's new market supervision area.

© 2010 The Age

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