.jpg)
This year’s ASIC assessment (just released) has concluded that ASX has adequate arrangements for supervision of its markets and has improved significantly in a number of areas. It made very few suggestions for improvement, all of which are being actioned by ASX. While this is positive, ASX still sees it as important to continue with the review it has outlined. As we noted in our Media Release on 19 July 2005, the supervision review is very much about improving efficiency and effectiveness and strengthening our supervisory function by adding resources where necessary.
The supervision review will not lead to a reduction of overall staff numbers for supervision. In fact, an additional three full time staff will be added to supervision.
The review is being conducted in two stages. The first stage is an internal reorganisation of the Market Supervision Division. It will be completed by September 2005. The reorganisation is designed to:
- Bring the specific needs of key stakeholders of supervision into better focus, with separate ASX teams responsible for issuers (listed companies) and for participants (including brokers). Each team will report to a General Manager reporting to Eric Mayne, the Group Executive, Market Supervision;
- Deliver improved outcomes through separation of the investigation and enforcement functions. While administration of, and investigation of possible breaches of, Listing Rules and Market Rules is to be performed by the issuers and participants teams respectively, a third team, Enforcement, will handle all referrals to ASIC and Disciplinary Tribunals. This team will also report to a General Manager reporting to Eric Mayne;
- Improve ASX analysis and development of regulatory policy through the creation of a Regulatory Policy Unit headed by a General Manager;
- Retain ASX national presence with supervisory staff in Sydney, Melbourne, Perth, Adelaide and Brisbane as at present.
“As was the case with the restructure of the other ASX divisions earlier this year, existing staff will be invited to apply for positions in the new structure and, as happened with the other divisions, we expect the General Manager and Manager positions will be filled by internal candidates. This internal reorganisation will be completed by September 2005,” Eric Mayne, the Group Executive, Market Supervision said today.
Eric Mayne provided an outline of the two-stage review to staff at briefings on 13 July. Details of the reorganisation have also been provided to ASIC.
The second stage of the review, which will be completed this calendar year, will assess more broadly, how ASX can improve in the way it supports market integrity (eg, by reducing duplication in what it does and identifying where it may need to add further resources because of heightened market activity). Draft recommendations which come out of this broader review will be discussed with ASIC and the Government and will be subject to broader consultation before decisions are taken by ASX’s Board.
“We genuinely want to pursue changes which improve the supervision of the market and hence the two-stage review. The first stage is to make immediate improvements through an internal reorganisation and the second stage, provide for lasting improvements but only after broader consultation,” Mr Mayne said.
“There has been speculation that ASX wishes to vacate its supervisory responsibilities. To reiterate, that is incorrect. It is not ASX’s wish, ASIC’s wish or the wish of the Government. Integrity of our markets is a core value of ASX and is fundamental to our reputation. Irrespective of whether any present or future government moves the supervisory function from ASX, ASX would, as a company, continue to invest in supporting it,” Mr Mayne said.
