Australian Derivatives Exchange: Limitations On Market Trading

The Australian Derivatives Exchange (ADX) announced on March 26 that it will permit trading only to close out open positions in ADX contracts until further notice. This action was taken in the interests of market integrity and will enable ADX to focus on a review of its overall financial strategies. The decision was made after consultation with the Australian Securities and Investments Commission (ASIC), and these consultations will continue on an ongoing basis.

ADX is taking steps to remedy a breach of the requirement on forward cash reserves in the deed with ASIC which accompanied the regulatory approval of ADX in December 2000. The timing of a satisfactory resolution is uncertain at present, and ASIC has expressed concern at ADX's capacity in these circumstances to continue to operate an approved market in a fair and orderly manner.