Stockbrokers and Financial Advisers Association (SAFAA) has welcomed ASIC’s long-awaited report on the 2020 ASX outage.
‘We are pleased that ASIC has recognised the need for ASX to refine its procedures for clear thresholds for moving out of an Enquire session state during a market outage, review its communications protocol to market participants and other stakeholders and develop a protocol for intraday checkpoints that includes a final cut-off time after which the market will not re-open’, stated SAFAA CEO, Judith Fox.
‘The uncertainty around whether orders had been filled, either partially or fully with attendant challenges in managing client expectations, was a key impact on market participants during the outage.’
‘The report points out that while Chi-X remained open for trading that day, it experienced very limited liquidity and trading activity as a result of the impact of the ASX outage. That impacted on the ability of market participants to submit new client orders to Chi-X,’ Ms Fox said.
‘These were key issues raised by our members in consultations after the outage. While we point out that the circumstances surrounding every outage are different, improving these issues will hopefully provide much needed certainty and transparency for any future outage and help market participants meet their expectations.’
SAFAA also welcomed clarification that while market participants are expected to have arrangements in place to submit new client orders to an alternative market, this can be by way of third-party access arrangements rather than a requirement to be connected to an alternative exchange.
Ms Fox added ‘Of course it is important that trading on alternative trading venues should be in accordance with client instructions. Those instructions may be to wait until there is further clarity about what is happening and when the affected market is expected to open.’
SAFAA looks forward to working with ASIC and market operators on ASIC’s expectations of market participants.
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The Stockbrokers and Financial Advisers Association (SAFAA) is the professional body for the stockbroking and financial advice industry. Our members are Market Participants and Advisory firms that provide securities and investment advice, execution services and equity capital-raising for Australian investors, both retail and wholesale, and for businesses. Practitioner Members are suitably qualified professionals who are employed in the securities and derivatives industry.