91AV

Kill switch’ capability and other trading system controls

• Make a new rule for ‘kill switch’ capability and requiring direct control over filters, with amended drafting

• No new rule for real-time monitoring and post-trade analysis. Publish guidance clarifying our expectations for these trading system controls under existing rules

Testing of algorithms and annual review of systems

• Amend existing rules to incorporate an annual review of systems

• No new rule on testing of algorithms. Publish guidance clarifying our expectations on testing of systems under existing rules (including of order flow via algorithms)

Additional minimum standards for direct market access

No new rule. Publish guidance clarifying our expectations for additional minimum standards for direct market access under existing rules

Limit up/down control for cross-traded products

No new rule. Amend existing rules on anomalous order thresholds (AOT) and extreme cancellation ranges (ECR)

Limit up/down control for ASX SPI 200 index futures contract

Apply the amended AOT and ECR rules to the ASX SPI 200 index futures contract

Identification of:

• execution venue;

• the category of client (e.g. principal or agent, retail or wholesale);

• the origin of order (including if indirect broker); and

• the algorithm that generated the order

Make a new rule requiring identification of:

• execution venue;

• principal or agency orders;

• the origin of order (including client reference) where information is readily available (guidance to be provided);

• the Australian financial services licence number of a client order (where this originates from a shadow broker/indirect market participant and information is readily available); and

• orders that originate through direct market access

No new rule for client legal identifier on all orders

Enhanced clock synchronisation for market operators

No new rule. Keep under review

Clock synchronisation for market participants

No new rule. Keep under review

Records to ASIC in standard format

No new rule. Publish guidance on a standard format for provision of information. Revise content to ensure information required will be easier to source

Extend rule to some products quoted on ASX (e.g. interest rate securities, options and warrants)

No new rule. No change to current best execution obligations

Meaningful price improvement requirement for dark trades below block size (one tick or at midpoint)

Make new rule on price improvement as proposed

If dark liquidity below ‘block size’ grows by 50% in the next 3 years, impose a $50,000 threshold for dark trades arising from passive (limit) orders

No new rule on minimum size threshold. Keep under review. Remain prepared to introduce if the price discovery function of the market is likely to be compromised

Tier ‘block size’ exception (currently $1m) by reference to liquidity of stocks (range from $200,000 to $1m)

Amend the ‘block size’ threshold rules as proposed – in conjunction with the new price improvement rule

Consult later in 2012 on new general and relevant ‘market operator-like’ obligations to apply to operators of dark pools

Depending on the proposals, staggered implementation up to 12 months from when rules made

Depending on the rule, staggered implementation up to about 18 months from when rules made