Today I announce new consultations on the regulatory framework for competition in the clearing and settlement functions of the Australian cash equity market, along with a discussion paper on how our regulators should deploy their existing powers and the potential for further policy responses.
Australia's well-regulated financial system has been vital in ensuring our economy has withstood the worst of the global financial crisis and the continued turbulence in international financial markets.
The steps I announce today will build on the Government's reforms to critical financial market infrastructure designed to ensure our system remains strong, secure and efficient.
On 30 March 2012, I released the recommendations of the Council of Financial Regulators (the Council) on reforms to the oversight of Australia's key financial infrastructure.
In developing these recommendations, the Council identified a number of issues for consideration around competition in clearing and settlement. The Council noted it would work to further assess these issues with the Australian Competition and Consumer Commission (ACCC).
The discussion paper released today, Competition in the clearing and settlement of the Australian cash equity market, will assist consultation on the way our regulators' existing powers are deployed in ensuring competition and stability in equity market clearing and settlement. The paper will also help identify possible further policy responses required to achieve these objectives.
The paper discusses competition and access issues which could arise when considering the existing post-trade market structure for ASX securities, and how these might be addressed.
On 8 April 2011, in the context of my decision to prohibit the acquisition of ASX Limited by Singapore Exchange Limited, I sought the Council's advice on measures that could be introduced to ensure Australia's regulatory system for financial market infrastructure continues to protect the interests of Australian issuers, investors and market participants.
The Treasury has recently engaged with stakeholders on options for implementing the Council's initial recommendations on these issues and is now developing a final policy framework based on the Council recommendations.
The Council will now undertake separate consultation on issues relating to competition in clearing and settlement through stakeholder meetings over an eight-week consultation period. Interested parties seeking to arrange a meeting as part of these consultations should contact Treasury by 29 June 2012.
The discussion paper is available on the Treasury website at www.treasury.gov.au