ASIC consults on market operator financial resources requirements

ASIC is consulting on proposals for clearer guidance on financial resources requirements for licensed market operators in Australia.

The draft updated guidance aims to support market resilience by providing greater clarity on the amount and types of financial resources required to support resilience and how to interpret ASIC's guidance.

Licensed operators of financial markets in Australia are obligated to have sufficient resources to operate their markets properly under the Corporations Act. This includes sufficient financial resources as well as sufficient technological and human resources.

"Clearer guidance will help market operators comply with regulatory expectations and maintain sufficient financial resources to navigate periods of disruption and support the orderly functioning of Australia's financial markets," ASIC commissioner Simone Constant said.

"In this era of heightened strategic risk, resilience and sound foundations of our capital markets have never been more important nor offered more opportunity for our competitiveness for the decade ahead."

ASIC's proposed updates to Regulatory Guide 172 Financial Markets: Domestic and overseas operators include clarifying the form and availability of financial resources, additional scenario and stress testing for significant market venues, and restrengthening reporting and monitoring requirements.

"Resilience is foundational to the ongoing growth and competitiveness of our capital markets. It is the bedrock upon which innovation, efficiency and productivity improvements can be built at scale in our capital markets," Constant said.

"Building and maintaining resilience requires sustained focus, disciplined execution, transparency of operations and practice, clear accountability and, ultimately, adequate financial resourcing."

ASIC's consultation is open until December 4.