The Australian Securities and Investments Commission (ASIC) has proposed a range of rules to contain the growth of "off-market" and high-frequency trading (HFT), saying that it had uncovered some breaches of current law but no widespread or systemic abuse.
ASIC said concerns about HFT were overstated and could be attributed to the increasing use of technology by investors across the market. But the market regulator also found significant changes in the long-standing practices of off-market or “dark” trading, with 20 systems, or dark pools, now operated by 16 market players and trades in smaller sizes that have started to influence the prices of some shares.
“One of ASIC's priorities is ensuring markets are fair and efficient. But dark trading is now occurring in smaller sizes that are similar to ‘lit’ exchange markets and for some securities this has influenced their price,’’ ASIC said in a report today.
