The Australian Securities & Investments Commission has once again given the major sharemarket operator ASX Ltd a clean bill of health, in line with both of their obligations, but for the second time in two years ASX found itself dealing with a technical breakdown that incurred some criticism.
ASX had an outage on October 27, 2011, which caused the regulator to extend its surveillance report to November 1.
On October 9 last year the exchange's market announcements platform, by which companies reveal important information, fell over for three hours and 44 minutes.
A third party operation in India was involved and the system did not get back up until after the market closed.
"While we are satisfied about ASX Group's operational response to this issue, we question the approach it took to keeping all market users adequately informed," the ASIC report said.
While that outage got the most attention, the regulator asked the ASX to make seven specific changes to the way it monitors its listing rules, for instance in cases where people create or are suspected of creating false markets in stocks.
False markets in stocks usually involve thin bids for stocks at higher than previous prices in order to make them look more keenly sought than they actually are, although occasionally they can work the other way, with spurious offers of stock at lower prices. In both cases this usually only happens in thinly traded stocks.
ASIC also asked ASX to provide more transparency to the market about how it monitors companies that have been suspended for long periods. At the time of ASIC's assessment, there were about 40 companies that had been suspended by ASX, including some that have been suspended for more than 10 years.
ASIC said ASX's procedures were adequate but that ASX should be more transparent in its processes and in explaining the outcomes of its reviews.
