I musta got the finest india tea lady, it makesa no sense to moi, fobbed off as usual--ahmustagotsent to wong dept. Our Ref: C20120xxx 19 September 2012 Dearest Bigtimebothersome MR. Ditto..( ref; fkyu 15023) Email: ditto@ madashell.com Dear MR Ditto,--why yu bother me? RE: Altona Mining Limited (AOH) Thank you for raising your concerns with the ASX Group. ASX appreciates information that is received from investors, as it assists with our function as a Market Operator. We note that you are concerned about possible manipulative trading in AOH. As of 1 August 2010, the Australian Securities and Investments Commission (ASIC) have responsibility for the supervision of real time trading and Market Participants. Accordingly ASX cannot assist you with the issue raised as it is outside of ASX’s jurisdiction. ASX’s responsibility as a Market Operator is to monitor and enforce compliance by Participants with the ASX Operating Rules. The use of high speed algorithmic trading, sometimes referred to as High Frequency Trading (HFT), is increasing in securities markets around the globe driven by the advancement of technology and the fragmentation of equity markets following the introduction of securities exchange competition. Industry feedback suggests that HFT may already account for 15–25% of equity market turnover in Australia, up from 3–4% estimated by industry in February 2010. We also believe that overall market turnover generated by algorithms is close to 50%. In overseas markets such as the USA these percentages are even higher. ASX and market integrity The terms ‘algorithmic trading’ and ‘high frequency trading’ are generic terms that describe a wide range of trading strategies and systems. It is important to stress they do not all pose a risk to market integrity. Nevertheless, ASX is concerned about the potential risks that a significant growth in algorithmic trading may create, particularly when combined with a reduction in liquidity in the main (‘lit’) market that ASX runs for the benefit of all investors. As a market operator, ASX is subject to obligations under the Corporations Act and Market Integrity Rules. For example, ASX is required to have Operating Rules which serve as controls for orders entered in error as well as having a trade cancellation policy aimed at limiting extreme price movements. Currently an order threshold of a 10% price movement applies to stocks available for trading on more than one market (i.e. ASX and Chi-X) and this threshold will apply to all stocks by the end of 2012. The trade cancellation policy applies to all stocks and other products listed on ASX. As part of our market monitoring activities, if ASX observes activities that may impact market integrity, we make referrals to Australian Securities and Investments Commission (ASIC), which is the regulatory agency that now has the role of real time market surveillance. ASX Limited ABN 98 008 624 691 20 Bridge Street Sydney NSW 2000 PO Box H224 Australia Square NSW 1215 Telephone 13 12 79 +61 2 9338 0000 Facsimile + 61 2 9227 0885 www.asx.com.au ASIC and the Market Integrity Rule Framework ASIC monitors HFT and algorithmic trading activity as part of its surveillance function. ASIC has made it clear that under the Market Integrity Rules there are currently a number of controls to mitigate the risks associated with electronic trading and HFT including: ? Participants are required to have controls to manage the entry of orders into the market, Access without such controls is prohibited under the Market Integrity Rules; ? Operators such as ASX are required to have order entry controls and trade cancellation policies to prevent extreme order entry errors. These are included in the ASX Operating Rules; ? Naked short selling is prohibited, except for limited circumstances; and, ? ASIC has emergency rule making powers and can act quickly if its sees developments that pose an immediate risk to market integrity or client interests. ASIC has recognised that these basic controls can be further strengthened in light of recent market developments. For example, ASIC has identified problematic algorithms as an issue and is working with brokers and their clients to reduce the risk of algorithms having a negative impact on market integrity. ASIC has also indicated in a recent consultation paper (entitled CP 179) that it intends to review the following matters relating to HFT and algorithmic trading: ? Continuing to analyse the prevalence and impact of dark pools and high-frequency trading in the Australian market and abroad; and ? Reviewing the nature of trading by high-frequency traders, including impacts on orderliness of trading in dark pools and on markets, and possible misconduct. It is expected that ASIC will report on its findings, including any regulatory response it sees necessary, in the fourth quarter of 2012. ASX has, and will continue to be, an active contributor to that consultation process. ASX ultimately does not make the rules that govern algorithmic trading and HFT but we are putting forward clear recommendations on how Australia can ensure that its financial markets retain their traditional strengths. ASX functions primarily as a market operator, clearing house and settlement system facilitator. ASIC is the regulatory body responsible for monitoring and enforcing compliance of the Corporations Act and the Market Integrity Rules. The Market Integrity Rules cover matters such as market manipulation, insider trading and other forms of market abuse. Investors are able to submit complaints to ASIC about incidents which raise suspicion of market abuse via its web site. Given ASIC’s role, it would be best to direct your concerns about market manipulation to ASIC. Thank you for bringing your concerns to our attention. Yours Sincerely, [sent electronically without signature] Belinda Mai Customer Service Officer ASX Group
Sheesh !, or should I say sheeshmahatai?
AOH Price at posting:
28.0¢ Sentiment: None Disclosure: Held
