This is what i am thinking of sending on. i will wait a day for comments helpful references i should have included:
Hopefully there is a lawyer or two who will (and say so)!Proper Role ofASX/ASIC
Complaint:
ASX have exceeded itsproper regulatory role by requesting or requiring the acquisition of commercial in confidencematerial which may be of value to itself. This has been effected by suspendingand continuing the suspension of ISX from share trading with implication thatASX can delist ISX under its own listing rules.
ASIC should examinethe potential conflict of interest that ASX may have in regard to its commercialinterests in relation to its regulatory role. Consideration should be given to publiccommentary for its use of blockchain technology, ‘mutualisation’ of KYC for Anti-MoneyLaundering and related.
ASIC should examinethe investment interests of ASX Directors in companies which may be required toshare market sensitive information with ASX, and whether that represents apotential equitable action for breach of confidence.
Proposed Remedy:
All ASXresponsibilities in regard to suspension or delisting should be transferred toASIC. All responsibilities for the nature of disclosure should be transferredto ASIC. ASX will administer market statements and ASIC rulings. ASX will payASIC for those services and may charge listed companies to recover those costswith an appropriate surcharge it determines.
Considerations:
1.
Breach of Confidence:
Duties of confidentiality and loyalty andfidelity
Last modified on 17 June, 2010.
Breach ofconfidence
3.3 The equitable action for breach of confidence may be used to restrict the disclosure of information in certain circumstances. The principle is that the court will ‘restrain the publication of confidential information improperly or surreptitiously obtained or of information imparted in confidence which ought not to be divulged’.[1]
3.4 An action for breach of confidence may be brought to restrain disclosure by a third party who has received confidential information. The information may have been communicated in breach of a duty of confidence,[2] or may have come into the hands of the third party by human error.[3]{References in original}
2.
During the suspensionof ISX it was reported on forum HotCopper (Post #: 41778391):
AFR reported that ithad sighted emails exchanged between ISX and ASX.
That post goes on toask questions about who knew what when, and whether in effect there was abreach of confidence.
The post notes:
From ASX’s Annual Report 2019 below - “All directors receive copies of agendas, papers andminutes of committee meetings to help ensure they remain equally informed,regardless of whether they are appointed to particular committees.”
A broader concern (mine)is whether ASIC should be managing such matters rather than ASX, and whethersomeone should be fined or sued for the leakage of related material from ASX asa regulator to anyone else (including non-regulatory departments of thecommercial entity ASX.
3.
Related areas of ASXor ASX Director’s interests that may potentially represent a conflict ofinterest.
and states in part...
"
...mutualised ‘know your client’ (KYC) regimes are another attractive usecase of the ASX's DLT that could radically reduce costs for banks. Bankscurrently conduct KYC processes themselves, and re-do the work every time acustomer switches. But the blockchain will allow one bank to syndicate theirproof which could be relied upon across a group.
“The savings could be profound, each bank is currently building their ownsolution at great expense. We have innovators out there across the financialsector, someone needs to do it.”
Prem Naraindas, global blockchain director at DXC Technology, agrees thebig benefits of the ASX blockchain will come outside equities, as multipleactors in various industries work out new ways of working with each other.
DXC is working on two projects with Bloxian Technology to put the ASXblockchain to use as soon as possible.
One is looking to streamline the procurement of services. Similarly tothe mutualised idea, it currently can take several months for a new contractorto be brought on board by a bank given the extensive checks that take place,and each bank does the work itself even if the same party works for other bankswith similar processes. A system to co-ordinate vetting, while also allowingfor idiosyncrasies, will be ready mid next year, a year before the new CHESS isset to go live.
DXC and Bloxian have also build a digital, end-to-end home buyingapplication, the first working demo built on the Digital Asset ModellingLanguage (DAML) anywhere in the world.
On the ASX's blockchain it assesses borrower capability to repay a loanafter analysing bank account information, and takes prospective buyers throughvirtual walk through of properties using augmented reality. Borrowers can applyfor loans online and the process has also digitised bidding and settlementdocumentation.
All these use cases provide a warning that incumbents not willing tomodernise their own businesses and follow rapid advancements underway will beleft behind.
While some ASX critics are worried ASX's infrastructure will become amonopoly, the DAML language has been open sourced, so can be used with otherenterprise blockchains such as Hyperledger, or in cloud platforms run byMicrosoft or Amazon. ASX is competing in a new world of blockchaininfrastructure against names like Corda, R3 and Quorum.
"
The widely recognized issues of Money Laundering make KYC, KYCC, and AML critical areas of competitive advantage. Having a regulator also operating in those marketplaces does seem to invite legitimate concerns about conflict of interest.
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