Is the ASX managing ISX as per ASX’s own Corporations Act obligations regarding its Conflict Handling Policy?, page-26

I am resubmitting the initial post to this thread with alterations in hopes that itnow satisfies Hot Copper’s TOC.

The purpose of this thread is to share and receive knowledge toand from other posters relating to the topic contained in the title. Please use Hot Copper’s TOC guidelines in responding to this post.

Topic:

The ASX has (allegedly) am actual, perceived or potential conflict of interest with ISX for the bank's AntiMoney Laundering (AML), Counter Terrorism (CTF) business as well as for theDelivery vs. Payment(DvP) settlement systems for sorporate securities. Both of these systems have the potential for creating hefty revenuea for any business that is effective in procuring this business. When there are enormous revenues and therefore profits to be made, extra care must be taken.

What we know is:

• The ASX has suspendedISX since 2^nd October indefinitely.
• It is alleged that theASX has received numerous confidential documents from ISX.
• It is alleged that theASX said in an email to ISX that the ASX will not guarantee ISX confidentiality of documents even while the documents are suppose to be confidential by law in other jurisdictions
• It is alleged that the ASX has stated toISX, if ISX does not provide the confidential information, it will be further reason for the ASX to continue the suspension of ISX.
• It has been reportedthat (allegedly) confidential information given to the ASX has ended up in thehands of a “short seller”.

ASICs own document on“Handling corporate information” statesthat “Listed companies must take responsibility for the management of theirconfidential information. Poor practices in relation to the handling of confidential price sensitive information can negatively affect market integrity, reputation, jeopardise the success of a transaction and may lead to ASIC action.” This begs the question, is ISX ultimately responsible if a situation exists where the ASX leaks ISX confidential information causing market readjustment (even after it comes back off suspension) because they give, even under duress, information that is suppose to remain confidential?

According to the ASX’s Corporations Act obligations, the ASXmust have “adequate arrangements for managing conflicts between its commercialinterests and its fair, orderly and transparent (“FOT”) and fair and effective(“FE”) management of public company members of the ASX."

In the ASX’s Conflict Handling Policy, the documentstates in its introduction “ASX is committed to maintaining a high standard ofintegrity, investor confidence and good corporate governance including having aleadership role in setting and articulating corporate governance standards inAustralia. "It further states that the policy is “underpinned by the ASXvalues, to:”

• “Be Open
• Be Trustworthy
• Be Original
• Be The Example"

The document further states thatunder the policy all ASX staff, including employees, contractors, consultants,secondees and directors must:

• “Comply with ASX’sconflict handling arrangements;
• Not seek to improperlyinterfere with, or improperly influence, any decision made under or for thepurpose of these conflict handling arrangements;
• Not misuseconfidential or sensitive information which may give an advantage to an ASXentity, a competitor, a customer or other party not intended to have theinformation;
• Generally not doanything that would cause ASX to breach its obligations in relation toactivities it performs; and
• Disclose all materialpersonal interests (see: Staff Notification form contained in the Codeof Conduct) and not participate in decisions regarding thoseinterests."
  

Aconflict of interest is defined in the document as:

• “Actual – where aconflict between competing interests already exists
• Perceived – where aconflict between competing interests is, or might be, seen to exist
• Potential – wherecompeting interests have the capacity to develop into a conflict in thefuture."

ASIC is ASX’s listing authority andmonitors its (ASX) performance of its obligations under the listing rules,includingthe management of conflicts of interest.

The document further states “Directors are required to discloseto the Board any material personal interests, such as being a director ofanother entity listed on the ASX or a participant of ASX is not involved in anyway in any decision under the Listing Rules and the Operating Rules in relationto that entity.” Also it states that “The ASX Company Secretariat has policies and procedures in place to manage these requirements.”

Further,under the Corporations act the document further states” the ASX as a clearingand settlement licensee (CS licensee) must have adequate arrangements forhandling conflicts in relation to the commercial interests of the licensee andmust make decisions without inappropriate intervention or interference. Examples of decision where potential conflicts may arise include to:”...

• “Grant a trading haltor to impose a suspension or to terminate”
• ...
• “Conduct aninvestigation or to launch enforcement proceedings into apotential breach by aparticipant of the Operating Rules and the use of anyfines arising fromenforcement action”
• “Refer a potentialbreach of the Listing Rules or the Operating Rules to ASIC”

Finally, the document states thatthe “ASX holds two limited purpose Australian Financial Services Licenses(AFSL) granted under the Corporations Act. Holders of AFSLs are required to have adequate conflict handling arrangements.ASX has controls in place to manage actual or perceived conflicts including:

• Segregation of duties
• Confidentiality:including information barriers and physical barriers asnecessary
• Escalation: breachesof conduct must be escalated immediately."

We need to continue to bevocal to ASIC and request that they investigate in the activities by the ASXagainst ISX due to the alleged actual, perceived or potential conflict of interest.