Market integrity matters! You can play an important role in keeping our markets clean

https://asic.gov.au/regulatory-resources/markets/resources/markets-articles-by-asic/market-integrity-matters-you-can-play-an-important-role-in-keeping-our-markets-clean/

you must notify ASIC if you suspect market misconductIn the lead up to Christmas, be on the lookout for 'window dressing'Lodging a suspicious activity report is quick and easy – check out the poster!ASX, Chi-X or APX market participants and crossing system operators must notify ASIC if they suspect market misconduct. To simplify this process, we have created a new form on the market entity compliance system (MECS) and an educational poster.Suspicious activity reports (SARS) are an important source of information about market misconduct for ASIC. To date, we have received 254 SARs, and the rate at which these are being lodged is increasing.We conduct inquiries into every SAR we receive. In the first instance, this may involve running reports using specialised surveillance tools. This may be followed by requests for information and interviews in some cases. We keep a record of intelligence gathered during this process for future reference.Approximately 15% of SARs submitted to ASIC are referred to our market integrity enforcement team for investigation. Most other matters are closed after we determine there is no case to answer or an alternative outcome is appropriate.

example 1: Suspected insider tradingThe client of a participant traded shares in a listed company just prior to the issue of price sensitive announcement by that company. The participant deemed the trading suspicious after learning that the client was an employee of the company. The participant submitted a SAR to ASIC.We conducted enquiries into the matter. As well as conducting our own analysis, we issued notices to a number of participants and requests to the company in question and an international regulator.After examining this information, we determined that there was a high chance the client had traded using inside information. The matter was referred to our market integrity enforcement team for further investigation with a view to possible prosecution.

lodging a SAR is quick and easy. We recently created Form M57 Suspicious Activity Report on MECS for this purpose. This form guides you through the sorts of information to provide and can be submitted online. Participants who wish to can still submit SARS by emailing [email protected].