Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.2 - LICENSING OF FINANCIAL MARKETS  

Division 6 - The Australian market licence: other matters  

REGULATION 7.2.16   POTENTIAL CONFLICT SITUATIONS  

7.2.16(1)    
For subsection 798E(1) of the Act, this regulation applies in relation to specific and significant conflicts, or potential conflicts that would be specific and significant, between:

(a) the commercial interests of Australian Stock Exchange Limited ( ASX ) in dealing with a body (the competitor ) that operates a business with which:

(i) ASX is in competition; or

(ii) a subsidiary of ASX is in competition; or

(iii) a joint venture (however described) to which ASX is a party is in competition; or

(iv) a joint venture (however described) to which a subsidiary of ASX is a party is in competition; and

(b) the need for ASX to ensure that the market operated by it operates in the way mentioned in paragraph 792A(1)(a) of the Act.

7.2.16(2)    
The competitor may lodge with ASIC in the prescribed form, an application for ASIC to decide that ASIC, instead of ASX, will make decisions and take action (or require ASX to take action on ASIC's behalf) in relation to:

(a) if the competitor is seeking to be listed - the compliance by the competitor with the applicable listing rules of the market operated by ASX; or

(b) if the competitor is listed on the market operated by ASX - the compliance by the competitor with the applicable listing rules of the market operated by ASX.

7.2.16(3)    
As soon as practicable after receiving an application under subregulation (2), ASIC must:

(a) consider whether a conflict, or potential conflict, exists as described in subregulation (1); and

(b) if it considers that a conflict, or potential conflict, exists - consider whether, having regard to ASX's obligations under subparagraph 792A(1)(c)(i) of the Act, the conflict, or potential conflict, would be dealt with more appropriately and efficiently by a means other than taking the action mentioned in subregulation (2); and

(c) decide whether (and to what extent):

(i) to make decisions and take action; or

(ii) to require ASX to take action on ASIC's behalf;

in relation to the matters mentioned in paragraphs (2)(a) and (b).

7.2.16(4)    
If ASIC decides to make decisions and take action (or to require ASX to take action on ASIC's behalf) as mentioned in subregulation (2), ASIC:

(a) may consult with ASX and the competitor to identify the listing rules of the market operated by ASX for which ASIC needs to make the decisions and take the action; and

(b) must, as soon as practicable, decide the extent of ASIC's role, having regard to:

(i) the rationale for the listing rules of the market operated by ASX; and

(ii) the desirability of treating the competitor consistently with other entities listed, or seeking to be listed, on that market; and

(iii) the extent to which action taken by ASIC is severable from the wider supervision of the competitor's compliance with the listing rules; and

(iv) its consultations (if any) with the competitor and ASX.

7.2.16(5)    
ASIC must, as soon as practicable, advise ASX and the competitor, in writing, of decisions under paragraphs (3)(c) and (4)(b).

7.2.16(6)    
If ASIC decides to make decisions and take action (or to require ASX to take action on ASIC's behalf) as mentioned in subregulation (2):

(a) the decisions made and actions taken have effect despite anything in the listing rules of the market operated by ASX; and

(b) decisions made and actions taken by ASIC (or action taken by ASX on ASIC's behalf) have effect as if they were decisions made and actions taken under the listing rules.

Note 1: It is expected that the listing rules of the market will support ASIC's power to take a supervisory role in relation to compliance with some or all of the listing rules.

Note 2: Under section 246 of the Australian Securities and Investments Commission Act 2001 , ASIC is not liable to an action or other proceeding for damages for or in relation to an act done or omitted in good faith in performance or purported performance of any function, or in exercise or purported exercise of any power, conferred or expressed to be conferred by or under the corporations legislation.

Note 3: The powers available to ASIC include the power:

(a) to grant, or not to grant, waivers of the listing rules; and

(b) to impose conditions on which the grant of a waiver is made.

7.2.16(7)    
If ASIC believes, on reasonable grounds, that:

(a) the period during which decisions will be made and action will be taken in a particular case is likely to be more than 3 months; and

(b) the decisions and actions likely to be required are not adequately reflected in the listing rules of the market operated by ASX;

ASIC must notify ASX, in writing, of its belief.

7.2.16(8)    
ASX must, as soon as practicable after being notified under subregulation (7), amend the listing rules of the market operated by ASX to the extent necessary to meet ASIC's concerns.

Note: Amendments of the listing rules are subject to procedural requirements, including possible disallowance, mentioned in sections 793D and 793E of the Act.

7.2.16(9)    
If ASIC decides that it is no longer necessary for decisions to be made and action to be taken in relation to the particular conflict or potential conflict, ASIC must notify ASX and the competitor of its decision as soon as practicable.

7.2.16(10)    
ASX may repeal any listing rule or amendment made for subregulation (8) only if:

(a) the repeal or amendment is necessary or convenient to meet ASIC's concerns more effectively; or

(b) ASIC has notified ASX under subregulation (9).

7.2.16(11)    
Paragraph (10)(b) does not prevent ASIC from:

(a) reviewing a particular conflict or potential conflict; and

(b) deciding, at any time (with or without complying with paragraph (4)(a)), that it has again become necessary for ASIC to make decisions and take action (or for ASIC to require ASX to take action on ASIC's behalf) in relation to the conflict or potential conflict.

7.2.16(12)    
If ASIC makes the decision mentioned in paragraph (11)(b), ASIC must notify ASX and the competitor of its decision as soon as practicable.

7.2.16(13)    
For this regulation, ASX must:

(a) give ASIC the information and documentation that ASIC reasonably needs to make decisions and take action under this regulation; and

(b) establish administrative and procedural arrangements for that purpose.

7.2.16(14)    
A competitor may notify ASIC that the competitor no longer wishes ASIC to make decisions and take action (or for ASIC to require ASX to take action on ASIC's behalf) in relation to the conflict or potential conflict.

7.2.16(15)    

If ASIC is notified under subregulation (14), ASIC must, as soon as practicable:

(a) decide whether it will cease to make the decisions and take the action (or cease to require ASX to take action on ASIC's behalf); and

(b) notify ASX and the competitor of its decision.

7.2.16(16)    

If ASIC decides to cease to make decisions and take action (or to cease to require ASX to take action on ASIC's behalf), ASIC must cease to make decisions and take action (or must cease to require ASX to take action on ASIC's behalf) in relation to the conflict or potential conflict.

7.2.16(17)    

If ASIC decides not to cease to make decisions and take action (or not to cease to require ASX to take action on ASIC's behalf), ASIC must continue to make decisions and take action (or must require ASX to take action on ASIC's behalf) in relation to the conflict or potential conflict.