ASIC has released Consultation Paper 181 Retail trading in Commonwealth Government Securities (CP 181)  focused on the Australian Government’s decision to facilitate retail trading of Commonwealth Government Securities (CGS) as part of fostering a deep and liquid corporate bond market.

 

The paper proposes market integrity rules to provide for fair, orderly and transparent trading of depository interests in CGS traded on public exchanges.

ASIC Commissioner, John Price, said ‘Fostering the retail trading of CGS on financial markets can give retail investors, including self-managed super fund trustees, a more visible pricing benchmark for investments they may wish to make in corporate bonds issued by Australian businesses.'


‘In addition, it can encourage retail investors to consider diversifying their savings through fixed-income products like government and corporate bonds,’ Mr Price said.


CP 181 proposes to specifically include CGS depository interest within the scope of the ASIC Market Integrity Rules Competition in Exchange Markets 2011, adopting the proposals in Consultation Paper 179 Australian market structure: Draft market integrity rules and guidance (CP 179) and tailoring them to CGS depository interests.


Feedback is sought on specific regulatory proposals for CGS depository interests relating to:

  • extreme price movements
  • best execution
  • pre- and post-trade transparency
  • regulatory data for market surveillance
  • market operator obligations in a multi-market environment, and
  • market participant obligations.


Feedback is also sought on whether, and to what extent, the proposals should be applied to other debt market products, such as corporate debt, that are or may be traded on public exchanges. This will assist us in developing the regulatory framework as part of Government’s long term plan to foster the retail corporate debt market.


Submissions to CP 181 close on 31 August 2012.