ASIC Seeks Feedback on Updates to Market Integrity Rules

​The Australian Securities and Investments Commission (ASIC) has opened consultation on proposed changes to its market integrity rules (MIRs), aiming to modernise oversight of trading systems and adapt to new technologies, including artificial intelligence (AI).

The proposals focus on streamlining requirements, reducing regulatory complexity, and aligning Australia's framework with international standards. According to ASIC, about 85% of trades in Australian listed equities, 94% of SPI 200 futures, and 46% of three-year Treasury bond futures are now executed through algorithmic systems.

The regulator said the changes are intended to apply consistent principles across securities and futures markets while introducing safeguards such as mandatory "kill switches" to suspend malfunctioning algorithms. ASIC also intends to repeal certain outdated provisions, including the annual automated order processing notification, though it will offer a conditional no-action position for firms due to submit notices from November 2025.

ASIC highlighted potential risks during periods of heightened volatility, noting that AI-driven strategies could exacerbate instability or cause sudden disruptions. "The guardrails in ASIC's market integrity rules also need to adapt to changing market practices, technology and risks," the regulator said.

The consultation seeks input from industry participants on how to balance innovation in automated trading with safeguards against unintended consequences.