Key points
- This article follows a session on the pace of technologically driven change in global financial markets at the 2023 ASIC Annual Forum in Melbourne.
- Technology is forging new digital ecosystems and the reshaping financial system. Regulators and industry alike must do all they can to navigate disruption, and avoid learned market abuse, misinformation, discrimination, and bias.
- ASIC supports technological change that improves outcomes across the financial system, and takes a principles-based, technology-neutral approach to regulation.
Tony Boyd, David Ferrall, Tony Mackay, Marnie Reid and Calissa Aldridge in conversation at the ASIC Annual Forum 2023.
Increased competition is required to drive efficiencies in Australia’s financial markets, industry leaders have told the ASIC Annual Forum.
Reflecting on the recent ASX CHESS replacement difficulties, including the announcement of a new design solution, founding CEO and Chairman of Chi-X Europe and Global, Tony Mackay said Australia was, “trying to move its whole market in one go”.
“We’ve heard a lot today about promoting competition and this is one area I believe where competition should be encouraged,” Mr Mackay said.
He noted the role of proportional regulation in setting guard rails for the transformation of financial markets.
“Competition with good regulation will sort out what technology wins. It’s not the job of the regulator to do that – they set the environment so we can have the best technology at best price,” Mr Mackay said.
Founder and Chief Executive Officer of FinClear Group, David Ferrall, agreed. “Technology is one leg of the stool but there’s also a regulatory side."
Mr Ferrall said the delivery of the ASX CHESS replacement was critical to the proper functioning of Australia’s markets, but there needed to be a “dual track approach” to promoting competition.
“In the dual track, we must promote competition via alternative technologies that might sit outside the regulatory framework for the moment,” Mr Ferrall said.
A technology-neutral approach
ASIC broadly supports technology that will improve outcomes for market operators and users across the financial system.
We take a principles-based, technology-neutral approach to regulation – existing rules about controls, governance and accountability apply equally to existing and emerging technologies.
But while ASIC takes a facilitatory approach to new technology, ASIC’s Executive Director of the Markets Group, Calissa Aldridge said the regulator would not allow the fundamentals of financial market to be compromised.
"Our approach is to be as proactive as we can be and having that integrated role with the market means we’re very well placed to identify trends and respond,” Ms Aldridge said.
Background
The ASIC Annual Forum brings together thought leaders and experts to explore strategies for adapting and evolving in a time of geopolitical, economic and technological change. The theme of this year’s event is ‘Navigating Disruption’.
The session, ‘Digital innovation in financial markets’ was moderated by Tony Boyd, veteran business journalist.
The panel included:
- Calissa Aldridge, Executive Director of the Markets Group, ASIC
- Tony Mackay, Founder and CEO of XB Market Ventures and KairosX, Founding CEO & Chairman of Chi-X Europe & Global, Former CEO & Chairman of Instinet International
- David Ferrall, Founder and CEO, FinClear Group
- Marnie Reid, CEO, Issuer Services, Australia and New Zealand, Computershare
Read more
- View more highlights from the ASIC Annual Forum, 21-22 November 2023
- ASIC’s digital transformation
- Speech: Marconi’s illusion: What a 120-year-old magician’s trick can teach us about cyber preparedness
- Speech: ASIC encourages financial industry organisations to help lead through change
- ASIC Annual Forum 2022: AI and the data revolution