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Review of Financial Market Infrastructure Regulation

Key documents

The Council of Financial Regulators (the Council) has released a consultation paper on proposals to enhance the supervision of Australia’s critical financial market infrastructure.

The proposals include new powers to require certain systemically-important market infrastructure to have key aspects of their operations located in Australia and overseen by ‘fit and proper’ persons, as well as increased power for regulators to intervene in the event of infrastructure experiencing substantial difficulties.

The consultation paper provides stakeholders with the opportunity to comment on proposals that the Council is now considering. The Council, whose members include the Governor of the Reserve Bank, the Secretary to the Treasury, and the Chairs of both APRA and ASIC, will then finalise its advice to the Government to inform any necessary legislative amendments.

On 8 April 2011 the Deputy Prime Minister and Treasurer, the Hon. Wayne Swan MP, asked the Council to establish a working group to consider reforms to strengthen Australia’s regulatory framework. This followed the decision to prohibit the acquisition of ASX Limited by Singapore Exchange Limited, based on unambiguous and unanimous advice from the Foreign Investment Review Board that the proposal was contrary to the national interest.

The regulators advised that reforms were necessary to ensure we can preserve the integrity of our financial infrastructure and the strong ability of our supervisors to maintain robust oversight in all market conditions, including in the event of any future foreign ownership or alliance of the ASX.