Discuss about the Australian Securities Exchange.
The Australian Securities Exchange
The Stock Exchange of Australia which helps as a market operator which facilitates the payments to the buyers and sellers and provides details to all the investors to be aware of the listing norms. The Australian Securities Exchange offers equities, warrants, ETFs and REITs, and other securities. The operation of ASX is regulated by the Australian Securities and Investment Commission (Exchange 2014).
The roles of Australian Securities Exchange are as follows:
In order to ensure that the share market in Australia runs smoothly, the ASX plays an important role. These are as follows:
- The Australian Securities Exchange allows the Companies in order to raise funds and capital for running of the business. The ASX allows the companies and the trusts so that the companies can issue shares to the general public so that the company is able to raise funds. Once the company is listed, the investors can trade on the securities of that company.
- The ASX ensures that the market is open for the investors to trade on the securities of the Company. The share market consists of the buyers and the sellers who buy and sell their securities in the exchange. Nowadays the buyers and sellers enter into buy and sell and this is done electronically. Before the opening of the computerized trading system, the ASX had a physical location of trading (Basu and Forbes 2014).
- The ASX provides for a system where ASX helps in the transfer of ownership of the securities. This is done by computerized system which helps in the transfer of the legal ownership of the shares from the sellers to the buyers and thus also helps in the transfer of these securities.
- The ASX has set some of the listing rules and regulation so that the companies that are listed in the stock exchange of Australia follow those rules and regulation. The listing rules affecting those companies which are operating follows the rule of “continuous disclosure” and thus the listed companies have to inform any details of the companies which might affect the share price to the ASX (Exchange 2015).
- Whenever the listed companies are going for any kind of acquisition or merger and they release in the financial report, and announce any change in company management. The companies inform the ASX about the release of the information which is sensitive in the market (Rose 2014).
The functions of the Australian Securities Exchange are:
The Australian Securities Exchange functions as a market operator and thus functions as a clearing house and which helps in the facilitation of the payment system. The ASX also helps in the checking of the compliance and checks whether the companies have followed the rules and promotes the standards of corporate governance among those listed companies listed in Australia and it helps to educate the retail investors (Tricker and Tricker 2015).
The companies which are domestic and are internationally located are listed on ASX .It has issuers such as the Corporations and trust which have a variety of listed securities and financial products.The most important function of the Australian Securities and Investment Commission is to supervise the market and to regulate the companies operating in Australia.
The ASX functions are as follows:
- In order to review the application by the Companies this is listed on the ASX. This will include reviewing the companies which is listed on the ASX.ASX will also review the company’s history and finances.
- Each of the companies shall abide by or obey the ASX Listing Rules.
- ASX Supervises the companies which is listed in the Exchange and then the companies take the approval and obey the rules of the exchange (Smales 2014)
- The ASX helps in the dematerialization and trading of shares on a computerized or in an electronic form. The ASX also helps in the review of the application of the stockbrokers and the reviewing of applications by the ASX Market Participants.
- The ASX helps the stockbrokers to access in the share market so that they can buy or sell shares of the company for themselves as well as the customers.
- ASX also helps in the operation of a system which helps in keeping a record of ownership of shares (He and Lepone 2014).
The Rules set by ASX are as follows:
In order to regulate the trading ASX governs the trading
- It sets how the buyers and the sellers of the securities are to be treated. When the traders buy or sell through the broking firm to complete any kind of transaction. The broking firm enters into the order and ASX regulates the market which is important for the trading and business.
- ASIC regulates and supervises the market and they fix the price and various important things for the companies listed on the exchange. The Australian Securities and Investments Commission (ASIC) have surveillance and monitor on the market (Lee, Stevenson and Lee 2014).
The ASX has also set the insider trading norms and regulation for the listed companies which are listed in the Australian exchange. The directors or the management shall not disclose any confidential information during the trading period which might have an effect on the share price and the people are not supposed to trade shares until the market has been informed. People who break the insider trading norms are charged with high penalty.
Basu, A.K. and Forbes, B., 2014. Does fundamental indexation lead to better risk?adjusted returns? New evidence from Australian Securities Exchange. Accounting & Finance, 54(3), pp.699-728.
Exchange, A.S., 2014. Corporate Governance Council, 2014. Corporate Governance Principles and Recommendations. Available at: https://www. asx. com. au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn. pdf.
Exchange, A.S., 2015. ASX funds (listed managed investments and ETPs) monthly update- December 2013.
He, W.P. and Lepone, A., 2014. Determinants of liquidity and execution probability in exchange operated dark pool: Evidence from the Australian Securities Exchange. Pacific-Basin Finance Journal, 30, pp.1-16.
Lee, C.L., Stevenson, S. and Lee, M.L., 2014. Futures trading, spot price volatility and market efficiency: evidence from European real estate securities futures. The Journal of Real Estate Finance and Economics, 48(2), pp.299-322.
Rose, A., 2014. The informational effect and market quality impact of upstairs trading and fleeting orders on the Australian Securities Exchange. Journal of Empirical Finance, 28, pp.171-184.
Smales, L.A., 2014. Non-scheduled news arrival and high-frequency stock market dynamics: Evidence from the Australian Securities Exchange. Research in International Business and Finance, 32, pp.122-138.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.