In a speech to the Australian Shareholders Association (ASA) conference last week, ASIC chairman Greg Medcraft said these factors represent major challenges for the regulator’s ability to keep investors informed and confident within the Australian financial markets.
The increasing use of market-based financing is changing the structure of the global financial system, he added.
“The growing importance of market-based financing presents a challenge for market regulators to ensure we have the right tools and resources in place, so that debt and equity capital markets can perform their critical role in funding economic growth,” Mr Medcraft said.
Innovation within the sector is inevitable, while there is also increasing complexity within markets, products and technologies, he said, noting also that the increasing use of dark pools and high frequency trading is now on ASIC’s radar.
“We’ve found that high-frequency trading is not something that investors should be afraid of,” Mr Medcraft said. “Rather, it represents what is ‘the new norm’ and consumers and investors should continue to have confidence in the integrity of our financial markets.”
“Dark pools are part of the new norm and ASIC will continue to monitor their use.”
Mr Medcraft also acknowledged the increasingly important role globalisation plays in financial markets.
Global financial markets need to work in cooperation with each other and address the difficulties that exist with global misconduct, he said.
