ASIC toughens up rules on dark pools and high frequency trading

Key Points:

Investment banks will be required to publicly disclose information about their trading activities in dark pools and report suspicious activity under strict new obligations.

New amendments to the ASIC Market Integrity Rules (Competition in Exchange Markets) ("MIR") announced by ASIC last month impose greater disclosure, transparency and reporting obligations on market participants who run dark trading venues known as "dark pools" or "crossing systems", where buy and sell orders are not visible to the rest of the market.

The development of the new rules was prompted by ASIC concerns about the transparency and integrity of crossing systems and a perceived lack of fairness in the way dark pool operators deal with client orders.