ASIC introduces emergency measures against COVID-19

Coronavirus continues to spread around the world and spread panic in financial markets around the world. Under these conditions, the Australian regulator, the ASIC Securities and Investments Commission, announced measures to ensure the country’s stock market stability.

Australia seems to be a distant continent, but COVID-19 virus does not seem to care about this fact – the number of cases in the country is growing every day. Over the past two weeks, stock market trading has been at record levels, with a sharp surge on Friday, March 13th.

In this regard, ASIC has published directives in accordance with ASIC’s market integrity rules, which are binding on large players. In particular, they should limit the number of transactions made every day until further notice.

According to the regulator’s instructions, firms need to reduce the number of transactions by 25% compared with Friday volumes. Thus, participants trading in large volumes, and their customers, will have to control their transactions.

The agency said on Monday that although on Friday market trading was not violated, exchanges and bidders had to make up for omissions in the weekend. 

It also added that if the number of completed transactions continued to increase, this would create a burden on the processing and risk management capabilities of the market infrastructure and market participants.

Nevertheless, Australian authorities do not expect that the restrictions will affect the ability of retail investors to make transactions.

The regulator said in a statement that Australian markets had proven their strength and sustainability during this period, and the measures taken were preventive and aimed at maintaining high standards of work.

ASIC maintains a proactive approach

it has already been reported that over the past few weeks, ASIC has been actively contacting retail OTC brokers to make sure they are able to withstand the coronavirus storm.

In particular, the Australian regulator urged firms to ensure sustainability, emphasizing the importance of safeguarding against increased volatility, which could lead to higher trading volumes than usual.

The new coronavirus severely inflicted economies worldwide. As time passes, it continues to spread more, and for the time being, even lockdown does not seem to be an effective way to restrain it. Several shopping centres, bars, restaurants were closed over the fears on coronavirus. 

The situation is likely to reach its peak in April. There is still no vaccine developed at the present moment and will take approximately a year.