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ASIC reports on National Stock Exchange’s listing standards

ASIC has released its assessment report on the listing standards of the National Stock Exchange of Australia Limited (NSX).

The report concludes that NSX should make a number of changes to improve compliance with its statutory obligations.

NSX, and its parent company National Stock Exchange Limited, have agreed to a number of actions designed to ensure that:

  • persons that can influence NSX are of good repute, are sufficiently knowledgeable and will act in the best interests of the NSX market as well as the wider Australian market
  • the NSX market attracts issuers with legitimate motives and connection to Australia and ensures listings occur under Australian-regulated disclosure documents,  and
  • the NSX market operates with integrity and its users are informed.

These actions also address serious questions about the rationale for some foreign listings on NSX.

ASIC Commissioner Cathie Armour said, ‘Listing standards are critical to the integrity of the Australian equities market, and the trust and confidence investors have in it. As one of only a small number of domestic listing markets, NSX has an important role to play in upholding standards expected of listing markets in Australia’.

The assessment also identified that some listings had a disproportionately large amount of trades occurring off-market following very thin trading on NSX. This activity is likely not unique to NSX so ASIC will separately conduct a wider market review across all Australian equity markets.

Ms Armour said, ‘This review may lead to additional expectations for market operators to deter this activity and to maintain the integrity, quality and strong international reputation of the Australian financial system’.

ASIC will continue to closely monitor NSX’s listing arrangements. NSX has agreed to update ASIC by 31 October 2017 on its progress in addressing the agreed actions and to engage a third party to report on its implementation of the agreed actions to ASIC by 31 March 2018.


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