ASX focuses on two areas of market manipulation

While the stock market had little control over GameStop’s shares, it was forced to intervene after Australian GME Resources, which was unfortunate enough to share the same ticker, climbed more than 100% on the market. ASX.

The ASX compliance team has done the least they can, halting trading in the stock and issuing a price request, but the measures have highlighted new issues facing the exchange in a context of growing involvement of retail investors.

“We have obviously refreshed our processes, but in reality the key from a compliance standpoint is to ensure that there is a fair, orderly and transparent market and that that market is fully informed.” said Ms Ryan.

“It’s about going through our normal procedures for unexplained price movements and potentially suspending trading while we ask if we need it.”

Focus on pumping

She said GameStop-wide short squeeze was unlikely to happen on the ASX, but the compliance officer stressed the need to focus on other forms of market manipulation.

“Our main focus is really on ramp-up ads and businesses using the marketplace ad platform to grow,” she said.

“We worked a lot on reviewing the ads before they were published to make sure they were correct where we could, reviewing the ads, interacting closely with businesses with query letters or in behind the scenes and potentially facilitating disclosure or retractions. if they are needed.

Promotion of third-party stocks

Ms Ryan said the growing use of companies promoting shares by third parties was also under scrutiny.

“This is an area where we work in close collaboration with ASIC [the Australian Securities and Investments Commission] given that our mission there is to really focus on what’s going on through the marketplace ad platform, ”she said.

“But we’ve been working closely with ASIC throughout the pump and dump area so far, especially with social media or other apps used during the year. “

The regulator does not issue empty threats. In December, ASIC sued Tyson “ASX Wolf” Scholz, the famous Gold Coast stock trader, claiming he had provided stock advice without financial authorization.

Ms Ryan said the exchange is also exploring ways to support the growing number of retail investors and speculative traders entering the market.

“We’re looking at how we interpret things differently and again, working very closely with ASIC on these things, particularly focusing on what is within our purview and what we can control.

“But we’re talking more actively and engaging actively with ASIC on the rest as well. As with everyone else, we’re thinking about how we can think differently in this space while still recognizing the powers of ASX.

Pumping stocks has been just one area of ​​focus for the compliance division, which has also had to contend with an increase in initial public offerings and other listing activity, drawing criticism from its detractors.

“It has been another huge year for us,” Ms. Ryan said. “The volume, in general, has been very high with IPOs, mergers and acquisitions and secondary fundraising also booming.”

Volume has yet to show signs of slowing down. “I think we have 16 or 18 announcements in January, which is usually a quieter month and so it’s a lot more volume than what we would normally see, so I think these volume issues will continue,” he said. she declared.

About Nicole Harmon

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