6.2 Mandatory platform trading

For trading platforms it is proposed that no decision be taken on any mandatory requirements until subsequent reviews by the regulators.

The regulators did not make a recommendation regarding a mandatory platform trading obligations in the Report. The regulators will continue to monitor developments in other jurisdictions and seek more detailed information on activity in the Australian market, to more clearly define the characteristics of suitable trading platforms.

The Government is reviewing the licensing arrangements for financial markets. This review will consider whether the framework is adequate to deal with the derivatives trading platforms that would be suitable for mandatory trade execution. As part of this review, the Government is considering the impact of potential foreign registration requirements for Australian markets.

One thought on “6.2 Mandatory platform trading

  1. GreySpark Partners

    Given the state of electronic platform trading globally, it is important to provide the local market with a platform that offers both Request-For-Quote (RFQ) and Central Limit Order Book (CLOB) functionalities so that participants may utilise them as required in the long term. Currently, the RFQ model has been much more prevalent in the global OTC markets so it is likely that the CLOB model will not be utilised widely for some time to come.
    Pre-trade and post-trade block allocation should also be offered by the platform. Connectivity to credit hubs may also be an important factor, as not many clearing brokers will wish to update their limits at the trading platform directly. The ability to provide sponsored access versus direct access is also key, as smaller market participants will choose sponsored/agency access for ease of trading and to limit their costs.

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