The Role and Functions of the Australian Securities Exchange

The Australian Securities Exchange (ASX) is an essential component of Australia's financial system, operating as a market operator that facilitates payments between buyers and sellers and informs investors about listing norms. It plays several vital roles: allowing companies to raise capital by issuing shares to the public, ensuring open trading markets for securities, providing systems for transferring ownership, enforcing listing rules including continuous disclosure, and requiring listed companies to inform ASX of significant events like mergers or management changes. ASX functions as a clearing house, facilitating payments and compliance checks, promoting corporate governance standards among listed entities, and educating retail investors. It supervises both domestic and international companies, reviews applications for listings, ensures adherence to listing rules, assists in dematerialization and electronic trading of shares, supports stockbrokers' market access, and maintains records of share ownership. ASX regulates trading norms, monitors insider trading, and enforces compliance through the Australian Securities and Investments Commission (ASIC).

Running head: COMPANY LAW
Company Law
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The Australian Securities Exchange
The Stock Exchange of Australia which helps as a market operator which facilitates the
payments to the buyers and sellers and provides details to all the investors to be aware of the
listing norms. The Australian Securities Exchange offers equities, warrants, ETFs and REITs,
and other securities. The operation of ASX is regulated by the Australian Securities and
Investment Commission (Exchange 2014).
The roles of Australian Securities Exchange are as follows:
In order to ensure that the share market in Australia runs smoothly, the ASX plays an important
role. These are as follows:
1. The Australian Securities Exchange allows the Companies in order to raise funds and capital
for running of the business. The ASX allows the companies and the trusts so that the companies
can issue shares to the general public so that the company is able to raise funds. Once the
company is listed, the investors can trade on the securities of that company.
2. The ASX ensures that the market is open for the investors to trade on the securities of the
Company. The share market consists of the buyers and the sellers who buy and sell their
securities in the exchange. Nowadays the buyers and sellers enter into buy and sell and this is
done electronically. Before the opening of the computerized trading system, the ASX had a
physical location of trading (Basu and Forbes 2014).
3. The ASX provides for a system where ASX helps in the transfer of ownership of the
securities. This is done by computerized system which helps in the transfer of the legal

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ownership of the shares from the sellers to the buyers and thus also helps in the transfer of these
securities.
4. The ASX has set some of the listing rules and regulation so that the companies that are listed
in the stock exchange of Australia follow those rules and regulation. The listing rules affecting
those companies which are operating follows the rule of “continuous disclosure” and thus the
listed companies have to inform any details of the companies which might affect the share price
to the ASX (Exchange 2015).
5. Whenever the listed companies are going for any kind of acquisition or merger and they
release in the financial report, and announce any change in company management. The
companies inform the ASX about the release of the information which is sensitive in the market
(Rose 2014).
The functions of the Australian Securities Exchange are:
The Australian Securities Exchange functions as a market operator and thus functions as
a clearing house and which helps in the facilitation of the payment system. The ASX also helps
in the checking of the compliance and checks whether the companies have followed the rules and
promotes the standards of corporate governance among those listed companies listed in Australia
and it helps to educate the retail investors (Tricker and Tricker 2015).
The companies which are domestic and are internationally located are listed on ASX .It
has issuers such as the Corporations and trust which have a variety of listed securities and
financial products.The most important function of the Australian Securities and Investment
Commission is to supervise the market and to regulate the companies operating in Australia.

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The ASX functions are as follows:
1. In order to review the application by the Companies this is listed on the ASX. This will
include reviewing the companies which is listed on the ASX.ASX will also review the
company’s history and finances.
2. Each of the companies shall abide by or obey the ASX Listing Rules.
3. ASX Supervises the companies which is listed in the Exchange and then the companies take
the approval and obey the rules of the exchange (Smales 2014)
4. The ASX helps in the dematerialization and trading of shares on a computerized or in an
electronic form. The ASX also helps in the review of the application of the stockbrokers and
the reviewing of applications by the ASX Market Participants.
5. The ASX helps the stockbrokers to access in the share market so that they can buy or sell
shares of the company for themselves as well as the customers.
6. ASX also helps in the operation of a system which helps in keeping a record of ownership of
shares (He and Lepone 2014).
The Rules set by ASX are as follows:
In order to regulate the trading ASX governs the trading
 It sets how the buyers and the sellers of the securities are to be treated. When the traders
buy or sell through the broking firm to complete any kind of transaction. The broking
firm enters into the order and ASX regulates the market which is important for the
trading and business.

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 ASIC regulates and supervises the market and they fix the price and various important
things for the companies listed on the exchange. The Australian Securities and
Investments Commission (ASIC) have surveillance and monitor on the market (Lee,
Stevenson and Lee 2014).
The ASX has also set the insider trading norms and regulation for the listed companies which are
listed in the Australian exchange. The directors or the management shall not disclose any
confidential information during the trading period which might have an effect on the share price
and the people are not supposed to trade shares until the market has been informed. People who
break the insider trading norms are charged with high penalty.

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References
Basu, A.K. and Forbes, B., 2014. Does fundamental indexation lead to better risk‐adjusted
returns? New evidence from Australian Securities Exchange. Accounting & Finance, 54(3),
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Exchange, A.S., 2014. Corporate Governance Council, 2014. Corporate Governance Principles
and Recommendations. Available at: http://www. asx. com. au/documents/asx-compliance/cgc-
principles-and-recommendations-3rd-edn. pdf.
Exchange, A.S., 2015. ASX funds (listed managed investments and ETPs) monthly update-
December 2013.
He, W.P. and Lepone, A., 2014. Determinants of liquidity and execution probability in exchange
operated dark pool: Evidence from the Australian Securities Exchange. Pacific-Basin Finance
Journal, 30, pp.1-16.
Lee, C.L., Stevenson, S. and Lee, M.L., 2014. Futures trading, spot price volatility and market
efficiency: evidence from European real estate securities futures. The Journal of Real Estate
Finance and Economics, 48(2), pp.299-322.
Rose, A., 2014. The informational effect and market quality impact of upstairs trading and
fleeting orders on the Australian Securities Exchange. Journal of Empirical Finance, 28, pp.171-
184.

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Smales, L.A., 2014. Non-scheduled news arrival and high-frequency stock market dynamics:
Evidence from the Australian Securities Exchange. Research in International Business and
Finance, 32, pp.122-138.
Tricker, R.B. and Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices.
Oxford University Press, USA.