Why ASIC is determined to provide a fair go for Australian investors

Key findings include:

• Compared to global peers, we have less than half the amount of unusual trading ahead of merger and acquisition announcements
• The two periods of deterioration were during the COVID-19 pandemic when global markets experienced high market volatility and trading, and again in late 2023 as corporate activity increased
• Nearly 5% (4.75%) of trading volume ahead of material price sensitive announcements was anomalous/abnormal
• Telcos were the ‘cleanest’ sector, real estate was the ‘least clean’ sector
• Australia’s markets had 55% less price ‘run ups’/spikes ahead of M&A than our global peers

The article below was written by Calissa Aldridge, Executive Director – Markets, ASIC

Managing inside information

All industry participants – including listed companies, investors, bankers, brokers and other advisers – have a key role to play to support market cleanliness. Inside information needs to be handled with care, with limits around who has access to it. This needs to be supported by robust policies and practices, and action should a leak occur. All industry participants have a part to play in promoting integrity in Australian financial markets.

Casually sharing a hot tip might lead to ASIC scrutiny of your insider lists, and may lead to fines or prison time.

ASIC’s award-winning surveillance and detection capability

We continue to look at innovative data science tools for market surveillance, such as artificial intelligence and machine learning. This will strengthen our ability to detect forms of insider trading not driven by announcements, such as front running.

Our real-time trade surveillance data, expertise, and tools can automatically hunt for and detect suspected market misconduct. It won ASIC the Australian Public Service Data Analytics and Visualisation Award last year.

Former corporate adviser Cameron Waugh was sentenced to two years’ imprisonment for insider trading offences following our surveillance and investigation, and was the first person to be sentenced and imprisoned in Western Australia under the new penalty provisions for insider trading.

Insider trading is not a victimless crime. It hurts investors on the other side of the trade, impacts share value and superannuation balances, and harms all Australians by increasing the cost of raising capital to the detriment of our economy.

ASIC has the systems, people and powers to detect and prosecute insider trading and will not hesitate to take action.

We are committed to ensuring that Australia’s markets remain among the cleanest and most transparent in the world. We remain vigilant.

 Calissa Aldridge's biography

Calissa leads ASIC’s Markets Group, which manages the end-to-end process for regulating markets. This includes supervision, investigation and enforcement for market infrastructure, market intermediaries, corporate finance activities and trading on exchange and over-the-counter markets.

Since 2009, Calissa has had senior leadership roles at ASIC in Market Supervision and Market Infrastructure. Before joining ASIC, she held roles at the Royal Bank of Scotland in London, the UK Financial Services Authority (now the Financial Conduct Authority), Markit, and the Australian Treasury.