ASIC uses data analytics to assist with policy formulation at all stages of its development. The use of data analytics ensures that our policy decisions are based on identifiable and measurable market outcomes. This enables us to better detect, understand and respond to market issues.
Over the past five years, we have used data analytics to inform major markets policy projects, including:
- market competition reforms (Report 215 Australian equity market structure);
- market structure reforms (Report 311 Response to submissions on CP 179 and CP 184 Australian market structure: Draft market integrity rules and guidance); and
- dark liquidity and high-frequency trading taskforces (Report 331 Dark Liquidity and high-frequency trading (REP 331)).
Using data analytics also assists us to conduct post-implementation reviews of policy changes to ensure that intended outcomes are being achieved and that initial policy concerns no longer remain.
Although data analysis may provide a sound basis for decision making it is not a substitute for consultation. Each of the policy initiatives we have taken has been accompanied by consultation with industry. This includes formal consultations, as well as soft soundings and workshops.
Other regulatory tools ASIC relies on to ensure our financial markets are fair and efficient include: surveillance, enforcement activity, stakeholder engagement, guidance and education. The depth of our regulatory toolkit ensures that financial investors and consumers can be confident in the integrity of our markets.