Australian Stock Exchange (ASX) Insider Trading Surveillance

The Australian Stock Exchange (ASX) will strengthen its surveillance of insider trading and simplify its operating rules following a wide-ranging review into its role as market supervisor.

In changes expected to cost about $10.4 million over the next three years, the listed exchange will also set up a separate subsidiary company to conduct its supervisory functions.

The ASX said on Thursday it would bump up annual listing fees from July 1 next year to cover the cost of some of the changes.

ASX chief executive Tony D'Aloiso said the measures would create a more independent supervision structure.

"We are providing more resources to strengthen investigation and enforcement, and we are creating a demonstrably more independent operational structure for supervision," Mr D'Aloiso said.

The ASX plans to set up a specialist insider trading unit within its surveillance division in March next year to improve its supervision of companies listed on the bourse.

And in a bid to minimise the conflict between its regulatory and commercial functions, it will set up a new supervision subsidiary by July 1.

Under the changes, the current head of market supervision will become the chief supervision officer, reporting to the board of the subsidiary company.

In addition, the bourse said it would rewrite and simplify its market and listing rules, still following a principles-based model, to lower compliance costs and boost its ability to maintain an attractive low cost of capital.

ASX also has separated regulatory policy-making from supervision and enforcement through a new regulatory policy unit.

In its trading, clearing and settlement operations, the ASX also has adopted a new pricing policy, which is predominantly value rather than volume-based.

The exchange said this would make it more competitive and bring it closer in line with regional exchanges such as Hong Kong, Tokyo and Singapore.

The new pricing structure is due to be introduced on July 1 next year.