May 14, 2020 / 8:04 AM / 2 months ago

Australia's securities regulator ends trading limits as market calms

SINGAPORE, May 14 (Reuters) - Australia’s securities regulator removed limits on the number of daily trades big brokers can execute on Thursday, lifting a rule imposed after a spike in volume exceeded processing capacity two months ago.

The Australian Securities and Investments Commission (ASIC) said the rule, which required nine top brokers to cut daily volumes by a quarter from a March 13 peak, was no longer necessary as clearing capacity had been increased and markets had stabilised.

Panic selling doubled the value and volume of trade on the Australian Securities Exchange in March - the worst month for Australian stocks since 1987.

“On 13 March 2020, the equity market exceeded the number of trades that could be reliably processed on a single day,” ASIC said on Thursday. The spike did not cause any outages.

ASIC said there remains a “real risk” that such levels could be exceeded again, and though it has lifted the volume limits, said it expects all market participants to minimise excessive use of small orders and manage their own trading volumes.

ASX Ltd, which operates Australia’s primary stock exchange said it was appropriate to remove limits given the reduction in extreme volatility.

Reporting by Tom Westbrook; Editing by Christopher Cushing

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