ASX AQUA Product Name Conventions

On Jun. 7, ASX proposed rule amendments re AQUA product naming.

  • AST APRA published Consultation paper - rule amendments: AQUA product naming conventions, which sets out proposed amendments to ASX operating rules (ASXORs).
  • Published ASX settlement operating rules, in order to facilitate implementation of AST ASIC’s updated exchange traded product (ETP) naming expectations in the revised Information sheet 230 exchange-traded products - admission guidelines (INFO 230).
  • Follows AST ASIC Jan. 2022 proposed revised ETP naming conventions, see #126935.
  • Proposals
  • In addition, the proposed amendments are being made to provide a clear transitional framework for existing AQUA product issuers for the migration of existing AQUA products to the new rules; and make other consequential structural enhancements.
  • Plus, to make tidy-up amendments to schedule 10A of the ASXORs (AQUA rules).
  • The proposed rule amendments are set out in attachment A as well as attachment B.
  • Expected Impact
  • ASX expects that the naming convention updates to INFO 230 and the proposed amendments in this consultation paper will primarily impact AQUA product issuers.
  • Namely, those product issuers that issue managed fund products admitted to trading status (ETMFs) since those products will be re-categorized as ETFs under the proposed amendments, although AQUA product issuers that issue ETFs will also be impacted.
  • Next Steps and Regulatory Clearance
  • ASX is planning to release its response to this consultation in Nov. 2023, subject to feedback received; final rules package after regulatory clearance processes completed.
  • Said proposed amendments in paper will be the subject of further engagement with regulatory agencies as part of normal regulatory clearance process for rule changes.
  • Subject to regulatory clearance, ASX plans to have finalized the form of the rule amendment package and to release to market final rules package in mid-Mar. 2024.
  • At least one month’s notice of final rule changes will be provided before new rules effective; final form of rule amendments expected to become effective mid-Apr. 2024.
  • Consultation End
  • The comment period for this consultation closes on Jul. 19, 2023.
  • Jun. 2023 ASX Comments
  • On Jun. 7, 2023, ASX published notice with respect to the consultation outlined above regarding AST ASIC’s updated exchange traded product (ETP) naming expectations.
  • Notice includes overview of proposed amendments, instructions re providing feedback.
  • Nov. 2023 ASX Response and Next Steps
  • On Nov. 30, 2023, ASX notified of release of Response to consultation feedback - rule amendments: AQUA product naming conventions, being its response to consult above.
  • Response contains, at attachment A, a summary of the feedback received and ASX's response, includes, at attachment B, updated amendments to ASX operating rules.
  • Plus, attachment C, which shows updated ASX operating rule procedure amendments.
  • Amendments in attachment B and attachment C take into account feedback received.
  • ASX received one submission from the AST FSC and no confidential submissions.
  • It said the updated amendments include the definition of exchange traded fund (ETF) in ASX operating rule 7100; as well as the description of the basis of valuation for the total as and net flow of funds disclosure in the procedure to AQUA rule 10A.4.1(f).
  • ASX reminded that subject to regulatory clearance, ASX plans to release to market the final rules package in mid-Mar. 2024 (i.e. Mar. 15, 2024); and it also reminded that the final form of the rule amendments are expected to become effective in mid-Apr. 2024.
  • In Dec. 2023, Cboe AST proposed amendments re naming conventions, see #194638.
  • Mar. 2024 Amendments Confirmed
  • On Mar. 14, 2024, ASX said amendments to the ASX operating rules, ASX operating rules procedures, and ASX settlement operating rules received regulatory clearance.
  • Amendments unchanged from the form of amendments included in response to the above consultation, other than identifying their commencement date as Apr. 15, 2024.
  • Apr. 2024 Guidance Note and Other Material
  • On Apr. 8, 2024, ASX issued notice regarding the amendments above, and it released Operating rules - guidance note 17 - AQUA product labels and naming considerations.
  • Guidance note takes effect Apr. 15, 2024, it was drafted to assist issuers of existing and prospective AQUA products to understand the new AQUA rules relating to product labelling, and ASX’s approach to assessing whether an ETP is generally true-to-label.
  • An aim of new naming conventions is to ensure consistency of application of product labels for all exchange traded products admitted to Australian securities exchanges.
  • AQUA Product issuers must consider if they need to make changes to names of their existing AQUA Products and, if so, make those changes within migration period.
  • Migration period ends Apr. 15, 2025; existing AQUA Product issuers should reach out to ASX Investment Products Compliance early to determine if names require changes.
  • ASX expects that AQUA Product issuers who change the name of an existing AQUA Product will lodge an ASX market announcement via market announcements platform.
  • Together with an updated disclosure document and a short summary explaining the name change to assist recipients in understanding the reason for the change.
  • ASX will reflect name changes and descriptors in ASX systems accordingly; notice includes further particulars re changes to admission status; conditions of admission and approval; and it also includes link to information for AQUA Product applicants.
  • Including revised AQUA Product issuer, ETF securities, structured products application forms and checklists, and Legal certification template (annexure B2) regarding same.

Regulators ASX
Entity Types B/D; Corp; Exch; IA
Reference Form, Gd GN17, Nt 0343.24.04, 4/8/2024; Nt 0254.24.03, 3/14/2024; Nt 1281.23.11, Rsp 11/30/2023; CP, Nt 0541.23.06, 6/7/2023; Citation: ASX operating rules; ASX settlement operating rules; INFO 230;
Functions Advertising; Compliance; Legal; Product Administration; Reporting; Sales Practices; Settlement; Trading
Countries Australia
Products Derivatives; ETFs; Fund Mgt; Structured Products
Regions AP
Rule Type Final
Rule Date 6/7/2023
Effective Date 4/15/2024
Rule Id 175269
Linked to Rule :126935
Reg. Last Update 4/8/2024
Report Section International

Last substantive update on 04/10/2024