Enhancing trading of hedge products decisions paper published
We have published a decision paper on enhancing trading of hedge products. As previously announced, we have decided to pursue the development of a cap product as a primary priority and to pursue further development of existing ASX products as a secondary priority.
We will work with interested parties over the next six months to identify appropriate cap product designs, a trading platform and approaches to facilitate trading. We consider that developing a cap product is an important next step for the hedge market. Robust and regular pricing of standardised cap products would provide price signals that assist parties to make efficient investment decisions and provide an improved mechanism for managing price risk. It could also lead to improved retail competition as retailers would be able to make more efficient use of the capital required to serve their customers.
Our preference is that the development of robust and regular pricing of standardised cap products is achieved through a voluntary approach. Should the voluntary approach not prove to be feasible, we will consider developing either an incentive based or a mandatory approach.