ASIC placed the limits on Monday with the aim to ensure Australian equity markets remain resilient.
It issued the directions under the ASIC Market Integrity Rule requiring firms to reduce the number of trades executed by up to 25 per cent from the levels seen on Friday.
ASX managing director and chief executive Dominic Stevens said the action was “sensible and measured”, with recent trading volumes on both the ASX and Chi-X being “unprecedented”.
Chi-X also supported the move, saying the measures are “for the time being, an appropriate response to the recent exceptional volumes and the potential issues they may raise across the Australian market.”
“This has presented operational challenges for the industry – albeit the industry has worked together to ensure it has been able to function in these extraordinary circumstances,” Mr Stevens said.
“We recognise today’s action by ASIC is only the first step, and that more consideration needs to be given to a permanent solution. The industry cannot provide unlimited capacity at short notice.
“Regulators, exchanges, participants and investors will need to come to a decision on what they want for the future.”
He added the ASX will continue to collaborate with the industry.
“In addition to the steps we have taken to successfully complete our own operational processes during this period of heightened activity, we have worked closely with other market operators and participants to help them complete their operational processes,” Mr Stevens said.
“ASX shares the regulator’s determination to maintain confidence in the integrity of Australia’s financial markets and we will continue to cooperate with ASIC, other market operators and market participants.”
The local share market bounced back after tanking on Monday, with the S&P/ASX 200 benchmark rising by 2.92 per cent to 5,132.1 points at 2.15pm on Tuesday.
It had seen its largest one-day decline on record, with the index closing Monday 9.7 per cent down at 5,129 points.
