ASIC Tightens AI Trading Rules: What Firms Must Know
Australia's markets regulator has finalised a significant set of amendments to its Market Integrity Rules (MIRs) that strengthen governance requirements for automated and AI-enabled trading systems. The rules take effect in 2028, following an 18-month transition period, and they carry real implications for accounting firms, auditors, and CFOs whose clients operate or plan to operate algorithmic trading desks, including those touching digital assets. Firms evaluating crypto accounting software to capture and classify high-frequency or AI-driven trade flows should treat this development as a trigger to review their current systems against the incoming obligations.
What ASIC Has Actually Changed
The Australian Securities and Investments Commission published the amended MIRs on 23 September 2026. The reforms target the trading systems and automated trading obligations that apply to securities and futures market participants, and they do three things at once: modernise the ruleset to reflect how markets actually operate today, align Australia's framework with IOSCO principles on algorithmic trading, and simplify the regulatory guidance that practitioners use day to day.
Strengthened algorithm governance obligations
The core change is that market participants must now demonstrably test, monitor, and govern their trading systems and algorithms before and during deployment. That obligation is not new in spirit, but the amendments make it explicit and technology-neutral, covering all algorithms regardless of whether they are rule-based, machine-learning driven, or anything in between. ASIC Commissioner Simone Constant noted that trading on Australian markets is now almost entirely automated and that algorithms can behave in ways that are opaque, unpredictable, and potentially manipulative. The new rules position participants as gatekeepers who are responsible for the behaviour of the systems they run.
Scope of the false or misleading conduct rule
A specific clarification deserves attention: the amendments explicitly bring AI-enabled trading activity within the scope of the existing false or misleading appearance rule. If an algorithm, even one operating without human intervention at the point of execution, creates a false or misleading impression of trading activity, the participant running it is in scope. That is a material shift in how firms should think about AI model oversight and the evidence they retain to demonstrate that their systems did not produce manipulative outcomes.
Guidance consolidation: almost 60% reduction
Alongside the rule changes, ASIC is consulting on updated Regulatory Guide 265 and Regulatory Guide 266. The proposed revisions would incorporate the relevant content from Regulatory Guide 241, which would then be retired. For securities participants, the volume of guidance covering these obligations would fall by close to 60%. That is a genuine simplification, though it requires firms to re-anchor their internal procedures to the consolidated documents rather than the three-guide structure they currently rely on.
The IOSCO Alignment and Why It Matters Cross-Border
One of the stated objectives of the reform is to bring Australia's MIRs closer to the principles published by the International Organization of Securities Commissions on algorithmic trading. For firms operating across multiple jurisdictions, that alignment reduces the friction of running parallel compliance programmes. A trading desk that already meets IOSCO-aligned requirements in another major market will find the Australian obligations more familiar and less costly to absorb.
This international dimension is also relevant for firms assessing their digital asset accounting software. Cross-border algorithmic trading in digital assets generates transaction records in multiple venues and time zones. When those records need to be reconciled against regulatory audit trails, the consistency between jurisdictions' expectations matters. Closer IOSCO alignment makes that reconciliation more tractable, provided the underlying software can capture the required metadata at the point of trade execution.
The parallel with what ESMA is doing in Europe is worth keeping in mind. Read our analysis of what ESMA's AI and tokenization supervisory priority means for firms to see how the global direction of travel on algorithm governance is converging.
Transition Timeline and What the 18-Month Window Means Practically
ASIC originally proposed a shorter transition period. After industry consultation, it extended this to 18 months, with the rules commencing in 2028. That additional time was granted to give participants a realistic window to implement the changes without cutting corners on the integrity objectives the reforms are designed to achieve.
Why 18 months is not as long as it sounds
For a firm running complex algorithmic strategies, 18 months to upgrade governance frameworks, update testing protocols, retrain staff, and align the crypto bookkeeping software or digital asset accounting software that captures trade data is a reasonable but not generous runway. The sequence typically runs: gap analysis against the new rules, vendor engagement for system changes, internal policy drafting, staff training, parallel running of old and new controls, and then sign-off. Each step takes longer than anticipated when it involves live trading systems and regulatory documentation.
ASIC's concurrent guidance consultation
ASIC is running a separate consultation on the updated RG 265 and RG 266 guidance concurrently with the transition period. That means the detailed practical interpretation of the rules is still being finalised. Firms should track both the rule text and the guidance consultation, because the guidance is what practitioners, auditors, and compliance teams will rely on when assessing whether a specific algorithmic control is adequate. Submitting to the consultation, or at least monitoring responses, is worthwhile for any firm with meaningful algorithmic trading exposure.
Accounting and Audit Implications
The MIR amendments are market conduct rules, not accounting standards. But they have direct consequences for how accounting firms serve clients in this space and for how CFOs at trading firms structure their internal controls and financial records.
Audit trail and recordkeeping requirements
Demonstrating compliance with the testing, monitoring, and governance obligations requires documentary evidence. That evidence includes records of pre-deployment testing, ongoing monitoring outputs, incident logs when algorithms behave unexpectedly, and governance sign-offs. For firms that use automated trading systems to execute transactions in securities or digital assets, those records also need to be reconcilable with the trade-by-trade data held in their accounting systems. A gap between the compliance record and the accounting record is a red flag in any audit. Accounting firms advising these clients should check that their clients' crypto accounting software or digital asset accounting software is capable of capturing and retaining the metadata that compliance teams will need.
Classification of AI-related costs
The reforms will prompt investment in governance infrastructure: upgraded testing environments, monitoring dashboards, staff training, and potentially new or enhanced trading system vendors. CFOs need to think carefully about how those costs are classified. Development costs associated with internally generated software may qualify for capitalisation under AASB 138, while ongoing maintenance and training costs are typically expensed. Getting that classification right from the start avoids restatement risk and keeps the financial statements audit-ready.
The false or misleading conduct risk and financial reporting
If a firm's algorithm is found to have created a false or misleading appearance of trading activity, the consequences go beyond a regulatory fine. Depending on the nature of the activity, there may be revenue recognition questions, potential restatement obligations, and disclosure requirements in financial statements and audit reports. Accounting firms should be raising these scenarios with clients now, during the transition period, rather than after an enforcement action has crystallised the exposure. For broader context on how market structure reforms can reshape accounting obligations, see our piece on how the Clarity Act's Senate failure reshapes crypto accounting obligations.
Practical Steps for Accounting Firms and CFOs
The 2028 commencement date creates a structured window to act. The following steps are grounded in what the ASIC release actually requires, without extrapolation.
For accounting firms advising market participants
Start by identifying which clients are caught by the MIR obligations, which covers securities and futures market participants. For those clients, map their current algorithm governance documentation against the new obligations, particularly the explicit testing and monitoring requirements. Assess whether their current crypto accounting software or digital asset accounting software produces records that are compatible with the audit trail the new rules demand. Flag the false or misleading conduct clarification to any client running AI-driven strategies, and ensure their legal and compliance teams have reviewed the implications. Monitor ASIC's guidance consultation on RG 265 and RG 266 and update client advice as the final guidance is published.
For CFOs at affected trading firms
Commission an internal gap analysis against the amended MIR obligations before the end of 2026, while the transition window is still relatively wide. Engage your algorithm development and technology teams to understand what pre-deployment testing currently exists and whether it meets the standard that the new rules will require. Review your accounting system's capacity to capture trade-level metadata and link it to compliance records. Build the cost of the transition, including any necessary system upgrades, into budget planning for 2027, and ensure the classification of those costs is agreed with your auditors early.
Frequently Asked Questions
Who is directly subject to the amended Market Integrity Rules?
The rules apply to securities and futures market participants operating on Australian markets. That covers broker-dealers, investment banks, and other licensed entities that execute trades, whether on behalf of clients or on a proprietary basis.
Do the new rules apply to digital asset trading specifically?
The amendments are technology-neutral and cover all trading algorithms, including those used in markets where digital assets are traded under an Australian market licence. The scope depends on whether the venue and the participant are subject to the MIRs, not on the asset class itself.
What does the false or misleading conduct clarification actually change?
It confirms that the existing prohibition on creating a false or misleading appearance of trading extends to situations where that outcome is produced by an AI-enabled or other automated system, even without deliberate human intent at the point of execution. Participants cannot use algorithmic autonomy as a defence.
How should firms think about the guidance consultation on RG 265 and RG 266?
The updated guidance will be the practical reference point for compliance teams and auditors assessing whether algorithm governance controls are adequate. Firms should review the consultation documents, consider submitting feedback if they have specific operational concerns, and plan to update internal procedures once the final guidance is published.
What should a firm's crypto accounting software be able to do to support compliance?
At a minimum, the system should capture trade-level data including timestamps, order identifiers, and execution venue details, in a way that can be linked to the algorithm or strategy that generated each trade. That linkage is what allows compliance documentation and accounting records to be reconciled, which is the foundation of any audit trail under the new obligations.