they are performing as expected. in turbulent times, it is a human trader who makes the discretionary call as to whether to turn off the trading model if it has not already ceased trading. on market integrity and competition : many of the “ predatory ” or “ unfair ” practices attributed to hft, in light of their technology - driven ability to detect orders and take advantage of latencies, are in fact not new. hft is but the latest high - tech, highspeed manifestation of them. turning to regulation, hft in fx is subject to three levels of self - regulation. in addition to hft firms ’ own risk controls, there is also monitoring by prime brokers. one significant concern we document in the report is whether the prime brokers are technologically capable of keeping up with their hft clients or have the financial incentives to do so appropriately. furthermore, trading platforms also have rules to help foster an orderly and fair trading environment, but the nature and severity of such rules varies across platforms. thirdly, the foreign exchange committees in a number of jurisdictions are currently considering implementing enhanced codes of conduct which aim to address the market integrity issues raised by the increased presence of hft. finally, an interesting question to ask, but not addressed in the report, is whether hft is a socially efficient use of resources. one can ask this question of a number of fields which adopt cutting - edge technology, such as formula 1 racing or america ’ s cup sailing, where the social benefits are not always immediately apparent, but have led to technological bis central bankers ’ speeches improvements that have benefited society. it is not clear that the quest for trading speed, in and of itself, is socially beneficial. but perhaps the more pertinent way to pose the question is to ask instead, whether hft is harmful. one of the purposes of the markets committee ’ s report has been to provide a set of facts with which one can try to answer that question. in sum, hft in fx is a rapidly evolving phenomenon. it is having a notable effect on the structure and functioning of the fx market. it is causing behavioural changes in other market participants that may have an impact on the resilience of the system as a whole. while it may be the case that the impact of hft on market functioning is generally benign, hft does require ongoing monitoring to ensure this remains the case. the monitoring currently is done predominantly by the prime brokers and the trading platforms. there is

around and make electronic payments more easily. the bank is building part of the infrastructure that stands at the centre of this new system that will allow funds to be exchanged instantaneously so that customers can have very quick access to their funds. our work is on schedule and is now being used in industry testing. financial institutions are also working hard on their internal systems so that customers can take advantage of the new system. developments look to be on track to allow the first payments to be made through this new system towards the end of the year. a related focus of the payments system board is the important role that new technologies can play in promoting efficiency and competition. in recent meetings the board has discussed the opportunities that distributed ledger technology could offer in the payments system and in financial market infrastructures. and it is also interested in the potential for fintech to deliver improved customer experiences. the board is therefore taking a keen interest in the work being done by the australian payments council on digital identity and customers ’ access to their banking and payments data. i hope that you have all come across the new $ 5 banknote, which was issued by the bank from early september last year. the note was well received by the community. you might also have noticed that last friday we released the design for the new $ 10 banknote. like the new $ 5, the new $ 10 will have world - leading security features, including the clear top - to - bottom window and a rolling colour effect that changes as the banknote is tilted. it will also have two raised bumps to assist people with vision impairment. just like the current $ 10 note, the new note will feature two 3 / 4 bis central bankers'speeches of australia ’ s most famous writers, dame mary gilmore and banjo paterson. the printing presses are busy printing the new notes and they will be issued from september this year. we are also finalising the design of the new $ 50 banknote, which we plan to issue next year. one other matter that i would like to bring to your attention is that we are in the process of commissioning an external review of the efficiency of our operations. we want to make sure that we are continuously improving as an organisation and we are seeking outside assistance to identify opportunities for improvement. the review will be focused primarily on operational and administrative matters and not on our policy frameworks. it will commence within the next month and i will be in a position to share the key conclusions with the committee when we meet later in the year.