The corporate regulator has suggested changes to the largely unregulated corner of the sharemarket where trades take place away from the public exchange.
But high-speed traders will be largely free to keep operating the way they have been, with few signs markets are being manipulated.
The Australian Securities and Investments Commission on Monday released its report on the impact of high-frequency trading and "dark pools" on local financial markets.
It comes after two taskforces were set up in June last year to investigate concerns that high-speed traders and dark liquidity were impairing market integrity.
ASIC found that fears about high-frequency traders in Australia appeared to be exaggerated.
"There is a belief by some that high-frequency trading is manipulative in a legal sense, or at least predatory in nature, and there is a perception that high-frequency traders uniformly lave less regard for market integrity," the report says. "That perception is not supported by our study."
However, ASIC has suggested sweeping changes to the areas of the market, referred to as "dark pools" or "dark exchanges", that lack transparency.
Chief executive of the Australian Securities Exchange Elmer Funke Kupper said he welcomed the direction in which ASIC was going on dark liquidity, especially the proposals for greater transparency and better client information, and the examination of a minimum size threshold trigger for dark orders.
"When it comes to tick sizes we understand that there is judgment involved between promoting lit markets and making sure that HFT doesn't become a serious issue in Australia. Given that the current settings are working well, ASX believes a cautious approach should be adopted to any further change," Mr Funke Kupper said.
"ASX agrees that we're seeing too many small orders today and that this needs to be better controlled. However, imposing minimum resting times is not an efficient or cost-effective way to control this issue. In our submission we'll present some alternatives."
The regulator said on Monday the market has little information about the "existence, nature and operation" of these trading venues.
When information is available, it "varies greatly in its detail, is not necessarily made available in a timely or consistent manner and is selective in nature."
"There are currently no rules in place to require crossing system operators to disclose to the market, and therefore the potential users of crossing systems [such as dark pools] key information about their facility," ASIC's report says.
"This is out of step with the International Organisation of Securities Commissions' 'Principles for Dark Liquidity', which gives considerable guidance on what minimum expectations should be for 'dark pools'."
The report has been broadly welcomed by market participants and industry groups.