Fair, orderly and transparent. These were the key words
when ASIC Chairman Greg Medcraft commented on ASIC's
enforcement goals amid the Oliver Curtis media blitz. Throw in the
regulator's proceedings against a number of major banks around
bank bill swap rates and it's clear where ASIC's focus lies
with regard to enforcement right now.
This commitment to pursuing misconduct and the importance of
deterrence appears loud and clear, courtesy of the
ASIC Report on enforcement outcomes. There has been a marked
increase in criminal charges and a dramatic rise in infringement
The number of criminal charges laid has gone up by almost 129%
compared with the previous six months. The rise is even greater in
terms of infringement notices – a 275% jump compared to the
second half of 2015. At the same time, the value of compensation or
remediation paid has significantly reduced by over 90%.
However, this may potentially be explained by the timing of
settlements and other claims resolutions.
ASIC's 'report card' for the first half of this year
also outlines its focus for the next six months:
Market Integrity - Concentrating on disclosure
obligations and market abuse.
Corporate Governance - Making sure
'gatekeepers' comply with the law. For example, particular
focus will be placed on issues such as poor corporate culture,
failure to respond appropriately to threats of malicious cyber
activity and improper transactions in the face of insolvency.
Financial Services - Ensuring the Future of
Financial Advice reforms are complied with and lifting the
standards of major financial advice providers in the context of
ASIC's Wealth Management Project (action has been taken in
relation to six large banks in connection with the Wealth
So, no real change in scope and focus, given these three areas
are the same as those previously signalled for the first half of
the year. It should be noted, however, that the detail of the
corporate governance focus area has shifted slightly.
THE KEY STATISTICS
Comparative table of ASIC 'summary of
Number / Value* (1 Jul - 31 Dec 2015)
Number / Value ** (1 Jan - 30 Jun 2016)
Persons charged in criminal proceedings
Criminal charges laid
Individuals removed from financial services
Infringement notices issued
Infringement notices paid (value)
WHAT TO EXPECT?
Earlier this year, ASIC's chairman stated that additional
funding would enable the regulator to carry out further
surveillance and enforcement in financial planning, responsible
lending, life insurance and misconduct and breach
reporting.1 While it has only been a few months since
that increase in funding was announced, the marked increase in
criminal charges laid and the rise in infringement notices could be
a sign of things to come.
1 Greg Medcraft, 'Building trust and
confidence: ASIC priorities' (Speech delivered at the
Annual Stockbrokers Conference, Melbourne, Australia, 2 June 2016);
Greg Medcraft, Senate Estimates: Opening Statement, 6 May
* Source: Australian Securities and Investments
Commission, Report 476: ASIC enforcement outcomes: July to December
2015, released 30 March 2016.
** Source: Australian Securities and Investments
Commission, Report 485: ASIC enforcement outcomes: January to June
2016, released 8 August 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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