ASIC Enforcement Review - Government Response
The Government agrees, or agrees-in-principle, with all 50 recommendations of the ASIC Enforcement Review Taskforce.
What you need to know
- The Australian Government has responded to the ASIC Enforcement Review Taskforce Report
- The Australian Government agrees, or agrees-in-principle, with all 50 of the recommendations made in the Report
- Implementation of a number of the recommendations will be deferred to account for findings arising from the Royal Commission.
ASIC Enforcement Review Taskforce
The ASIC Enforcement Review Taskforce (Taskforce) was established to review the enforcement regime of the Australian Securities and Investments Commission (ASIC), including the suitability of the existing regulatory tools available to ASIC. The Taskforce was also charged with reviewing legislation dealing with corporations, financial services, credit and insurance, and the adequacy of existing enforcement mechanisms and penalties under those laws.
The Taskforce released the ASIC Enforcement Review Taskforce Report (Report) to the Australian Government (Government) in December 2017. The Report takes into account industry and community consultation, and submissions received in response to several position papers published by the Taskforce.
The Report is divided into eight chapters and makes 50 recommendations.
Government response
On 16 April 2018, the Government responded to the Report, by agreeing, or agreeing-in-principle, with all 50 recommendations made by the Taskforce. The Government will seek to implement some of the recommendations promptly, including:
- recommendations to increase significantly the financial penalties which may be imposed on corporations and individuals in civil penalty proceedings;
- to implement an infringement notice regime; and
- to enhance ASIC's investigative and enforcement powers.
Implementation of a number of the recommendations will, however, be deferred so as to be informed by the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission). These include the recommendations relating to:
- significant breach reporting;
- the recognition and enforcement of industry codes; and
- the expansion of ASIC's directions powers.
Given that the final report of the Royal Commission is not due until 1 February 2019 (and the government has indicated it will grant an extension if requested by the Commissioner), it will be some time before the full suite of amendments is in effect.
Below is a summary of the Government's responses to the Report's recommendations in each of the eight key areas:
| Report Recommendations | Government Response |
|---|---|
|
Self-reporting of contraventions by licensees Key recommendations include:
|
The Government agrees-in-principle with all 10 of the recommendations in this category but will defer implementation of the recommendations pending the outcomes and findings of the Royal Commission. |
|
Harmonisation and enhancement of search warrant powers Key recommendations include:
|
The Government agrees with each of the six recommendations, and will develop legislative amendments to implement each of the recommendations. |
|
ASIC's access to telecommunications intercept material Recommendation 17 provides that ASIC should be able to receive telecommunications intercept material to investigate and prosecute serious offences. |
The Government agrees with this recommendation, and will develop legislative amendments to implement this change. |
|
Industry codes in the financial sector Key recommendations include:
|
The Government agrees-in-principle with each of these recommendations but will defer implementation of the recommendations pending the outcomes and findings of the Royal Commission. |
|
Strengthening ASIC's licensing powers Key recommendations include:
|
The Government agrees with each of the recommendations in this area, and will develop legislative amendments to implement each recommendation. |
|
ASIC's power to ban individuals in the financial sector Recommendations 30 to 31 are:
|
The Government agrees with each recommendation. The Government will develop legislative amendments to give effect to each of these recommendations. |
|
Strengthening penalties for corporate and financial sector misconduct Key recommendations include:
|
The Government agrees with recommendations 32 to 39 and 41 to 45. In relation to recommendation 40 (to substantially increase the civil penalties which may be imposed on corporations and individuals), the Government has accepted ASIC's submission for civil penalties, but gone further in relation to individuals, proposing that the maximum civil penalty for individuals be the greater of 5,000 penalty units (double that recommended by the Taskforce), or three times the value of benefits obtained or losses avoided. |
|
ASIC's direction powers Key recommendations include:
|
The Government agrees-in-principle with each of these recommendations but will defer implementation of the recommendations pending the outcomes and findings of the Royal Commission. |
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