ASIC’s penalty structure lags globally
Australia’s corporate regulator is severely limited in the range and severity of penalties it can hand out for wrongdoing - particularly compared to the US and UK, a review has concluded.
The Australian Securities and Investments Commission (ASIC) could be letting the public down due to its restrictions on prison terms and fines, the regulator’s first penalty structure review in more than a decade has concluded.
US regulators are able to dole out significantly longer prison terms for similar crimes, the review found, with sentences of up to 20 years for insider trading, market manipulation and fraud.
In Australia, ASIC can inflict maximum prison terms of up to 10 years, which places it on a par with Canada and Hong Kong.
However, when it came to individual fines, penalties for crimes like disclosure and unlicensed conduct are capped at $34,000, compared with more than $5 million for Canada and the US, or unlimited in the UK.
Unlike its global counterparts, ASIC also does not have a disgorgement penalty at its disposal, which would force wrongdoers to pay back penalties earned dishonestly.
Commenting on the review, ASIC chairman Greg Medcraft said: “The public expects ASIC to take strong action against serious corporate wrongdoers. Those who break the law and cause severe damage should face tough penalties”.
The findings from the REP 387 review will be presented to the Financial System Inquiry.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
