ASIC wants penalties that fit crime
The Australian Securities and Investments Commission (ASIC) has signalled it wants more scope to ensure that the penalties it imposes reflects the level of wrong-doing it prosecutes.
The call has been made by ASIC chairman, Greg Medcraft, who claimed to financial services lawyers that, comparatively, the maximum civil penalties available to the regulator in Australia were lower than those available to other regulators internationally.
Further, the ASIC chairman said that the penalties available to ASIC were "fixed amounts, not multiples of the financial benefit obtained from misconduct".
Medcraft said that in order to regulate for the real behaviour of gatekeepers in the system, penalties needed to be set at an appropriate level.
"… we need a range of penalties available, to act as a deterrent to misconduct," he said. "Penalties set at an appropriate level are critical in the ‘fear versus greed' calculation of the potential wrongdoer."
Medcraft said penalties needed to give market participants the right incentive to comply with the law and that they should aim to deter contraventions and promote greater compliance, resulting in a more resilient financial system.
The ASIC chairman also spoke strongly in favour of ASIC having a product intervention power, claiming it would give ASIC a greater capacity to apply regulatory interventions in a timely and responsive way.
"I know that some commentators have been worried that ASIC would use its powers to ban products — and that this would affect innovation and competition," he said. "We think that such a power would not stifle innovation that has a positive impact on consumers. In fact, banning products would be very rare and would only occur in the most extreme circumstances."
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