The Australian Securities and Investments Commission is an autonomous supervisory entity founded in 1991 by replacing the National Companies and Securities Commission (NCSC). ASIC is in charge of regulating financial businesses, consumer credit, corporates, financial markets, investment advisors, insurance providers, and other monetary bodies in Australia. It should be noted that the organization was first established as the Australian Securities Commission (ASC) in 1991 – responsible for uniting Australian regulators and later in 1998 was renamed ASIC to take on consumer protection, superannuation, insurance, and so on. The regulatory body of ASIC is empowered under the Australian Securities and Investments Commission Act 2001 (ASIC Act) and the Corporations Act 2001 to assess the efficiency of financial markets and revoke, suspend or grant licenses to the banks, credit unions, finance companies, and mortgage and finance brokers. Other important Acts that give more authority to ASIC are the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019, the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019, and the Business Names Registration Act 2011.
The organization oversees Australia’s domestic licensed equity, derivatives securities, and futures markets in addition to its overall economic integrity to ensure a fair and transparent market environment for the growth and prosperity of the country’s economy. ASIC is held accountable by the Commonwealth Parliament and the Treasurer and the Parliamentary Secretary. ASIC plays the role of a facilitator for financial systems and promotes investing endeavors that require surgical administration of the laws and other procedural necessities along the way. Moreover, ASIC makes sure that information about companies, businesses, and financial service providers is accessible to the public in a transparent manner. This Australian supervisory body works side by side with international organizations, foreign regulators as well as other law enforcement authorities concerning investigations, surveillance, licensing, compliance, etc. ASIC is a member of several prominent international regulatory bodies including the International Organization of Securities Commissions (IOSCO). ASIC has also a notably close relationship with the Australian Prudential Regulation Authority (APRA) in terms of consulting and strengthening the efficacy of regulatory frameworks, in addition to a signed Memorandum of Understanding (MoU) which further solidifies their collaboration.
Furthermore, the internal governance of ASIC consists of Commission - in charge of ASIC’s overall direction, operation, the scope of powers as well as priorities, Audit Committee - responsible for reviewing and approving ASIC’s Audit plans, Risk Committees - recommending the risk management framework to the Commission, Regulatory Policy Group - making decisions for the Commission regarding new policies, laws, and novel applications for relief, and Enforcement Committee – making decisions and monitoring on behalf of the Commission in terms of the strategies, conduct, and other important issues.
The laws and provisions laid down by ASIC enable the organization to enforce administrative decisions regarding the registration of businesses, managed investment plans, auditors and liquidators. In addition, ASIC grants service and credit licenses to Australian financial corporates, follows up on the set laws to ensure the morality of financial markets, puts a stop to financial products under defective disclosure documents, runs regular investigations into financial entities for possible breach of contracts, announces infringement notices for the alleged violation of the laws, prohibits from further activities in case of financial misconduct, pursues civil penalties from the courts, and finally prosecutes those who deem themselves above the laws.
ASIC uses programs like MoneySmart for instructing the traders and investors about different aspects of the market to maximize their profits, provides services for reclaiming lost money in case of insolvency and financial scams, and informs the consumers about the Codes of Conduct before entering the market for investment purposes. ASIC also advises traders to borrow money only from regulated financial service providers. ASIC welcomes All clients’ complaints against the authorized firms as well as itself. Under the National Consumer Credit Protection Act 2009, ASIC makes certain that the registered members are following the laws and the required standards.
In short, ASIC makes every attempt to ensure that the Australian Financial Markets adhere to the laws. ASIC strongly suggests that every trader or investor who wishes to invest in an ASIC regulated broker should demand an AFSL Number from the broker in question to verify their authenticity (every ASIC regulated firm must be able to provide one). ASIC also deals with consumer complaints through different channels and Federal agencies. If the complaining party does not receive a favorable outcome from the broker regarding their claim, they can always contact the Financial Ombudsman Service (FOS) or even take their claim to a higher authority like the Court. The unfair contracts terms law allows ASIC to make sure business and insurance contracts are rid of unfair terms that could potentially put consumers in a vulnerable situation financially.
