Australian Regulator Releases Policy on Enforcement and Investigations

Australian Securities and Investments Commission (ASIC) released policy documents discussing how it undertakes investigations and enforcement activity. 

The policy documents are:

• Information Sheet 151: ASIC’s approach to enforcement (INFO 151). This discusses how ASIC approaches enforcement and why it responds to different breaches of the law in different ways.
• Information Sheet 152: Public comment (INFO 152) is about when ASIC may comment publicly on investigations and enforcement actions. It replaces the public comment policy in Regulatory Guide 47 Public comment (RG 47)
• Regulatory Guide 100 Enforceable undertakings RG 100) outlines what an enforceable undertaking (EU) is and when ASIC will consider accepting an enforceable undertaking

ASIC Chairman Greg Medcraft said: ‘ASIC wants the public to understand how we use our enforcement powers and why we might pursue a particular type of outcome in a given case. We are improving the transparency of our enforcement approach to help people understand our enforcement role and what we want to achieve by using our enforcement powers. 

‘The enforcement guide is about letting Australians better understand how and when we will take action. It is about what happens when the law is broken or when someone thinks they have broken the law and complains to us. It provides transparency about what matters we take on, what matters we don’t and why we seek particular remedies.’ 

ASIC decision on whether to take enforcement action is based on assessing:

• evidence
• cost vs regulatory benefit; and
• level of harm or loss.

‘Our revised public comment policy will help stakeholders understand how and when we can comment on investigations. Every year ASIC conducts scores of investigations, some of which will never reach the courts. So ASIC has to balance the need for public transparency with the need to protect individual reputations,’ Mr Medcraft said. 

‘Enforceable undertakings can achieve a more effective regulatory result than other remedies in some cases - such as an improved compliance or a quicker outcome for investors. This guide will help spell out how and why we use them and what we expect from parties who enter into them.’ 

The enforceable undertaking guide outlines:

• what an enforceable undertaking is;
• when ASIC will consider accepting an enforceable undertaking;
• what terms are or are not acceptable to ASIC; and
• what happens if an enforceable undertaking is not complied with.