Australian financial regulator publishes supervision report, surveillance bears fruit

ASIC today published its eighth report on the supervision and surveillance of Australian financial markets and market participants.

Report 405 ASIC supervision of markets and participants: January to June 2014 (REP 405) outlines some of the work ASIC does to ensure the integrity of our markets. In the period January to June 2014, ASIC’s activities included:




15 significant enforcement outcomes

8 infringement notices issued by the Markets Disciplinary Panel

21 matters referred for further investigation

17,091 trading alerts

122 market inquiries

35 risk-based assessment visits

55 participant compliance reviews

17 industry presentations.

The report also describes ASIC’s efforts to achieve positive behavioural change to prevent potential breaches of the Corporations Act 2001 or market integrity rules and the techniques it uses to pursue this objective.

ASIC Commissioner Cathie Armour said that the impact of ASIC’s early intervention program should not be underestimated. This line of thinking was highlighted in the regulatory authority’s biannual enforcement report which was issued at the end of July this year.

“By engaging with market participants about inappropriate conduct or poor compliance practices before they manifest in a breach, we can prevent potential damage to market integrity and consequential investor losses” Commissioner Armour said.

The report provides additional insight into activities underpinning ASIC enforcement action in the markets area. For example, between 1 January and 30 June 2014, the Market Integrity Enforcement team typically had over 80 matters under investigation at any one time. As part of these investigations, they conducted 66 formal interviews with persons of interest, issued 326 notices to obtain information and executed four search warrants in partnership with the Australian Federal Police.

Greg Yanco, Senior Executive Leader of Market & Participant Supervision, said ASIC’s ability to effectively supervise the market was supported by staff with significant expertise in the mechanisms of the market who are trained to recognize and respond to market misconduct.

Mr Yanco said, “With highly qualified staff and a new surveillance system purpose-built and designed to handle the dynamism of our financial markets, ASIC is better positioned to detect, investigate and prosecute trading breaches than ever before.”

REP 405 identifies future areas of focus for ASIC, in particular, correcting deficiencies in the treatment of confidential information by listed companies. Other aspects of market conduct to which ASIC will be paying close attention in the coming six months include suspicious activity reporting and the execution of orders by designated trade representatives.

For the full enforcement report, click here.

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