Regulator ASIC


ASIC – Australian Securities and Investments Commission. Control over financial markets in Australia has been greatly simplified: unlike multi-level and multi-sectoral regulators in Russia or in parallel of the existing regulators in England, ASIC is the only financial regulator in the country under the jurisdiction of the state.

The origin of the structure of regulation of financial markets in Australia began in 1998. Then powers of control over the handling of instruments and assets ASIC has received from the Central Bank of Australia. In 2001 they finally announced the national standards for communication and workflow, and ASIC received the appropriate authority.

Australian regulator ASIC is often put in the same level with the British FCA. The controller is very similar in functionality with the conservative FCA, but, unlike NFA, FCA, ASIC is less demanding on initial capital and loyal to the financial statements of the potential bidder for the license. This is due to the specific approach of the regulators, who believe that young businesses need to develop, and total control should be applied at a Mature age. However, ASIC is more scrupulously testing out a new investment product than FCA.

ASIC functions:

  • monitoring the work and interactions between financial market entities, including pension and investment funds, brokers;
  • full control over all transactions on purchase and sale of assets committed in the country, compliance with laws for money transfers (within the program against money laundering);
  • collection of the information about the companies and private persons that provide consulting services in the field of formation of the investment portfolio, managing insurance, pension, deposit;
  • full control over the circulation of securities, futures contracts and other instruments on the domestic financial market;
  • the regulator is performs licensing of companies that provide services in the field of capital management (derivatives, securities, deposits), insurance and savings services (including pension contributions);
  • the detection of fraud during tracking transparency of transactions conducted in Australia and validation their legitimacy.

In comparison with the European regulators, you may notice some difference in the functions of the organization. If European regulators are focused on optimizing collaboration and transparency (clarity and openness) of financial markets (in Russia the emphasis is on protection of investors ‘ rights), ASIC,  puts misconduct and fraud detection at the first place.

In online mode, the controller receives data from companies and markets. Professional innovative service IRESS analyzes the dynamics of indices, capitalization, company news, evaluates the quotations of securities, comparing the obtained information with the regulations. This system allows you to receive proactive alerts about whether the transactions fictitious or misconduct.

The principles of operation of ASIC:

  • the organization created a strict system of penalties. For any, even the most serious violation, the regulator imposes very substantial fines, thereby causing the company to fulfill its obligations. There are times when companies cannot declare bankruptcy, because they are physically unable to pay fines (how to pay in this situation?);
  • the applicant for a license goes through a thorough audit, and collected information about the company is in the public access;
  • the organization responds quickly to violations of a brokerage company in case of customer complaints. Company does not perform solutions of disputes and internal arbitration: if there are proofs of violation, then the collected facts are transferred to administrative court.;
  • the organization participates in the development of bylaws that regulate the financial markets. Development of them is carried out on the basis of customer requests and disputes.

How to obtain ASIC license:

  • submit an application and provide complete package of documents revealing the nature of the activities of the company, its organizational structure;
  • register a resident company in Australia;
  • share capital – from 500 thousand Australian dollars (about 370 thousand U.S. dollars);
  • prove that the company has a highly professional top management with relevant work experience, has the technological software, able to resist risks;
  • at least one company Director must be resident of Australia;
  • legal address in the country is required (actual presence of the office, is not required, unlike FCA);
  • account should be opened in the Bank of Australia.

Getting a license will take roughly 3-5 months.

History knows enough interesting cases where ASIC was able to identify sufficiently serious breaches. For example, the same as with the Libor scandal, happened to the Bank Barclays, which was subjected to a significant risk of clients ‘ money in the amount of 13.8 million U.S. dollars, violating corporate law. Another investigation related to one of the renowned traders, who put up sell orders of the shares of one company at a lower price, thereby falling by 99% of its quotes. Reaction of ASIC, who tracked an information online, was instantaneous – the auction was stopped in 80 seconds.

Official ASIC website:

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