ASIC has released a report covering issues in regard to market integrity for the period 1 January 2017 to 30 June 2017. The focus of the report is to demonstrate ASIC’s work to ensure Australia’s markets operate in a fair and efficient manner.
The report summarises the following enforcement actions:
Five criminal actions.
One person jailed.
Three enforceable undertakings.
Nine infringement notices.
$1.39 million of infringement notices.
Three people disqualified from providing financial services.
ASIC has been involved in the following activities:
There is ongoing interest in the use of Blockchain Technology, or Distributed Ledger Technology, by financial institutions, operators of market infrastructure and fintech firms. To date, such technology has been used in FX remittance payments, securities settlement systems and debt issuance programs.
On 20 March 2017, ASIC released Information Sheet 219 - Evaluating Distributed Ledger Technology, to provide guidance to for both existing licensees and start-ups who are considering utilising such technology.
Sydney Stock Exchange Limited
ASIC undertook an assessment of the listing standards of the Sydney Stock Exchange Limited and found that there were a number of changes which were required in order to improve the entity’s compliance with its statutory obligations. Some of the main changes involved:
Managing conflicts of interests.
Operating a listing market which is fair and efficient.
Improving how it monitors and enforces compliance with its listing rules.
In order to raise awareness with the threats posed by a cyber attack, the ASX and ASIC launched the ASX 100 Cyber Health Check Report, which examined cyber security risk awareness, risk prevention and response measures in regard to the ASX 100 companies.
Sell Side Research
To improve market practice, ASIC released a consultation paper which proposed updated guidance for sell-side research.
ASIC is proposing the following measures to ensure financial markets remain fair and efficient:
A framework for the new financial benchmark regulatory regime - click here to view the relevant consultation paper.
Amendments to the practice of managing and holding clients’ funds - especially in regard to OTC derivatives.
Reforms to the market licensing regime.
Consultation on safe and effective competition in the settlement of cash equity financial products.
ASIC accepted Enforceable Undertakings from Westpac, ANZ and Macquarie Banks in regard to inadequacies within their FX businesses. This followed on from similar actions against CBA and NAB last year.
Mr Steven Noske was found guilty of engaging in insider trading and was sentenced to 18 months’ jail and fined $20,000. The profits derived from the illegal acts amounted to $51,246.
ASIC has advised that it intends to focus on the following risks for the rest of 2017:
Technology and cyber resilience.
Effective capital markets, especially in regard to OTC products, fixed income, currencies and commodities and equity derivatives.
Should you have any queries about ASIC or other issues involving compliance, licensing, or corporate governance, please contact Jeremy Danon, director of Ariel & Associates Pty Ltd on (02) 8223 3355 or at firstname.lastname@example.org.