ASIC Clarifies Requisites for Financial Service Providers, Outlines 2015 Risks

The Australian Securities and Investments Commission (ASIC) on behalf of Commissioner Greg Tanzer, gave a recent speech at Sydney’s Macquarie

asicThe Australian Securities and Investments Commission (ASIC) on behalf of Commissioner Greg Tanzer, gave a recent speech at Sydney’s Macquarie University, outlining possible risks for the industry in 2015.

Roughly one month ago, ASIC amended the Derivative Transaction Rules and corresponding derivative transaction rules on the heels of industry consultation and accompanying feedback on a consultation paper.

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According to the recent speech by ASIC Commissioner Mr. Tanzer, the financial industry faces several key components in 2015 and beyond, including risk culture, governance and financial literacy.

Indeed, Mr. Tanzer pointed to the important of risk culture, governance and financial literacy as paramount elements in fostering trust and confidence in the Australian and international financial system. Trust and confidence are at the heart of ASIC’s role as Australia’s financial services and markets regulator, noted Mr. Tanzer during his speech.

ASIC’s 2015 Challenges and Headwinds

ASIC oversees the compliance issues and litigation for the financial industry in Australia, including the policing of a number of financial instruments such as FX. The regulator focuses on both reactive and proactive surveillance and breach reporting, routinely warning and making the public aware of scams, as well as any legal action levied against firms or individuals.

In addition, ASIC also educates the public via guidance on harmful behavior or actions by firms and providing policy advice to the Australian government in a bid to usher in greater transparency measures.

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More specifically, in his speech, Mr. Tanzer noted the following challenges he foresees in 2015:

  • Getting the right balance between a free market-based system and investor protection, with a particular focus on:
  • Facilitating business and deregulation; and
  • Ensuring that the gatekeepers we regulate have a culture and systems that
  • Emphasize the best interests of those they have responsibilities to
  • Digital disruption to existing business models and channels; including structural change in our financial system through the growth of capital markets and the movement of savings from the banking sector to the super sector
  • Financial innovation-driven complexity in products, markets and technology Much of this is driven by the digitization of our economy; and
  • Globalization

ASIC itself has been responsible for a number of actions over the past year, helping purge the financial industry of many fraudulent threats and scammers. According to the speech, ASIC was directly responsible for:

  • 30 criminals being convicted and 14 jailed
  • Over $174 million in compensation for investors
  • Nearly $6 million in fines from enforcement matters
  • 62 people removed from directing companies
  • 23 Australian financial services licenses cancelled
  • 57 people banned from providing financial services

ASIC Defines Documentation for Financial Service Providers

Today also saw ASIC define the specific documentation requites of foreign financial services providers, with regards to being able to conduct and do business in Australia.

In a recent ASIC statement for advisers to foreign financial services providers, the Australian regulator spelled out the following:

  • An original dated letter of intention to provide financial services in Australia
  • A certified copy or original providing adequate evidence of registration, authorisation or permission from the overseas regulator
  • A notice of reliance
  • An original signed deed of reliance
  • An original dated and signed letter addressed to ASIC consenting to mutual disclosure between ASIC and the overseas regulator

In addition, those foreign financial services providers not already registered with ASIC as a foreign entity will need to procure either a certified copy or original evidence of their local agent appointment, given the need to provide evidence of registration in their respective country or formation.

The details and requirements of the ASIC manifest can be read in full by accessing the following link.

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