ASIC releases information on enforcement policy

The Australian Securities and Investments Commission (ASIC) has released new policy information on how it undertakes investigations and enforcement activity.

According to ASIC, the two information sheets - entitled 'ASIC's approach to enforcement' and 'Public comment', along with Regulatory Guide 100 'Enforceable undertakings' (RG 100), outline to the public the definition of an enforceable undertaking (EU), discusses why the regulatory body may comment publicly on investigations and enforcement actions, and why it responds to breaches of the law in different ways.

"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," said ASIC chairman Greg Medcraft.

"The enforcement guide is about letting Australians better understand how and when we will take action."

The decision on whether to take enforcement action is based on assessing evidence, cost versus regulatory benefit, and level of harm or loss, the commission stated.

As well as defining an EU, RG 100 also explains when ASIC will consider accepting an EU and what happens if an EU is not complied with.

"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," Medcraft said.

ASIC stated that it plans to publish a report on key enforcement outcomes finalised during the period from 1 July to 31 December 2011.