AMP EU prompts ASIC guide
The enforceable undertaking (EU) entered into by AMP last year has encouraged the regulator to launch a new guide clarifying its position on accepting EUs instead of pursuing other courses of enforcement action.
The Australian Securities and Investments Commission (ASIC) chair Jeffrey Lucy said: “This guide will also be useful in dispelling any uncertainty over how we deal with EUs, and aims to provide a clearer indication of the circumstances in which we will accept an EU.”
The guide will contain information defining what an EU is, the circumstances when the regulator will consider accepting an EU, the terms where an EU would be unacceptable, and the consequences of not complying with an EU.
To complement the guide, ASIC will also be including EU templates on its website in the months to come.
Enforceable undertakings are often accepted by the corporate watchdog as an alternative to either civil or administrative legal action. According to ASIC, EUs can be used to produce a more timely result than litigation and generally involves a commitment to improving compliance procedures.
They can also include remedies to compensate parties that have suffered a loss as a result of the circumstances that dictated the acceptance of an EU.
However, where criminal proceedings are called for, or where deliberately perpetrated fraudulent activities and misconduct are in involved, ASIC will not agree to an EU.
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