The Government will tomorrow introduce legislation into Parliament that will reform the way financial markets in Australia are supervised.
In doing so, the Bill will enhance the integrity of Australia’s financial markets and contribute to the goal of making Australia a financial hub.
“The decision to transfer responsibility for supervision of Australia’s financial markets to ASIC is a significant one which will stand the operation of Australian financial markets in good stead into the future,” Mr Bowen said.
The Bill contains three key measures:
- The Bill removes the obligation on Australian market licensees to supervise their markets.
- The Bill provides ASIC with the function of supervising domestic Australian market licensees.
- The Bill provides ASIC with additional powers, including the power to make rules with respect to trading on such markets and additional powers to enforce such rules.
Following extensive public consultation, a number of changes have been made to the Bill, including:
- the maximum penalty for a breach of a market integrity rule for either an individual or a corporation has been reduced to $1 million; and
- the maximum pecuniary penalty payable when entering into an arrangement with ASIC to avoid civil proceedings has been lowered from 4/5th of the maximum a court can order to 3/5th of the maximum a court can order.
“Setting the maximum penalty level at $1 million is an appropriate level as it is equivalent to the maximum that the ASX can currently fine a market participant for a breach of an ASX rule,” Mr Bowen said.
“In addition, the discount rate for avoiding civil proceedings has been lowered to provide a real incentive to enter into an arrangement with ASIC to avoid civil proceedings.”
Further detail of how the new regime will work will be contained in regulations and ASIC's market integrity rules, which are currently being developed. Stakeholders will be consulted on their content as they are developed. The framework within which this can occur is set out in the Bill.
9 February 2010