SUBJECTS: Strengthening of ASIC'S investigative powers, increased penalties for market misconduct offences.
CHRIS BOWEN:
Yes, I do think it's a significant issue, Nicole. If you look at the number of referrals from the Australian Securities Exchange to ASIC for investigation, while they're a small proportion of the total number of trades of course, it's still high enough to warrant concern. And also, if you look at the number of instances of an increase in the price of shares before market significant announcements are made, it also indicates we do have an issue – an issue that these reforms are designed to address.
CHETTLE:
But is this simply a response to ASIC's recent high profile failures?
BOWEN:
Not at all. Those court cases, high profile cases you refer to don't refer to insider trading and market manipulation. They are about different issues. ASIC have made it clear to me that they feel there are a significant number of insider trading cases where they feel there has been insider trading but they don't have enough evidence to prosecute because they haven't had telephone tapping and electronic interception powers.
CHETTLE:
But Minister, the markets may be nervous about giving more power to a body with a poor track record. How will you measure success?
BOWEN:
Well, I hope that nobody gets prosecuted because I hope that the very strong deterrent message that we're sending today with ten year jail terms deters people from undertaking insider trading and other market manipulation. But certainly ASIC have made it very clear to me that they feel that they've been fighting with one hand behind their back when it comes to insider trading and other market manipulation and it has been taken very seriously by the Government.
CHETTLE:
Financial Services Minister Chris Bowen, thanks for joining us.
BOWEN:
Great pleasure.