ASIC powers updated
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ASIC has new powers to regulate Australia’s financial market infrastructure.
The Australian Securities and Investments Commission (ASIC) has gained new powers following the introduction of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024.
The reforms, passed into law this week, are designed to bolster the oversight of financial market infrastructure (FMI) entities, ensuring their stability and efficiency within Australia’s financial system.
Major regulators including ASIC and the Reserve Bank of Australia (RBA) will be empowered with stronger regulatory tools to monitor, manage, and respond to risks associated with FMIs.
These infrastructures, which include financial market operators, clearing and settlement (CS) facilities, benchmark administrators, and derivative trade repositories, are considered integral to the operation of the capital markets in Australia.
ASIC Commissioner Simone Constant emphasised the significance of the reforms, noting that they provide ASIC with “a fit-for-purpose regulatory regime for critical financial market infrastructure”.
The reforms expand ASIC’s capacity, allowing the regulator to ensure that CS facilities provide fair and effective services, and to make rules that support the resilience and efficiency of these entities.
“The reforms significantly enhance ASIC’s regulatory toolkit for FMIs, clarify the scope of the Australian licensing regime for overseas markets and CS facilities, and empower us to make rules to promote the fair and effective provision of services by licensed CS facilities,” ASIC says.
With the new powers in place, ASIC says it is reviewing its regulatory approach and supervision strategies.
The agency has committed to working closely with the RBA and industry stakeholders as it implements these changes over the coming years.
As part of this process, ASIC will develop updated regulatory guidance and provide industry participants with the information to comply with the enhanced framework.
The Bill stems from recommendations made by the Council of Financial Regulators in 2020, which sought to strengthen the regulatory regime governing FMIs.
Key features of the reforms include the introduction of a crisis management and resolution regime, enhanced licensing, supervisory, and enforcement powers for both ASIC and the RBA, and streamlined roles and responsibilities between the Minister, ASIC, and the RBA.