ASIC has published its key market regulatory priorities for 2016–17.

ASIC’s key regulatory priorities for 2016–17 are:

• cyber resilience and technology disruption;
• firm culture and conduct; and
• handling of confidential information and managing conflicts of interest in research and corporate advisory.

ASIC is promoting behaviour that improves cyber resilience for the market overall, recognising that this overall cyber resilience may only be as strong as the weakest link.

With respect to culture, ASIC will continue looking at individual elements of culture in its surveillances, for example, remuneration, breach reporting and complaints handling. This helps it to not only identify instances of misconduct, but also broader, more pervasive conduct problems. Where ASIC thinks there may be a problem, it will ask questions and do a ‘deeper dive’.

The handling of confidential information is an ongoing area of focus for ASIC. The leakage of confidential and material, non-public information about a listed entity threatens market integrity by creating information inequality. This may damage investor confidence and increase the risk of insider trading. ASIC says it is also important to ensure that conflicts between the firm and its clients, and between the competing interests of different clients, are properly managed.

ASIC believes it is important for businesses to review their controls, including policies, procedures, training and monitoring in relation to:

• identifying and handling confidential, market-sensitive information;
• supervision of wall-crossings and restricted lists where staff come into possession of confidential, market-sensitive information;
• separation and segregation of research, sales and corporate advisory teams;
• research independence, particularly when initiating coverage and valuing companies or participating in corporate transactions, and
• staff and principal participation in capital raisings, and trading around research coverage or capital raising transactions.

ASIC will consider other areas of focus over 2016–17, including:

• Ensuring client money is appropriately handled;
• Ensuring financial stability and capital review for market participants;
• Ensuring supervisory frameworks, risk management and controls are in place;
• Ensuring appropriate product distribution for retail over-the-counter (OTC) derivatives and complex products;
• Reporting suspicious activities.