In Securities markets, participants and ASIC (pdf) Tony D’Aloisio, Chairman Australian Securities & Investments Commission, defends ASIC’s role as an effective regulator in the recent market turmoil:
"While the issues which have arisen in the market have required ASIC taking action and, in the area of covered short selling, legislative change, overall the regulatory framework, stood up well and ASIC has played its proper role and continues to play its proper role with its supervision of the markets and in using its powers to conduct inquiries and investigations."
Looking to the future D’Aloisio identified the narrowing of ASX’s role as a potential regulatory gap to which ASIC will dedicate more resources in order to improve confidence in the integrity of markets, even if potential additional costs arise from any duplication.
With respect to the broking industry, he said:
" …changes have been, in more recent years, manifesting themselves in expanded product ranges, customer base (e.g. hedge funds, private equities and self managed super funds), in technology (e.g. computerised trading, interaction and direct market access) and in the emergence potentially of alternative trading systems and alternative clearing systems (and the increase in third party clearing).
We are also seeing examples of wholesale products being taken into the retail sector. For example in Opes Prime we have seen the use of stocklending in the retail sector.
The expansion of product ranges and the businesses of market participants have caused us to rethink and broaden our role. For example, with breach reporting (licensee breach reporting required under the Corporations Act), we note that brokers refer less breaches to us than other licensees of the financial economy. We would like to understand whether or not this is explained by having better compliancesystems. We also want to improve our supervision of how compliance departments in the broking houses handle market rumours. Balance sheet strength, particularly where retail investors may be involved, will be another area we wish to examine. "
