An Evaluation of ASIC’s Evolving Enforcement Priorities and Praxis

Abstract

Enforcement action is a key responsibility of the Australian Securities and Investments Commission (ASIC), Australia’s national financial regulator. ASIC has been criticised for its poor enforcement record against serious widespread or harmful misconduct impacting consumers and investors. Many public reviews of ASIC’s enforcement activities have been undertaken triggering recommendations for improvement. This thesis critically evaluates ASIC’s response to the recommendations by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Hayne Inquiry) for improvements in ASIC’s litigation approach and enforcement policy.

The thesis includes an empirical study of ASIC’s enforcement priorities and praxis through an analysis of new enforcement activities within a defined period, 1 January 2019 to 31 December 2023. This study reveals what ASIC did on the ground, how closely ASIC hewed to the Hayne Inquiry’s recommendations and exposes the weaknesses in ASIC’s subsequent enforcement priorities and praxis. The thesis argues that ASIC’s response to the Hayne Inquiry’s recommendations for improvements in ASIC’s litigation approach and enforcement policy was appropriate in that it produced an evolution in ASIC’s enforcement priorities and praxis. Such an evolution, however, came about through ASIC’s adoption of a forcefully litigious approach and a high intensity of enforcement activities in the period between 2019 and 2023, within one industry in the Australian economy in particular, being the financial services industry. The thesis argues that it is important to ensure that in the future ASIC should not be preoccupied with one industry to the detriment of its enforcement of the economy as a whole.