ASIC’s Expanded Powers Offer More Protection for Australia’s Financial System
ASIC now has expanded powers to monitor, manage and respond to risks related to Australian financial market infrastructures (FIMs).
ASIC now has expanded powers to monitor, manage and respond to risks related to Australian financial market infrastructures (FIMs). This additional oversight will ensure a stable and efficient Australian financial system which is critical to the viability of many industry sectors, including insurance.
The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which passed last month, introduces a crisis management and resolution regime to enhance ASIC and the Reserve Bank of Australia’s (RBA) licensing, supervisory and enforcement powers. Thus, providing ASIC with more capacity to monitor the ongoing conduct of FMI entities, identify risks as they emerge, and take appropriate action to prevent those risks from escalating, and streamline and transfer roles and responsibilities between the Minister, ASIC, and the RBA.
FMIs include financial market operators, benchmark administrators, clearing and settlement (CS) facilities, and derivative trade repositories. Maintaining a transparent and healthy financial system ensures community confidence and trust which can’t be underestimated.
ASIC Commissioner Simone Constant said: “The new laws ensure we have a fit-for-purpose regulatory regime for critical financial market infrastructure. 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. Collectively, these new powers help ASIC ensure the Australian financial system is supported by resilient, efficient, and stable FMIs.”
To assist industry to comply with the enhanced regulatory framework for FMIs, further details will be available on the ASIC website.