Written byASIC is the Australian Securities and Investments Commission, the regulator for companies, markets, financial services and consumer credit, which licenses providers, keeps public registers and enforces conduct laws.
Also known as: Australian Securities and Investments Commission, corporate regulator, financial services regulator
Key points
- Its powers come from the Corporations Act, the ASIC Act and, for credit, the NCCP Act.
- It registers companies and business names and runs public registers of licensees, banned or disqualified people and enforcement outcomes.
- It grants, suspends and cancels Australian financial services licences and Australian credit licences.
- It enforces conduct rules such as responsible lending obligations, the best interests duty and target market requirements, and acts against misleading conduct.
- It sits alongside APRA (financial soundness), the ACCC (competition and general consumer law) and the ATO (tax).
What ASIC does
ASIC's job is to keep investors and consumers confident and markets honest. Its work falls into four areas. Corporate regulation covers company law, directors' duties and financial reporting. Financial services supervision covers licensing, adviser conduct and financial product rules. Market integrity covers exchanges, disclosure and surveillance against market misconduct. Consumer protection covers misleading or unconscionable conduct in financial services and credit.
In practice that means ASIC registers companies and business names, licenses financial services providers and credit providers, monitors what regulated entities disclose and how they behave, investigates suspected breaches and takes civil or criminal action where it is warranted. For brokers and lenders it is the primary regulator: the credit licence, the credit guide and responsible lending all sit with ASIC.
Who ASIC regulates and what it expects
ASIC's supervision reaches registered companies and their officers, financial services licensees and their authorised representatives, credit providers and credit representatives, auditors and liquidators, operators of managed investment schemes, and anyone banned from managing a company or providing financial services.
The obligations are practical. Companies lodge annual reviews and notify changes to officers, addresses and shares. Licensees lodge returns, pay fees, keep their disclosure documents accurate and meet conduct duties such as acting in the customer's best interests and lending responsibly. Everyone keeps records: advice files, customer files, minutes and key correspondence, for the statutory retention period. Trading without the right licence, or outside its scope, is one of the most common ways a finance business gets into trouble, and vendor finance arrangements can trigger licensing without the business realising.
Powers and enforcement
ASIC can compel a business to produce documents or attend an examination, and it can obtain search warrants. From there its options range from administrative to criminal. It can accept an enforceable undertaking (a public, binding promise to fix a problem), issue an infringement notice (a fixed penalty without court action), bring civil penalty proceedings in court for breaches of statutory duties, or refer serious dishonesty to the Director of Public Prosecutions.
Civil proceedings can end in pecuniary penalties, compensation orders, injunctions and asset freezes. Criminal cases require proof beyond reasonable doubt and are reserved for the most serious conduct. ASIC can also disqualify people from managing companies, and it can suspend or cancel a licence outright. Fee-for-no-service cases at major financial firms show the pattern: civil action, customer remediation and compliance upgrades imposed together.
Using ASIC's registers and dealing with ASIC
ASIC's registers are a free due diligence tool. The companies register confirms an ACN, officeholders, status and lodged documents; the business names register shows who is behind a trading name; the licence registers show whether a business holds a financial services or credit licence and on what conditions; and the banned and disqualified persons register shows whether a prospective director or partner is barred. Save the search results to your file.
If ASIC contacts you, work out whether it is an informal enquiry or a compulsory notice, note the deadline, stop any routine deletion of documents and get regulatory advice early. Be accurate and cooperative; obstruction or altering records turns a compliance issue into a criminal one. Whistleblowers who report eligible wrongdoing to ASIC have protections under the Corporations Act.
Example
A brokerage signs up a new referral partner. Before paying any commission it searches ASIC's registers: the companies register confirms the partner's ACN and directors, the credit register shows the partner is an authorised credit representative under another firm's licence, and the banned and disqualified persons register comes back clear. The results are saved to the partner's due diligence file. When ASIC later issues a notice to that partner, the brokerage can show it checked the partner's status and scope before referring a single customer.
Not to be confused with
- APRA
- APRA supervises the financial soundness of banks, insurers and super funds; ASIC regulates how financial businesses behave
- ACCC
- the ACCC enforces competition and consumer law across the whole economy; ASIC enforces it for financial services and credit
- ATO
- the ATO administers tax; ASIC administers company registration and financial services law
Frequently asked questions
What does ASIC do?
ASIC registers companies and business names, licenses financial services and credit providers, monitors disclosure and conduct, and enforces the Corporations Act, the ASIC Act and the National Consumer Credit Protection Act. It can compel documents, accept undertakings, issue infringement notices, bring civil penalty proceedings, disqualify directors and refer criminal conduct for prosecution.
Does my business need an ASIC licence?
If you give financial product advice, deal in financial products or run a managed investment scheme you may need an Australian financial services licence. If you provide consumer credit or help consumers get it, including as a broker, you need an Australian credit licence or an authorisation under someone else's. Check the scope with ASIC's guidance or a licensing adviser.
How do I check if a company or director is registered or banned?
Search ASIC's online registers. The companies register shows a company's status, ACN and officeholders, the licence registers show financial services and credit licensees and their representatives, and the banned and disqualified persons register lists people barred from managing companies or providing financial services. Keep a copy of the results for your records.
What happens if ASIC investigates my business?
Expect requests for documents or a compulsory notice with a deadline. Preserve all relevant records, get regulatory legal advice and respond accurately and on time. Outcomes range from no action, to an enforceable undertaking or infringement notice, to civil penalty proceedings or a criminal referral. Timelines run from weeks for a simple request to years for litigated matters.
Who else regulates financial services in Australia?
ASIC covers conduct, disclosure, licensing and corporate law. APRA supervises the financial strength of banks, insurers and super funds. The ACCC handles competition and general consumer law, AUSTRAC handles anti-money laundering, the ATO handles tax and the RBA sets monetary policy. The regulators share information and refer matters to each other.
Related terms
NCCP Act
The NCCP Act is Australia's National Consumer Credit Protection Act 2009, the law that licenses credit providers and brokers and sets responsible lending and disclosure rules for consumer credit.
Read definitionAustralian credit licence (ACL)
An Australian credit licence (ACL) is the authorisation from ASIC that a business needs to provide consumer credit or credit assistance under the National Consumer Credit Protection Act.
Read definitionResponsible lending obligations
Responsible lending obligations are duties under the NCCP Act that require lenders and brokers to inquire into and verify a consumer's finances and not provide or suggest unsuitable credit.
Read definitionBest interests duty
The best interests duty is a statutory obligation requiring financial advisers giving personal advice and mortgage brokers arranging credit to put the customer's interests first.
Read definitionAPRA
APRA is the Australian Prudential Regulation Authority, the statutory regulator responsible for prudential regulation of banks, credit unions, insurers and superannuation funds, protecting depositors, policyholders and fund members.
Read definitionACCC
The ACCC is the Australian Competition and Consumer Commission, the national regulator that enforces competition and consumer law, covering misleading conduct, cartels, product safety and unfair contract terms.
Read definitionGo deeper
Sources
This article is general information only and is not financial advice.