Senate report on ASIC’s investigation and enforcement roles – July 2024

The Senate Economics References Committee has issued its Report – Australian Securities and Investments Commission – investigation and enforcement, of 3 July 2024, which is highly critical of ASIC as a corporate regulator and which makes a series of recommendations.[1] 

One of its main points and recommendations is that ASIC has too much on its plate, with “successive governments having expanded ASIC’s remit in response to emerging needs in corporate and financial regulation”, to the extent that “ASIC’s remit is one of the widest of any corporate regulator in the world”.

The Report acknowledges that “ASIC’s capacity to respond to corporate misconduct is now compromised by significant structural, resourcing and cultural issues”.  Hiving off parts of its responsibilities is recommended. 

The Report says that ASIC’s responsibility for enforcing corporations law [and more] supports the health of the economy, promotes market integrity and protects consumers and investors and that when corporate misconduct occurs, “Australians” expect that ASIC will investigate promptly, take appropriate enforcement action and deter future breaches of the law. However, ASIC’s approach to investigation and enforcement has been continually criticised over many years, such that “corporate law is underenforced in Australia”. ASIC’s response to most reports of alleged misconduct is to take no further action and only a fraction of reports are investigated. For the matters where ASIC proceeds to take enforcement action, the civil penalties imposed [by the courts] are often at odds with the scale of the offending, and few criminal sanctions are achieved. Further, ASIC’s investigation and enforcement decisions are opaque and difficult to scrutinise.

ASIC’s “insurmountable remit” is one such issue such that in 2021–22, ASIC regulated over 95 000 entities of varying size and complexity and ASIC’s regulatory responsibility is one of the widest of any corporate regulator in the world.

As to reports from liquidators on insolvent companies, the Report claims that ‘most statutory reports that insolvency practitioners submit to ASIC … go without investigation [this being] particularly concerning given that the number of companies entering administration in Australia are at record high levels’. 

The recommendations

The opening recommendation  of the Committee is that the government

“should recognise that ASIC has comprehensively failed to fulfil its regulatory remit”,

and that that ASIC’s

“regulatory failures call into question whether its remit is too broad for it to be an effective and efficient agency, and the government should strongly consider separating its functions between a companies regulator and a separate financial conduct authority”. 

All further recommendations in the Report committee follow from these two recommendations, that is, they refer to the potential replacement bodies for ASIC rather than just to ASIC itself.

As to some particular recommendations, the Report gives several options to re-focus ASIC’s responsibilities, including civil enforcement functions and prosecutions being administered by entities separate to ASIC. Responsibility for consumer protection in financial services could be administered by an agency focussed on the retail market. These options present an

“opportunity to step away from the failed regulatory experiment of ASIC as a ‘do everything’ corporate regulator”.


As to the validity and reality of the Committee’s criticisms, while much of the Report may well be accepted, the quality and outcomes of any regulation have to be assessed in the context of the environment in which those being regulated are permitted by the government to operate.  In that respect, Australia is hardly a paragon of regulatory quality in its laws. 

The Report is therefore perhaps a little disingenuous in its criticism of ASIC, given the many regulatory mechanisms against corporate and related misconduct that are waiting to be adopted in Australia.

Australia has spent the last 15 years without fully effective anti-money laundering laws, foreshadowed in 2006[2] and only now being implemented.[3]  

While the Report calls for a high degree of transparency from ASIC, Australia is still working on a beneficial ownership register, recommended nearly ten years ago, if not earlier.[4]

Australian tax laws concede significant opportunity to businesses, large and small, to avoid or delay payment – such that, as the Senate Report explains, one director was involved in the failure of eight small companies owing nearly $14 million to the Australian Taxation Office.

And while the Report recommends that there be searchable public registers of civil or criminal outcomes arising from reports of alleged misconduct and the outcome of the proposed regulatory authorities’ handling those reports, director IDs (identity numbers) remain inaccessible.

As to one response to ASIC’s extensive ‘remit’, a recommendation to hive off ASIC’s insolvency functions to create a single insolvency regulator has never been accepted.[5] The 2023 Parliamentary Joint Committee Report on Corporate Insolvency has again raised this issue.[6]

The law concerning liquidators’ reporting of offences has remained unreformed by government for a long time.  Those reports were also the subject of the 2023 PJC’s Report, at recommendation 19, for a review of whether they meet the aims of integrity, efficiency, and efficacy of the insolvency system. That has developed such that one comment in ASIC’s subsequent preliminary review[7] is that some insolvency practitioners “are undertaking extensive investigations and incurring significant costs in completing the initial statutory report. We consider this to generally be unnecessary and that available funds could be applied in other ways …”. The government has yet to respond to that recommendation, or the PJC Report.[8] 

And while ASIC should “develop consistent standards to transparently report data to the public on the handling of reports of alleged misconduct”, 2010 recommendations for the gathering and reporting of insolvency statistics which might better direct law reform and regulation have not been implemented.  The PJC Report has again raised this issue.

As to the quality of our regulatory laws, the Report, in recommending implementation of the review of Ch 7 of the Corporations Act as recommended by the ALRC, must acknowledge the overly complex nature of corporations law generally, and the highly regulatory approach often adopted by Australia, often making compliance difficult.  Consistent with that, the Report recommends legislative requirements for the ‘appropriate rate’ at which reports of alleged misconduct are investigated, and to legislate for ‘a high level of transparency of investigation and enforcement outcomes’.

Some qualifications to the main report are given, putting in context what has been a “longstanding debate” about ASIC’s role, with complexity surrounding the “detail on any potential model for separating the markets, corporations and financial services functions of the regulator, the timeframe over which this might occur, and the process to achieve it”.  There was also evidence presented to the inquiry in favour of ASIC’s broad remit.[9]

A final comment is that the Report seems to say is that Australian business culture is such that corporate illegality and misconduct is at a high level, let alone misconduct in the areas of tax, competition and insurance, under the control of other regulators. While regulatory deterrence has a role, compliance should come not only from the threat of legal action by the regulator.

A government response to the Senate Committee’s Report is due within 3 months, by early October.  No doubt the Report will receive close consideration.


[1] Australian Securities and Investments Commission investigation and enforcement – Parliament of Australia (


[3] Modernising Australia’s anti-money laundering and counter-terrorism financing regime – Attorney-General’s Department – Citizen Space (

[4] 2015 Report on Insolvency in the Australian Construction Industry, of the Senate Economics References Committee, recommendation no 35.

[5] 2010 Senate Report on ASIC’s Insolvency Regulation

[6] Corporate insolvency in Australia – Parliament of Australia ( Chapter 5.

[7] CP 377 – Consultation Paper CP 377 Guidance for reporting by external administrators and controllers: Updates to RG 16 (

[8] The 2023 Parliamentary Joint Committee Report and insolvency law reform? – Murrays Legal

[9] Government Senators’ additional comments


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