Australian Securities and Investment Commission:
The Australian Securities and Investment Commission (ASIC) is an independent government body established by the ASIC Act 1989. Originally, it came into effect on 1st January 1991 as an ‘Australian Securities Commission (ASC). It replaced the National Companies and Securities Commission (NCSC) and the Corporate Affairs offices of the states and territories. It's function is to regulate financial markets, securities, futures and corporations. On 1st July 1998, the ASC was replaced with ASIC making it responsible for consumer protection in superannuation, insurance, and deposit-taking - in 2002, the responsibility has been extended to credit.
ASIC regulate Australian companies, financial markets, financial services organizations and professionals who deal and advise in investments, superannuation, insurance, deposit-taking and credit.
ASIC makes many decisions concerning corporations, securities and financial products and services that are provided to consumers. If ASIC has made a decision then the rights are also connected to such decision. In fact, what ever it does, its ultimate purpose is consumer/investor protection.
History of ASIC
In March 1997, the report of the Financial System Inquiry (the Wallis report) was released. This was termed a major inquiry into the regulation of Australia's financial system. In its report, it came to a conclusion that the financial system in Australia is undergoing continuous and rapid change, involving convergence, increased openness, increased competition and globalization.
These changes are primarily driven by three interlinked forces:
- Changing customer needs;
- New technologies and skills; and
- Changes to regulation across a broad spectrum.
The report gave its final recommendation as
"In the financial system, specialised regulation is required to ensure that market participants act with integrity and that the consumers are protected. The financial system warrants specialized regulation due to the complexity of financial products, the adverse consequences of breaching financial promises and the need for
low-cost means to resolve the disputes."
The Australian government, while accepting this recommendation, said that there exists a number of disadvantages on having a variety of regulatory agencies made responsible for consumer protection. It includes
- regulation was inconsistent across the range of competing financial products;
- financial services providers faced a range of different regulatory rules that raised the complexity and cost of compliance; and
- consumers faced inconsistent rules resulting in difficulties in understanding and comparing competing products.