ASIC Urges Market Intermediaries to Monitor Unapproved Business Communications
ASIC echoes SEC in crackdown on unmonitored business communications
The Australian Securities and Investment Commission (ASIC) has issued new guidance urging market intermediaries to closely monitor the use of unapproved communication channels and encrypted messaging apps by their representatives. The regulator expressed concerns over the use of covert communication methods, stating that they can conceal regulated business activities and increase the risk of misconduct going undetected.
ASIC’s Information Sheet 283 provides practical guidance to market intermediaries, including investment banks, securities dealers, and corporate advisers, on managing these risks and ensuring compliance with financial services laws. Market intermediaries are required to have governance frameworks in place to monitor and respond to misconduct by their representatives.
ASIC Commissioner Simone Constant emphasized the importance of market participants in maintaining market integrity and protecting investors. She highlighted the risks posed by rapidly evolving communication technologies and remote working arrangements, urging intermediaries to review their supervision arrangements regularly.
The guidance from ASIC follows similar crackdowns by the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission, which resulted in record settlements with financial institutions for failures to preserve electronic communications. With market integrity being a duty owed to every Australian, ASIC’s actions aim to protect investors and maintain trust in the financial markets.
