ASIC Outlines Three Pillars for Better Corporate Compliance

Australia's corporate watchdog has outlined three fundamental principles – transparency, accountability, and consistency – as the cornerstone for better compliance by listed entities in an evolving regulatory environment.

In a keynote address at the Australasian Investor Relations Association (AIRA) Annual Conference on Wednesday, ASIC Commissioner Simone Constant emphasized that adhering to these three tenets is key to meeting rising stakeholder expectations and regulatory changes.

Transparency

Fueling Market IntegrityConstant hailed transparency as the bedrock of Australia's robust equity markets, which rank among the cleanest globally thanks to the nation's robust disclosure regime. She lauded the high level of retail investor participation, with one in two Australians holding investments outside of property and superannuation.

"The strength of the Australian market lies in its transparency," Constant stated. "Markets cannot operate fairly without the free flow of information, and fairness gives confidence."

The commissioner warned that misconduct undermining market integrity, such as insider trading and continuous disclosure breaches, remains an enforcement priority. ASIC continues investing in cutting-edge surveillance capabilities to detect and prosecute such offenses.

Accountability

Governing Private Capital GrowthConstant highlighted the growing prominence of private markets and private capital in Australia, nearly matching the combined value of APRA-regulated superannuation funds and listed companies. While not advocating one structure over another, she stressed all investment vehicles must be accountable to those whose money they manage.

"There is a certain level of responsibility and expectation that goes with the privilege and opportunity of investing the money of other people," Constant said. "Both public and private market investments must be fair to investors and consistently meet their fair expectations."

Consistency

Upholding Stakeholder PromisesThe ASIC commissioner underscored the importance of listed entities consistently fulfilling promises made to stakeholders, whether related to service delivery, ESG commitments, or other areas. She cited ASIC's scrutiny of superannuation trustees' handling of death benefit claims as an example of enforcing such consistency.

"On key questions from stakeholders, ask yourselves: Did you do what you said you were going to do? Did you live up to the promise you made?" Constant advised.

Climate Disclosure and Regulatory Evolution

Looking ahead, Constant acknowledged the proposed mandatory climate reporting laws will enhance ASIC's ability to scrutinize ESG claims. The regulator is developing guidance to support listed companies' transition to expanded corporate responsibilities in this area.

"It means you won't just be telling the market – you'll be able to show the market what you're doing with consistency," Constant stated.

Her speech underscored ASIC's mission to uphold transparency, accountability and consistency as core principles driving good governance among listed entities. This, in turn, fosters investor confidence, consumer protection and a robust financial system.

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