Tuesday 13 March 2007 LAWFUEL – Australian Business + Law – The Australian Securities and Investments Commission (ASIC) has launched a new guide which clarifies its approach to accepting enforceable undertakings (EUs) under the Australian Securities and Investments Commission Act 2001(ASIC Act). Enforceable undertakings are one of a number of remedies available to ASIC for breaches of the legislation it is responsible for enforcing.
They are generally accepted by ASIC as an alternative to civil or administrative action but are not appropriate in place of criminal proceedings or in matters involving deliberate fraud and misconduct. There can be a number of advantages for ASIC in accepting an EU rather than pursuing litigation. For instance, an EU can produce a swift result that can require improved compliance arrangements and where appropriate, include compensation to those who have suffered loss. ASIC Chairman, Mr Jeffrey Lucy, said that while the policy underlying the new publication does not differ greatly from the previous guidelines contained in Practice Note 69, it aims to provide increased clarity and understanding of the processes ASIC undertakes in considering an undertaking.
‘This guide will also be useful in dispelling any uncertainty over how we deal with enforceable undertakings, and aims to provide a clearer indication of the circumstances in which we will accept an enforceable undertaking,’ Mr Lucy said. The guide outlines: what an enforceable undertaking is;
when ASIC will consider accepting an enforceable undertaking; what terms are or are not acceptable to ASIC; and what happens if an enforceable undertaking is not complied with. ASIC plans to release example enforceable undertaking templates on its website in the near future as a supplement to the guide. These templates will be expanded upon and updated as necessary or regularly.
A copy of the enforceable undertakings guide is available via the ASIC website at www.asic.gov.au
Background ASIC recently entered into enforceable undertakings with AMP Financial Planning and the Multiplex Group as an alternative to litigation. In both cases ASIC believed an EU produced a more effective and timely regulatory outcome as the flexibility of the process allowed a mix of compensation and compliance issues to be addressed and a timetable set for implementation. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Emma Forehan ASIC Media Unit Telephone: 03 9280 3354 Mobile: 0409 702 310
