14th November 2007
What is the role of ASIC - Australian Securities and Investment Commission?
Who is ASIC?
ASIC is Australia’s corporate, financial markets and financial services regulator. It is ASIC’s role to ensure that Australia’s financial markets are fair and transparent and that investors and consumers are kept properly informed.
ASIC is an independent Commonwealth Government body. It is set up and administered by the Australian Securities and Investment Commissions Act with most work carried out under the Corporations Act.
What does ASIC regulate?
ASIC has 3 main regulatory roles
Corporate Regulator – It is ASIC's role to ensure that company directors and officers carry out their duties honestly, diligently and in the best interest of their company. They also register all companies and ensure that information about them is available efficiently and quickly.
Markets Regulator – ASIC assess how effectively financial markets are complying with their legal obligations to operate fair, orderly and transparent markets.
Financial Services Regulator – ASIC license and monitor financial services businesses to ensure that they operate efficiently, honestly and fairly. These businesses typically deal in superannuation, managed funds, shares and company securities, derivatives and insurance.
In addition to these regulatory roles ASIC is responsible for issuing Australian Financial Services Licenses (“AFSL”) and the monitoring of Companies and Managed Investment Schemes, Financial Service Providers, Registered Auditors and Liquidators and Licensed Financial Markets.
What is an AFSL?
As part of the Corporations Act 2001 any business provider of financial services must hold an Australian Financial Services Licence (“AFSL”), unless they are covered by an exemption or are an Authorised Representative of an AFSL holder.
ASIC manages the issuing of these licenses as it is responsible for administering the Corporations Act.
Applying and receiving an AFSL is quite a stringent process and only companies that can satisfy ASIC that their directors and operations are of the utmost credibility, will be issued a license.
Holders of an AFSL must supply to ASIC various documentation and financial reports on a regular basis.
Managed Investment Schemes
In addition to holding an AFSL, Managed Investment Scheme providers must also register separately with ASIC to operate their managed investment scheme. This registration process has a separate set of rules and regulations that providers must adhere to such as:
- They must have a compliance plan
- They must appoint an auditor of the compliance plan
- The compliance plan auditor must audit the compliance plan annually
- The auditor must then provide the Responsible Entity (“RE”) of the Managed Investment Scheme with a report of the compliance plan audit.
- The RE must lodge with ASIC a compliance plan audit report, financial report and a directors report annually
How does ASIC monitor Managed Investment Schemes?
There are a number of monitoring activities undertaken by ASIC. These include:
- Reviewing selected documents lodged with them such as; prospectuses, product disclosure statements (“PDS”), supplementary product disclosure statements (“SPDS”), bidder’s statements, target statements and financial statements
- Requesting additional or corrective disclosure if they find the information provided is unsatisfactory
- Enforcement of ‘stop orders’ if there is a serious defect with documents such as a PDS
- Inspecting companies that are showing signs of distress in order to minimise insolvent trading.
La Trobe’s position in summary
La Trobe Financial Asset Management Limited holds an Australian Financial Services Licence, Number 222213 and the La Trobe Australian Mortgage Fund (“the Fund”) is a registered Managed Investment Scheme registered with ASIC on 14 July 1999.
La Trobe has a Compliance Plan for the Fund which is reviewed on an annual basis by the Head of Legal and Compliance and the Board of Directors to ensure that it continues to meet the requirements of the Corporations Act. La Trobe has worked closely with ASIC over the years and has successfully passed a number of surveillance visits. Audits of La Trobe’s Compliance Plan and financials for the Fund are conducted by our external independent auditors.
La Trobe also has its own internal audit and compliance schedule and regular internal audits are conducted on its processes and procedures in addition to surveillance visits of it’s 27 Authorised Representatives who operate under La Trobe’s AFSL.
Copies of the La Trobe’s Directors Report, Auditors Reports and the Compliance Auditor’s Certificate for the Fund can be found in the La Trobe Australian Mortgage Fund Financial Report 2007. You can access this report via our website at www.latrobefinancial.com.au or by phoning 1800 707 707.
Source: ASIC website & ASIC: a guide to how we work