ASIC: Immunity for Criminals Assisting Law Enforcement

The Australian Securities and Investments Commission has announced that individuals who committed serious offenses such as market manipulation, insider trading, and dishonest conduct, would be able to seek immunity from the regulator.

The new policy will ensure whistleblowers are provided with immunity from both civil penalty and criminal proceedings despite their wrongdoings in the past. These individuals, however, will remain subject to any administrative or compensation actions that come their way.

In order to be granted immunity from civil penalty and criminal proceedings, whistleblowers will have to assist ASIC in identifying and taking enforcement action against the individuals and corporations who have breached the law.

Sean Hughes, Commissioner at the Australian Securities and Investments Commission, said: “ASIC continues to develop and implement new tools to combat and detect misconduct. The Immunity Policy enhances ASIC’s ability to identify and take enforcement action against complex markets and financial services contraventions.”

The financial watchdog has the authority to grant civil immunity to whistleblowers, but criminal immunity falls under the scope of the Commonwealth Director of Public Prosecution (CDPP). ASIC will work with the CDPP on applications for criminal immunity for whistleblowers.

“Serious offenses” can lead to up to 15 years in prison and fines of nearly $1,000,000 or three times the benefit’s value, if determined by the court.

ASIC has gained special attention from the foreign exchange industry in recent months after the Australian financial watchdog announced it is aligning itself with other leading regulators across the world by restricting leverage in FX and CFD trading.

In addition to limits to leverage, retail brokers will be prohibited from using certain marketing stunts such as bonuses and non-monetary incentives to attract new customers.

The COVID-19 pandemic brought volatility to the market. The trading disruption amid the negative oil prices in April 2020 was evidence that the retail FX and CFD industry was not prepared for such cataclysmic events. The new regulation set forth by ASIC includes standardizing CFD issuers’ margin close-out arrangements that act as a circuit breaker to close-out one or more retail client’s CFD positions before all or most of the client’s investment is lost.

The rules coming into effect March 2021 also includes protection against negative account balances by limiting a retail client’s CFD losses to the funds in their CFD trading account.