The government has flagged reform of the supervision of Australia's financial markets, with ASIC set to take over the supervision and surveillance of financial markets and market participants by the third quarter of 2010.
After industry consultation and the passage of the necessary legislation, ASIC will be responsible for both supervision and enforcement of the laws against misconduct on Australia's financial markets.
Market operators such as the Australian Securities Exchange (ASX), however, will retain supervision of listed entities.
The reform is in line with the move towards centralised or independent regulation in other leading jurisdictions, Minister for Financial Services, Superannuation and Corporate Law Chris Bowen said.
"Having one whole-of-market supervisor will consolidate the current individual supervisory responsibilities into one entity, streamlining supervision and enforcement, and providing complete supervision of trading on the market," he said.
"Moving to whole-of-market supervision is also the first step in the process towards considering competition between market operators."
ASIC has assured the government that it is able to take on these important responsibilities, ASIC chairman Tony D'Aloisio said.
"ASIC is now closer to the market, more accessible, flexible, and able to take emerging trends into account more quickly," he said.
"We will be working closely with ASX to ensure a smooth transition of market surveillance and participant supervision responsibilities to ASIC."
The Investment and Financial Services Association (IFSA) welcomed the reform, but noted the changes should ensure that market supervision is consistent across all licensed financial markets.
"As this transition occurs, it is to be hoped that the institutional memory and expertise of the ASX supervisory body will also be largely transferred to ASIC," IFSA chief executive Richard Gilbert said.
