An enforceable undertaking is a form of administrative settlement that ASIC may accept as a cost effective alternative to civil court action or certain administrative actions.
Enforceable undertakings are commonly used by ASIC to arrive at a cost effective regulatory outcome which promotes the integrity of, and public confidence in, financial markets and corporate governance. They are one of a number of remedies available to ASIC for breaches of legislation which it is responsible for enforcing.
In February 2015, ASIC released its Guide RG100 which provides a useful guide to ASIC’s approach to the provision, acceptance and implementation of such undertakings. The Guide highlights that an enforceable undertaking will, in most instances, be required to identify steps to be taken by the entity or person giving the undertaking to ensure that regulatory breaches do not re-occur and must include details of effective monitoring and reporting arrangements including, where appropriate, independent compliance reviews.
Details of enforceable undertakings and the promisor’s compliance with the undertaking will usually be made public by ASIC.
For McCabes’ overview of RG100 directed to financial service providers including insurers, brokers and financial planners click here.
For a full copy of RG100 click here.