ASIC launched on Wednesday a new and previously unannounced immunity policy for market misconduct offences.
The immunity policy applies to individuals who have contravened a provision in Pt 7.10 of the Corporations Act, which includes some of the most serious and complex offences such as market manipulation, insider trading, false trading and market rigging, and dishonest, misleading and deceptive conduct in relation to financial products.
Under the policy, an individual who thinks they may have engaged in an offence under Pt 7.10 can apply for immunity from both civil penalty and criminal proceedings. The catch, however, is that:
- the person seeking immunity must be the first person to disclose the conduct to ASIC; and
- ASIC must not already be investigating the matter;
Further, a person will not be granted immunity:
- unless they cooperate with subsequent investigations;
- where they instigated the contravening conduct; or
- where coerced others into participating in the contravening conduct.
ASIC hopes that the immunity policy will assist it to identify and take enforcement action in respect of market misconduct offences, and signifies a shift in ASIC’s enforcement approach from targeting minor technical breaches to instead addressing more serious and systemic misconduct.
However, while the immunity will protect whistleblowers from civil penalties or jail time, it will not cover administrative proceedings such as bans on being a company director or compensation proceedings brought by victims of the offending conduct. As such, while the immunity policy is expected to encourage more whistleblowers to come forward, it also recognises that offenders cannot completely avoid accountability.
Immunity from civil penalty proceedings will be granted by ASIC, while the Commonwealth Director of Public Prosecutions (CDPP) will be responsible for granting criminal immunity. ASIC will work with the CDPP on applications for criminal immunity.
The Australian Competition and Consumer Authority (ACCC) already has a similar policy in place in respect of cartel conduct, which was revised in 2019 to reflect its experiences in investigations undertaken since its introduction in 2014. The ACCC has often touted its immunity policy as being a key part of its toolkit in carrying out its regulatory obligations. However, in a departure from the ACCC approach, the new immunity policy only extends to individuals and not corporations. This could have the potential to create tensions in the employee/employer relationship.