Corporate Regulators in Australia (1961-2000): From Companies' Registrars to the Australian Securities and Investments Commission

Abstract

It is now 50 years since the first steps were taken towards the establishment of a federal scheme of companies and securities regulation in Australia and the development of a single, national securities commission to police the relevant legislation. Sweeping and fundamental changes in conceptual, legislative and institutional approaches to companies and securities regulation have ensued over the last half-century with the development of a national corporations scheme. The paper is a preliminary survey and investigation of the many complexities - personal, political, legal, social and institutional - that have influenced, motivated and constrained the development of the present system of Australian companies and securities regulation, particularly in reference to the bodies which have been mandated the task of policing the relevant law.

The paper commences by reviewing the developments which led to the formation of the first national regulatory scheme, the Unified Companies Acts (1961-62) of the six states and the creation of the Interstate Corporate Affairs Commission (1974-79), the first institutional regulatory arrangement with a substantially national purview. The influence of economic and political events, from the finance and securities scandals of the 1960s to the large-scale breakdown of federal-state relations are surveyed, and the leading role of lawyers and politicians in the reform of the old states-based regimes are assessed as the need for a national system of regulation and enforcement was increasingly recognised as a matter of national economic interest and hence a pressing concern for political and legislative reform.

The turbulent years of the 1980s and the National Companies and Securities Commission (1981-90) are then assessed. The seminal role of the first properly federal commission in developing accounting standards, securities trading and managed funds reform are considered in light of the critical legislative changes which saw widespread deregulation and internationalisation of the financial system and the concomitant rise of a clamorous tide of securities speculation, take-over activity and corporate misconduct. By the late 1980s the reform process had become a matter of intense public interest as the billion-dollar losses of both local and international banks were now matched by a new round of scandals in the managed funds area, just as the first federal scheme was being wound up to be replaced by a more developed legislative framework and companies and securities enforcement regime.

The final part of the paper surveys the first ten years of the comprehensive new national scheme established at the end of the 1980s: from the establishment of the Australian Securities Commission (now ASIC) in 1989 and the development of the Corporate Law Economic Reform Program to the reworking of the previous regulatory arrangements which saw investment protection brought squarely under the supervision of the national securities commission.