The Who, Why and What of Enforceable Undertakings Accepted by the Australian Securities and Investments Commission

Abstract

This article examines the deployment of enforceable undertakings by the Australian Securities and Investments Commission (ASIC). Enforceable undertakings are formal settlement agreements between a regulator and regulated parties to resolve issues of non-compliance with laws administered by the regulator. This article analyses the circumstances and context under which 414 enforceable undertakings were accepted by ASIC from 1 July 1998 until 31 December 2015 (17.5 years). It addresses three fundamental questions: who are the regulated parties that gave enforceable undertakings; why did they give them; and what fundamental promises or obligations did their agreements contain? The study shows that ASIC utilises enforceable undertakings to remove law-breaking individuals from an industry and to promote legal and regulatory compliance on a systemic basis within individual firms and more broadly, especially within the financial planning and wealth management sector.

Keywords: Enforcement; Enforceable Undertakings, Corporate Law; Australian Securities and Investments Commission