Overview of Australia’s regulatory framework
Business dealings in Australia are controlled by a large number of regulators. These regulatory bodies have jurisdiction at both the Federal and State level.
Australia’s regulators have a broad remit to oversee the conduct of businesses in a wide range of sectors, from financial services to energy infrastructure.
Australia’s corporate regulators are creatures of statute. Legislation governs the role of each regulator and, most importantly, their coercive powers and the restraints on the exercise of those powers. All companies doing business in Australia should be cognisant of Australia’s particular regulatory framework.
The Australian Securities and Investments Commission (ASIC) regulates corporations generally, including the conduct of directors and officers of companies. ASIC has broad powers, including the power to investigate suspected breaches of the Corporations Act 2001 (Cth), issue infringement notices and ban individuals from being directors or being involved in certain activities, such as providing financial advice or services.
ASIC is also the regulator of corporate entities and consumer protection responsibilities for all financial entities. ASIC licences financial entities that offer financial products and services provided they adequately disclose their financial position to consumers.
The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority whose main role is to enforce the Competition and Consumer Act 2010 and a range of additional legislation, promoting competition, fair trading and regulating national infrastructure.
The ACCC has two primary roles. Firstly, it has broad powers to prevent anti-competitive conduct. It has the power to prevent anti-competitive mergers and acquisitions and also receives complaints and investigates cartel conduct. The ACCC enforces the prohibition on contracts, arrangements, understandings or practices that have the purpose of lessening competition in a market.
Secondly, the ACCC also has general consumer protection responsibilities and enforces provisions relating to consumer protection, product safety and liability. For example, it enforces the statutory prohibition on “unconscionable conduct” in business in Australia.
Under section 155 of the Competition and Consumer Act 2010 the ACCC has compulsory information-gathering powers that allow it to obtain information, documents and evidence in relation to its enforcement functions, certain authorisation and notification decisions and regulatory matters.
The Australian Prudential Regulation Authority (APRA) is the national regulator of prudential institutions, being deposit takers, insurance companies and superannuation funds. It was established under the Australian Prudential Regulation Authority Act 1998 (Cth). APRA’s role includes ensuring that prudentially regulated financial entities maintain a minimum level of financial soundness. APRA has a broad range of formal enforcement powers, which, in addition to the power to commence civil or criminal Court proceedings, include the imposition of fines, powers to issue formal directions to businesses and the power to impose licence conditions on the way in which a business must operate.
The Commissioner of Taxation has primary responsibility for administering the income tax system in Australia. The Australian Taxation Office (ATO), under the Commissioner of Taxation, is the statutory authority responsible for administering Australia’s tax system nationally.
CDPP and DPP
The Office of the Commonwealth Director of Public Prosecutions (CDPP) is an independent prosecution service that prosecutes offences against Commonwealth law. The CDPP prosecutes fraud on the Commonwealth (including tax and social security fraud), terrorism, money laundering, human trafficking, child exploitation, offences impacting upon the environment and safety offences. The CDPP is responsible for prosecuting criminal cartel offences.
Each State and Territory also has its own prosecution service (DPP). State DPPs prosecute indictable offences under State law. Other agencies, such as the local police force and agencies like the Independent Commission Against Corruption investigate potential criminal conduct. These matters are then referred to the DPP to prosecute the offences.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.