On Thursday, the Australian Securities and Investments Commission (ASIC) announced it would enhance its oversight of public and private markets and emerging financial products, adding these areas as a new pillar of its expanded strategic priorities.

In its latest corporate plan for 2024-28. she said a review of the growth of private markets, which have traditionally been shrouded in opacity, would form a key part of the work ahead.

The review, which is expected to take at least two years, will have the corporate regulator examine changes in public and private markets, including the significant growth of private markets and the implications for the integrity and efficiency of public markets.

“Confidence in the financial system and markets means more confidence, which means more investment. This has direct benefits for jobs and opportunities for Australians,” ASIC Chairman Joe Longo said.

"While Australia's private markets are smaller in size than our listed equity markets, their lack of transparency poses a huge risk to market integrity, particularly as more investors become exposed."

Assets under management in Australian-focused private equity funds have almost tripled in size since 2010. so far and amount to about $66 billion, according to a report published by the RBA in April.

Adding a new strategic priority to enter the private markets, Longo said, "puts all market participants on notice."

ASIC's latest move follows news last month that the corporate regulator had stepped up scrutiny and set up a special taskforce to look into the sector.

“As we see more and more activity in the private market, the question I have for myself and for ASIC is: what is going on here?” Longo told an industry event in July.

"It's less transparent - do we have to worry about conflicts of interest and ratings?"

Noting that by "nature" private markets lack transparency, Longo noted at the time the need for the regulator to "get a better understanding of what's going on there."

"Develop and Adapt"

ASIC's Corporate Plan 2024–28 also highlights the growing interest in digital assets.

Namely, the plan details the creation of a central coordination function to oversee and engage entities in digital assets, tokenization, and decentralized finance. The expected time frame for this activity is two years+.

ASIC also said that, subject to the legislation being passed, "we will improve the guidance and processes for how we supervise the conduct of financial market infrastructure providers".

The regulator also plans to "create rules for clearing and settlement services to support the ASX in promoting competition for clearing and/or settlement".

"These rules will aim to facilitate outcomes that are consistent with those expected in a competitive market for clearing and settlement services."

In particular, ASIC launched legal proceedings against the ASX earlier this month, alleging the exchange made misleading statements related to its project to replace the Clearing House Electronic Subregistration System (CHESS).

"These rules will aim to facilitate outcomes that are consistent with those expected in a competitive market for clearing and settlement services," ASIC said.

"While the overarching themes of our existing strategic priorities remain consistent, our updated corporate plan demonstrates how we are evolving and adapting to the changing needs of our operating environment," Longo said.

Summarizing the regulator's achievements to date, Longo said that in the past year alone, ASIC had launched around 170 new investigations - an increase of around 25 per cent. It also saw a 27% increase in civil proceedings, filing 33 new proceedings in Federal Court.

"Our investigations have resulted in 18 criminal convictions and we have seen a further 23 individuals charged by the Director of Commonwealth Prosecutions with offences," Longo said.

"Our latest corporate plan and strategic priorities represent the next step in ASIC's transformation journey to a modern, confident and ambitious regulator."