ASIC releases enforceable undertakings guide

ASIC has launched a new guide which clarifies its approach to accepting enforceable undertakings (EUs) under the Australian Securities and Investments Commission Act 2001 (ASIC Act). Enforceable undertakings are one of a number of remedies available to ASIC for breaches of the legislation it is responsible for enforcing. They are generally accepted by ASIC as an alternative to civil or administrative action but are not appropriate in place of criminal proceedings or in matters involving deliberate fraud and misconduct. There can be a number of advantages for ASIC in accepting an EU rather than pursuing litigation. For instance, an EU can produce a swift result that can require improved compliance arrangements and where appropriate, include compensation to those who have suffered loss. ASIC chairman Jeffrey Lucy said that while the policy underlying the new publication does not differ greatly from the previous guidelines contained in Practice Note 69, it aims to provide increased clarity and understanding of the processes ASIC undertakes in considering an undertaking. The guide outlines: what an enforceable undertaking is; when ASIC will consider accepting an enforceable undertaking; what terms are or are not acceptable to ASIC; and what happens if an enforceable undertaking is not complied with. ASIC plans to release example enforceable undertaking templates on its website in the near future as a supplement to the guide. These templates will be expanded upon and updated as necessary or regularly.

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