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Chief Executive Officer

ASIC Chair Joe Longo has accepted a request from the Commonwealth Director of Public Prosecutions for ASIC CEO Warren Day to join the CDPP on secondment as the Director’s Executive Officer, effective 1 June 2024.

The Chair said the request recognised the contribution Mr Day had made to ASIC as CEO, in particular supporting its organisational transformation since 2021.

“Warren has been a significant contributor to ASIC for more than 20 years across virtually every part of ASIC’s remit. This is an opportunity for him to bring the skills and experience he has gained at ASIC to an agency we have a shared interest in supporting and seeing succeed,” Mr Longo said.

“Since I embarked on the review of ASIC’s infrastructure and operations on my first day as ASIC Chair, Warren has played a significant leadership role, particularly with leading the organisational redesign, the delivery of our strategic and enforcement priorities, and the management of ASIC’s Executive Leadership Team.

“Warren leaves with our full support and his appointment underpins the critical institutional relationship ASIC holds with the CDPP, which is core to our enforcement work.”

At the conclusion of the CDPP secondment, Mr Day has indicated he will not return to ASIC.

The ASIC Chair said Mr Day’s secondment to the CDPP came as ASIC enters the next phase of its transformation.

Regulation and Supervision

Executive Director of Regulation and Supervision Greg Yanco will be appointed as ASIC’s Interim CEO effective 1 June 2024. Mr Yanco was previously Executive Director Markets between January 2019 and June 2023 before commencing in his current role. He has more than 30 years of experience in financial market development, regulation, and supervision.

Mr Yanco has informed the Commission that he expects to retire in mid-2025. A local and global search for a permanent CEO will commence in early 2025.

Enforcement and Compliance

Following more than 25 years of service to ASIC, Executive Director of Enforcement and Compliance Tim Mullaly has also advised that he will be retiring from ASIC at the end of July 2024.

Mr Mullaly has held executive roles at ASIC for the last 12 years, leading the Financial Services Enforcement team for 11 years and, for the last year, Enforcement and Compliance (E&C) team. In this role and as a member of ASIC’s Executive Leadership team, Mr Mullaly was critical to implementing the new E&C structure, overseeing a team of 450 staff focused on delivery of enforcement and compliance outcomes.

“Tim has for many years played a crucial role in ensuring that ASIC has maintained a strong and strategic pipeline of enforcement work. ASIC is in court every day, and we are launching new investigations every second day of the week, all aligned to the priorities we have set out,” Mr Longo said.

Local and global searches for the Executive Director Regulation and Supervision and Executive Director Enforcement and Compliance roles will commence shortly.

“Filling these positions is an opportunity for executive renewal and ASIC’s ongoing transformation towards being a modern, ambitious and confident regulator. As the ongoing impact of our work continues to be realised, we also have opportunities for exceptional leaders to drive the next phase of ASIC’s transformation,” Mr Longo said.

“I want to thank Warren and Tim for their significant contribution to ASIC over many years and thank Greg for stepping into the Interim CEO role.”

Background

ASIC’s executive leadership team is also being strengthened with the addition of a new Executive Director role for Registry and Intelligence – following the transition of Registry services back to ASIC from the ATO – as well as a Chief People and Culture Transformation Officer. ASIC also recently appointed Joanne Harper as Executive Director for Data, Digital and Technology.

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ASIC’s Market Analysis Intelligence system now in place.

ASIC’s new market surveillance system is in operation.

Known as MAI (Market Analysis Intelligence), the system enables ASIC to better detect, investigate and prosecute trading breaches.

Commissioner Cathie Armour said that MAI provides sophisticated data analytics to identify suspicious trading in real time and across markets, as well as greater levels of detection of insider trading.

‘MAI is built around algorithmic trading technology, and gives ASIC the ability to analyse trade data for patterns and relationships.

‘This provides ASIC with even greater means to catch insider trading, and more broadly, detect market misconduct’, Ms Armour said.

Senior Executive Leader of Market and Participant Supervision, Greg Yanco, said that MAI was purpose built and designed to handle the dynamism of financial markets.

’It [the system] will be able to handle the continued increase in high-frequency trading and algorithmic trading, and improves on technology that was previously designed for a single market.

‘The new system enables ASIC to interrogate very large data sets and monitor market activity, consistent with the increased use of technology in day-to-day trading. It can also handle the continued increase in trade and message data, which could reach 1 billion messages per day’, Mr Yanco said.

The new system is designed, built and hosted by First Derivatives, and is based on its Delta Stream+ Market Surveillance solution – based on technology used in financial markets for market data capture, alerts and analytics and high frequency and algorithmic trading.

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The suspicious activity reporting rule has a stated commencement date of 1 November 2012, but consistent with ASIC’s commitment to provide industry with a six-month implementation period to allow it to adapt systems and processes, ASIC will waive the obligation to comply with the rule until 20 January 2013.

The obligation will require participants of the ASX and Chi-X markets to notify ASIC when they become aware, in the course of their business activities and in the course of complying with existing obligations, of certain suspicious trading activity.

Senior Executive Leader of Market & Participant Supervision, Greg Yanco, said, ‘ASIC expects that the rule will result in an increased number of useful reports by market participants of potential misconduct. ASIC also expects that these reports may be received at an earlier stage than currently which will, in turn, facilitate early identification by ASIC of possible misconduct’.

The short sale tagging obligation will commence on 1 March 2014 and will require market participants to specify, at the time an order is placed, the quantity of a sell order that is a short sale. For on order book transactions, this will require specification of the number of products that are short at the time the order is placed into the market. For off order book transactions, the number of products that are short will need to be provided in the trade report provided to a market operator.

To assist market operators better understand the operation of the rules and how to comply with them, ASIC has released Regulatory Guide 238 Suspicious activity reporting (RG 238) and Information Sheet 158 Short sale tagging (INFO 158).

Mr Yanco said that the rules bring the Australian market in line with international best practice and reinforce ASIC’s strategic priority of maintaining fair and efficient financial markets.

Specifically in relation to suspicious activity reporting, he said, ‘Experiences from regulators in comparable jurisdictions like the UK, Europe, Canada and the US suggest that supervision of insider trading and market manipulation is greatly enhanced by a robust suspicious activity reporting regime’.

While participants will need to make changes to existing processes and procedures, ASIC’s understanding, based on industry consultation, is that the effect on participant systems will be manageable, given the long lead time being provided. ASIC will work with market participants to facilitate a smooth implementation.

17 July 2012

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