ASIC to work with regtechs to address poor market disclosure

ASIC to work with regtechs to address poor market disclosure | Insurance Business Australia

ASIC to work with regtechs to address poor market disclosure

The Australian Securities and Investments Commission (ASIC) has announced it will team up with five regulatory technology (regtech) entities to work on an initiative that aims to address poor market disclosure.

The Business Research and Innovation Initiative (BRII) Regulatory Technology (Regtech) Round, which was initiated by the Department of Industry, Science, Energy, and Resources, will assess the potential of regtech to solve challenges across government agencies and departments.

The five regtech entities that ASIC will work with to explore the potential of using technology to help identify and assess poor market disclosure by listed companies are: Bedrock AI Aus Pty Ltd, DigitalX Limited, Eastern Analytica Pty Ltd, Listcorp Pty Ltd, and Pyxta Pty Ltd.

Each company will receive grants of up to $100,000 to conduct a feasibility study in response to the corporate disclosure challenge for around three months. ASIC will work with the five successful regtech firms throughout the feasibility study stage. 

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In the next stage of the BRII Regtech Round, two of the regtechs might receive further grants of up to $1 million each to develop and test a proof of concept over a further 15 months. 

ASIC's BRII challenge to applicants will focus on developing a technology solution to help it analyse corporate disclosures and other datasets to identify and assess compliance by listed companies with a range of requirements, including:

  • continuous disclosure (price-sensitive disclosure) and other disclosure obligations to the market;
  • financial reporting obligations;
  • the prohibition against misleading or deceptive disclosure (such as misleading categorisation of market announcements); and
  • the prohibition against practices that manipulate the pricing of securities.

“ASIC deliberately designed a challenge around market disclosure that is a representative problem so that potential regtech solutions can also be applied to other problem use cases by agencies and industry,” said ASIC Commissioner Cathie Armour.

“Working towards an innovative solution has the potential to transform ASIC's ability to harness technology to reduce regulatory burden while enhancing market integrity.”