"From Monday, ASIC will oversee stockbroker and investment bank trading, as well as potential legal breaches such as market manipulation. New fines, penalties and powers are set to take effect that will allow ASIC to conduct raids, use phone taps and seek increased jail terms for perpetrators of market offences such as insider trading.
Twenty-three ASX staff have taken jobs at ASIC to beef up its surveillance activities.
ASX Compliance will also oversee the operating rules of the ASX and Sydney Futures Exchange, adapted to avoid overlap with the ASIC rules.
The move follows a decision by the federal government last year to overhaul market supervision because of the advent of competition, as market operators, including Chi-X, moved to set up new exchanges to rival the ASX.
"When the government announced this change it was put on the basis that it would remove that perceived conflict of interest that the ASX had in supervising its own market. So the very fact that we are supervising the market will lift that perceived conflict," Ms Gibson said.
"The work we have done we think will improve the efficiency and effectiveness of the overall surveillance proposition. Simply because there was an element of repetition between the ASX and us and that will now be removed."
Ms Gibson also said the regulator had learned a lot from its two-year Project Mint investigation, set up to examine false rumours in the market.
Embarrassingly, the project ended earlier this year after failing to secure a single conviction.
ASIC subsequently backed away from imposing rules on the handling of confidential information before capital market transactions. "We became a lot closer to the broking community as a result of that exercise (Project Mint) and we continue to build on those connections."
"We have refined our manner of dialogue with the brokers when we need to see the trading. One of the benefits of Project Mint was we really established for the first time a real connectivity between the ASIC market watch team and the brokers," Ms Gibson said.
"I believe that the manner in which the market handles information has improved in the last 12 months. That is what I am being told. That people are careful about spreading any stories. People are careful about the manner in which they couch opinions."
Also under the changes that take effect on Monday, 169 stockbrokers registered and supervised by the ASX will now be regulated by ASIC. The maximum fine that ASX can issue for breaches of its settlement and clearing rules will not change (from $1 million), but the maximum fine for breaches of the operating rules will be reduced from $1m to $250,000.
"They (brokers) will have to talk to us a lot more than they used to," Ms Gibson said.""
Lets hope they do a better job than the one they do regarding unlisted companies. I have shares in a company that has 1900 shareholders. That company has not issued a financial statement for 4 years, has a board that is not elected by shareholders, had as its financial adviser a bankrupt that is now in prison for fraud and has not had an annual meeting for almost 4 years. Numerous and regular complaints have met with no action to fix the situation.