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Rogue financial services providers face inconsistent punishments and are often treated lightly by international standards.
These findings are among those in a report that ASIC has released ahead of the regulator's submission to the federal government’s Financial System Inquiry.
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ASIC revealed that individuals who provide financial services without an Australian Financial Services Licence can be fined up to $34,000 – but those who engage in credit activity without an Australian credit licence face a maximum hit of $340,000.
The regulator said it is reasonable to question the large discrepancy given that financial services providers increasingly operate across several industries.
Individuals who provide financial services without a licence in comparable overseas jurisdictions face much larger fines than the Australian maximum of $34,000.
The maximum fines are $5.6 million in the US, $5.3 million in Canada and $700,000 in Hong Kong.
Prison terms can also be higher overseas. The maximum sentence in Australia is two years, compared to 20 years in the US, five years in Canada and seven years in Hong Kong.
ASIC chairman Greg Medcraft said tough penalties have a powerful deterrent effect.
“Those who break the law and cause severe damage should face tough penalties,” he said.
“At the lower end of the scale, more proportionate sanctions can work better. For example, infringement notices can provide more timely and efficient outcomes.”
Meanwhile, the MFAA has announced that ASIC deputy chairman Peter Kell will address its annual conference in May.
“Mr Kell will provide an update on the NCCP Act and its impact on broker compliance, which has been a major industry issue since it was introduced in 2010,” according to the association.
