The Parliamentary Joint Committee (PJC) on Corporations and Financial Services has called on ASIC to release a series of guidelines that distinguish the difference between criminal fraud and market failure.
The committee made the recommendation as part of its annual statutory oversight report into the activities of the corporate regulator.
It is the committee's view that ASIC needs to take steps to use available information to: "collate and analyse definitions of, and approaches to, financial crime, with a view to developing standard definitions and classifications that can be used across the Commonwealth".
In light of the PJC's inquiry into the collapse of Trio Capital, it was "particularly interested" in the matter of fraud and financial crime and the degree to which regulations can minimise and expose misconduct, PJC committee deputy chair senator Sue Boyce said in the report.
"The committee is particularly interested in the matter of defining and dealing with financial crime and determining clear and consistent guidelines as to whether activities are fraudulent," Boyce said.
"It would also encourage further efforts to quantify the extent of criminal activity and acknowledges the difficulty of doing this when terminology is fluid and categories are variable."
As well as expressing concern over lacking definitions, the PJC also agreed with evidence provided to the committee by Monash University department of business law and taxation senior research fellow Dr George Gilligan regarding ASIC's education activities.
Gilligan noted that ASIC's reports have concentrated on deterrence and investigation issues, and have not given as much information about ASIC's activities in the 'educative-normative area', the report, filed to parliament earlier this week, said.
"Dr Gilligan felt that ASIC reports could better employ empirical data to show how ASIC's resources are allocated according to its six strategic priorities, and to emphasise the value of its educative activities," the report said.
"This would enable better publicity about its successes."
As a result, the PJC has recommended that ASIC acquire empirical evidence of its resource allocation to its educative activities and outcomes of these activities.
"This information should be more fully publicised in ASIC's regular reports and other media accessed by investors especially retail investors," the report said.
In regards to ASIC's activities in holding "gatekeepers" to account, the corporate regulator said there had been 17 enforcement outcomes over the previous six weeks, including six criminal convictions initiated by ASIC.
The report said the "adequacy of ASIC's resources will continue to be monitored by the committee". It will continue to consider the allocation of ASIC resources.
"The committee emphasises the importance of education to reduce poor investment decisions, to promote responsible company governance and to facilitate transparent product description," it said.
"For this reason, it will be pursuing ongoing updates on the uptake of new administration and database systems, as these are integral to ASIC's educational role."
