An internal review has recommended that the Australian Securities and Investments Commission (ASIC) establish a dedicated enforcement office to beef up the corporate regulator’s supervisory activities.

The proposed enforcement unit could be based on similar setups adopted by regulators in the US, UK, Germany, New Zealand and Hong Kong.

“ASIC’s enforcement capability and effectiveness is today, more than ever, a vital integer in the success of the Australian economy,” ASIC General Counsel Chris Savundra says in a letter to the Hayne royal commission.

“That Office of Enforcement will pursue uniform processes and procedures which will overlay the current ASIC enforcement activities and specialist teams involved in enforcement.”

He says the guiding principles and operational guidelines of the enforcement office should focus on “deterrence, public denunciation and punishment of wrongdoing by way of litigation and not by the pursuit of negotiated outcomes”.

This proposal and other recommendations made by the review are outlined in the letter published on the royal commission’s website ahead of next Monday’s public release of the final report following its submission on Friday to the Federal Government.

Mr Savundra says the office would be “responsible for the investigation and enforcement of contraventions of the corporations and consumer credit legislation”.

ASIC will decide on this and other recommendations of the internal review before it responds.

The regulator initiated the review last October after an external review of its enforcement practices by Treasury, which subsequently suggested 50 ways to improve ASIC’s supervision of corporate behavior and practices.

ASIC has come under fire over its handling of poor conduct by the major banks and other financial services firms, particularly over the regulator’s apparent preference for negotiated agreements over public denunciation and punishment for wrongdoing.