The Australian Securities and Investments Commission (ASIC) is concerned new anti-money laundering and terrorism financing legislation may dilute its own power under the Corporations Act.

Commenting on the exposure draft bill, Director of Enforcement Policy and Practice Louise Macaulay said ASIC was happy for the Australian Transactions Reports and Analysis Centre (Austrac) to take responsibility for the new arrangements. But she says the relationship between the two bodies will have to be carefully considered.

“ASIC notes the new functions and powers of Austrac will require the existing Memorandum of Understanding and relationship between ASIC and Austrac to be renewed and possibly expanded,” she said.

The investments watchdog has also warned that some of the wording in the bill may lead to intelligence being missed. It fears financial service providers may fail to report suspicious transactions because of the varying definitions used between the new Act and existing legislation.

“ASIC notes that the requirement in the bill to ‘know your customer’ may be confusing to reporting entities that are also licensed under Chapter 7 of the Corporations Act.

“ASIC is strongly of the view that an amendment to the ASIC Act is required to ensure that there is no restriction on suspicious matters being reported to ASIC once the bill is enacted.”

ASIC spokesman Angela Friend told Sunrise Exchange News the regulator is confident its suggestions will be carefully considered before the final legislation is put to Parliament.