INTHEBLACK November 2021 - Magazine - Page 31
Above: Joni Pirovich, Mills Oakley
Left: Hema Raman, Australian
Securities and Investments
Commission
“THE BROADER UNIVERSE OF CRYPTO
ASSETS IS NOT CLEAR CUT – WHAT
PERCENTAGE FALLS CLEARLY IN ASIC’S
REMIT OR CLEARLY OUT, OR FALLS
SOMEWHERE IN THE MIDDLE? THE REALITY
IS THAT THE CLARITY THAT’S NEEDED HERE
IS A MATTER FOR GOVERNMENT.”
HEMA RAMAN, AUSTRALIAN SECURITIES
AND INVESTMENTS COMMISSION
“The issuer will need to have the relevant financial
services licence.
“Then, any market or platform that trades that
particular crypto asset will need to have
an Australian market licence.
“Our position is that it’s the responsibility of the
particular platform to determine whether the crypto
asset trades as a financial product, and they need to
come to us for the relevant licences.”
Raman says this is because crypto assets differ
greatly, and their functions and features can completely
change over time.
She says the people who are closest to a crypto
asset are the ones who need to make the call on what
licences they need to have approved by ASIC.
In addition to being able to invest on currency
trading platforms, Australians may soon be able to
access exchange-traded products (ETPs) that provide
retail investors with exposure to crypto assets.
ASIC has issued a consultation paper (CP 343)
seeking feedback on ETPs that have crypto assets
as their underlying assets.
Key areas of focus for ASIC are identifying crypto
assets that are appropriate underlying assets and
establishing good practice in respect of pricing, custody,
risk management and disclosure. “Market operators
and product issuers need to be mindful of meeting their
existing regulatory obligations when creating, operating
and allowing such products, so they can be facilitated in
a way that maintains investor protections and Australia’s
fair, orderly and transparent markets,” ASIC says in a
statement.
GREY AREA
Raman notes that there is a wide range of crypto
assets, some of which are financial products that ASIC
regulates, and others that are not. “It is a very large ‘grey
area’. Exchange-traded products are clearly financial
products and come within ASIC’s remit,” she says.
“But the broader universe of crypto assets is not clear
cut – what percentage falls clearly in ASIC’s remit or
clearly out, or falls somewhere in the middle?
“The reality is that the clarity that’s needed here is
a matter for government.”
Raman says the consultation paper on ETPs
(including exchange-traded funds) is to ensure ASIC
identifies the right standard of practice required.
“This is a ‘live’ question for us, and it has been
prompted by the amount of interest we’ve seen in
Australia,” she says.
“Our interest is to put sufficient guard rails around
it. Being a product that provides exposure to crypto
assets on a regulated platform has a field of protection
as compared to accessing cryptos directly.”
intheblack.com November 2021 31