Jeffrey Lucy told the ASIC summer school audience that Australia sits in a unique position with its relatively small size and strong economy.

“Australia is currently on a cusp,” he said. “We are still small enough to recognise and appreciate our domestic idiosyncrasies, but we are large enough to contribute to the global scene. Like the catchcry, we continue to ‘think globally and act locally’ to a large degree.”

But in future, “we will not only need to think globally, but act in a global context as well”.

In order to maximise Australia’s position, regulatory bodies must have a thorough understanding of the increasing scope of global markets, Lucy said.

“The regulatory regimes that underpin each jurisdiction must reflect a clear understanding of the global nature of the issues that confront them and must provide a breadth of options for responses that we can pursue.”

This understanding must include preparation for the negatives that come with a global market, including harsh international competition, cross-border money flows and the flow-on effect of regional corporate collapses and downturns, Lucy said.

And it is in preparing for these situations that global regulation can play its greatest role, the ASIC chairman said.

“As the Asian region, of which we are a part, continues to grow at rates that are currently outpacing other regions, the drive for global regulation in the interests of the broader international economies will increase.”

According to Lucy, ASIC has for some time advocated a strong preference for regulation that is mindful of a cross-border environment. This approach requires consultation, co-operation and collaboration with other bodies to work effectively, he said.

ASIC already consults with groups such as the International Organisation of Securities Commissions (IOSCO) and the Joint Forum, as well as providing representatives on IOSCO’s Technical Committee.

“Additionally, in accordance with our principles for cross-border financial services regulation, we recognise foreign regulatory regimes that are sufficiently equivalent to the Australian regulatory regime in terms of the degree of investor protection, market integrity and reduction of systemic risk that they achieve.”

Lucy aims for ASIC to address the challenges posed by world markets by recognising the global nature of environments Australia operates in, and contributes to; foreseeing downturns or major corporate collapses before they occur; increasing co-operation with international regulators; and being knowledgeable about developing and emerging trends.