The Australian Securities and Investments Commission (ASIC) has announced it will work with five regtech entities on the challenges of corporate disclosure as part of the federal government’s Business Research and Innovation Initiative (BRII).

The regtech round of the BRII will assess whether challenges faced by government agencies and departments can be solved using regtech. 

ASIC’s corporate disclosure challenge, which involves the regtech firms Bedrock AI, DigitalX, Eastern Analytica, Listcorp and Pyxta, will focus on poor market disclosure.

The challenge explores using a technology solution to analyse corporate disclosures and other datasets to help the regulator identify and assess compliance with a range of requirements.

These include continuous disclosure and other disclosure obligations to the market and financial reporting obligations, as well as prohibitions against misleading or deceptive disclosure and practices that manipulate the pricing of securities.

“Working towards an innovative solution has the potential to transform ASIC’s ability to harness technology to reduce regulatory burden, while enhancing market integrity,” said ASIC commissioner Cathie Armour.

As part of the initiative, grants of up to $100,000 each will be available to the five successful small-to-medium regtech enterprises, allowing them to conduct a feasibility study over roughly three months in response to the challenge while working with ASIC.

“ASIC deliberately designed a challenge around market disclosure that is a representative problem so that potential regtech solutions can also be applied to other problem use cases by agencies and industry,” said Ms Armour.

Two of the regtechs may receive further grants of up to $1 million each to develop and test a proof of concept over 15 months under the next stage of the BRII regtech round.