The corporate regulator wants more investigative powers and tougher penalties for white-collar criminals, after a wide-ranging reassessment of the way it carries out its job.
The proposals are part of the Australian Securities and Investment Commission's 200-page submission to a Senate inquiry into its performance.
They include calls for greater whistleblower protections and a national exam for financial advisers that would prevent "bad apples" from working in the industry.
The submission marks a philosophical shift for the regulator, calling into question its role in governing markets and calling for policy changes to allow greater intervention into suspected misbehaviour.
"These proposals would improve ASIC's ability to deliver on our legislative responsibilities and increase our effectiveness," it said.
The inquiry into ASIC follows scathing criticism of the regulator following Fairfax Media revelations of serious misconduct and a cover-up by Commonwealth Bank's financial planning arm and the failure of ASIC to act promptly.
While ASIC defended its role in the CBA affair, it recommended a number of policy changes, including enhanced search warrant powers.
"ASIC's investigative tool kit is lacking in relation to its search warrant powers, leading to inefficiencies and delays, and is not adequate to meet the complexity of modern corporate and financial investigations," it said.
"A simple but effective change would be to expand the search warrant powers in the ASIC Act."
It also called for harsher penalties for corporate crimes and questioned the "conduct and disclosure" approach that defined its role as watchdog.
"Internationally, regulators are looking for a broader tool kit to address market problems, moving beyond traditional conduct and disclosure regulation to design regulatory interventions that address the types of problems investors and financial consumers often experience in financial markets."
The conduct and disclosure approach is guided by the theory that markets need minimum regulation to work efficiently.
The CBA financial planning scandal resulted in the banning of seven planners who controlled hundreds of millions of dollars of client money. ASIC extracted a two-year enforceable undertaking in October 2011 despite being tipped off in late 2008 by a group of CBA insiders who wrote to ASIC warning it what was going on.
In its submission, ASIC called for an extension of whistleblower protection to include contraventions of criminal legislation.