Just as the Australian Securities and Investments Commission is embarking on its post-Hayne 'tough cop' approach to regulation, it has been handed a much stronger penalty regime to work with. Corporate criminals now face 10-year prison terms.Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 received Royal Assent on March 12 and took effect the following day.The new law amends the Corporations Act, the ASIC Act, the Credit Act and the Insurance Contracts Act to introduce new financial penalties and longer prison terms. The changes were in response to recommendations of the 2016 ASIC Enforcement Review Taskforce, which came out of the Financial System Inquiry. The taskforce was asked to address gaps or deficiencies in ASIC's powers to allow more effective enforcement of its regulatory regime.The most serious offences in the Corporations Act have had their maximum terms of imprisonment increased from five to 10 years. These offences include matters relating to duties and power, financial reports and audit, duties of officers and employees, fundraising, financial services disclosure and client money.A range of other offences have had their maximum prison terms increased from six or 12 months to five years. These include areas such as disqualified persons managing corporations, misleading documents relating to takeovers, financial market operators not complying with a notice, carrying on a financial service without an AFSL, knowingly issuing a defective Financial Services Guide, and failure to comply with requirements relating to client money.The new law introduces a financial penalty system that allows for a maximum penalty to be calculated as 10 per cent of the annual turnover of the body corporate, capped at $525 million.The new law also includes a definition of "dishonesty", which did not have a consistent definition in the Corporations Act. "Dishonest" means "dishonest according to the standards of ordinary people".It is an objective test, which means it is not necessary to prove that a defendant knew that the relevant conduct was dishonest. To establish dishonest, it is only necessary to prove that that conduct is dishonest according to the standards of ordinary people.The new law also includes provisions to capture some of the more recent development in financial services, such as breaches related to comprehensive credit reporting.