The corporate watchdog will be granted greater powers to investigate claims of insider trading, along with power to intercept telephone calls, with an aim to crack down on the difficult-to-prosecute crime.

The move comes after ASIC's effectiveness as a regulator came under intense scrutiny following three high-profile civic case losses -- One. Tel, AWB and Fortescue Metals Group -- in the past two months.

The person indulging in any sort of sharemarket-related offenses will have to face strict fines and prolonged jail terms, under proposed reforms issued by Corporate Law Minister Chris Bowen yesterday.

Financial Services Minister Chris Bowen, yesterday claimed fines as big as $5 million would help curb criminal activity, while ASIC's regulation would be bought into line with other regulators such as the Australian Competition and Consumer Commission.

The maximum prison sentence available for individuals will be doubled to 10 years.

Emerging ASIC's search grants powers and permits ASIC officers to have access to telecommunications interception material accumulated by the Australian Federal Police.

The ASX has also welcomed ASIC's proposed new powers. A spokesman revealed they could increase the number of successful outcomes resulting from its referrals on alleged market breaches.