ASIC can review top 50 planning groups in 18 months
The Australian Securities and Investments Commission (ASIC) has released data stating it could conduct ‘high-intensity surveillance' of the top 50 groups providing financial planning advice in a year and a half.
ASIC released the numbers yesterday as part of its annual report and stated that high-intensity surveillance which "lasts for more than two days and includes both on-site visits and desk-based reviews" could be carried out on the top 20 groups in 0.7 years and the next 30 groups in 0.8 years.
The time frames were based on the number of surveillances conducted in the 2013-14 financial year period covered in the annual report but the period could be less than 18 months if surveillance visits across the two groups were carried out concurrently. ASIC has already stated it would review the six largest planning groups in the coming months.
ASIC stating the remainder of the 3391 Australian Financial Services Licensees providing personal advice would be covered by "primarily reactive surveillances". The 1454 licensees providing general advice would also be covered by reactive surveillance.
ASIC also listed the number of staff involved in the licensing of financial services providers as 28 while those involved in surveillance and enforcement numbered 110.
ASIC chair Greg Medcraft defended the regulator's role in surveillance and enforcement stating in his report "ASIC is a law enforcement agency. We use around 70 per cent of our regulatory resources on surveillance and enforcement".
"A key aspect of what we do is holding gatekeepers to account. For those who intentionally break the law, we will make the best use of our resources and powers to ensure the ramifications are severe," Medcraft said.
The corporate regulator stated that during the 2013-14 financial year it had cancelled or suspended 23 Australian Financial Services Licences (AFSL) with a further six having conditions imposed on their AFSL.
A total of 34 people were banned from the industry for a period of time, with 20 of those being permanent while two other people "agreed to stay out of the industry permanently".
Medcraft also stated that with a budget reductions announced in the last Federal Budget ASIC was likely to see staff numbers fall with a corresponding impact on proactive surveillance.
"Our budget has been reduced by around $120 million over four years. This is in addition to the increased efficiency dividend of around $47 million over four years, and other savings measures," Medcraft said.
"In 2014—15, our operating budget will reduce by $44 million or around 12 per cent. Our average staffing levels will fall by 209."
"We have anticipated the effect of these cuts and have been proactive in conducting a voluntary redundancy campaign. We will continue to adjust our resource allocation to reflect the available funding, and our statutory role. One trade off is that our proactive surveillance will substantially reduce."
AUTHOR
Jason Spits
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