ASIC open to sharing powers but with only one industry body
The planning industry's corporate regulator has admitted a co-regulatory model could work for financial advisers, but said it's only cost-effective and ethically practical for one professional body to share its power.
The Australian Securities and Investments Commission (ASIC) told the Parliamentary Joint Inquiry that while it's clear self-regulation is not desirable for the financial services sector, given the level of risk inherent in financial activities, there is some scope for co-regulation.
However, the regulator said only one professional body should be empowered, to prevent a "race-to-the-bottom" scenario where co-regulators compete to develop the most industry-favourable rules.
Having several regulators would also confuse professionals and consumers when taking action, it said, and ultimately not be cost-effective to the industry.
It stressed the professional body should be independent from the industry participants its regulating.
Whether the professional body would have a similar role to ASIC or a narrower scope would have to be decided by legislators, ASIC said in a submission to the Parliamentary Joint Committee.
The role of the professional body regulator could provide a disciplinary function or concentrate more heavily on professional standards compliance, like regulating and policing minimum entry standards for advisers.
The comments echo those of the Financial Services Council which has called for the establishment of an adviser's standards board which would oversee education and professional standards independent of the current crop of industry associations.
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