Give us more banning power says ASIC’s Medcraft

The Australian Securities and Investments Commission (ASIC) chairman, Greg Medcraft has reinforced the regulator’s desire to have increased banning powers covering people working in management positions in the financial services industry.

Medcraft has told Senate estimates he believes the power is “vitally important” in dealing with people in management roles within financial services companies.

“There is currently a review into ASIC's enforcement regime, including the issue of ASIC being able to ban people from managing firms providing financial services,” he said. “At the moment, we can only ban people from directly providing the services, not from managing that process.”

He said the present regime “might help deal with bad apples, but it doesn't tackle problems with the tree”.

“ASIC sees this power as vitally important,” Medcraft said. “It is crucial to the effectiveness of such a banning power that the trigger for banning people from management is appropriate. It won't be effective if we can only ban those that themselves have directly committed breaches of the law.”

“The role of managers should be to take reasonable steps to ensure compliance with the law by the people they are managing,” he said. “We need to be able to remove managers who seriously fail that standard and whose management failings have contributed to misconduct in a firm and thus losses to consumers.”