High profile industry academic denounces watchdog
TheAustralian Securities and Investments Commission (ASIC)has been lambasted by a high profile banking and finance professor with claims it often deliberately fails to investigate investors’ complaints.
Tom Valentine, a professor at the University of Western Sydney and once consultant to the Federal Government and financial industry, unleashed the verbal attack at anInvestment and Financial Services Association (IFSA)lunch last week.
Valentine told delegates how ASIC often greets investor complaints with hostility and “flails around looking for ways not to investigate them”.
Valentine added that while the regulator has investigated a few high profile cases in recent times, it tended not to investigate the majority of complaints made.
An ASIC spokesperson said the regulator receives and assesses about 7,000 complaints every year from the general public and that it treats every complaint courteously and seriously.
ASIC claimed not all these complaints relate to breaches of legislation or raise regulatory issues, but that over 50 per cent of complaints resulted in some form of response from the regulator.
Valentine’s comments were part of a broader attack on Australia’s system of investment regulation.
He said Australia had lost its way in terms of regulating investment markets, because of a “messed up” and “peculiar structure”, referring to the inter-relationship and responsibilities of the three regulators — theReserve Bank of Australia (RBA), theAustralian Prudential Regulation Authority (APRA)and ASIC.
Valentine believes the jurisdictional problems of the current model for regulation demands a complete rethink of the system.
He proposed a model where one industry body would take responsibility for the regulation of insurance, currently looked after by APRA, while another would regulate investments and superannuation, with the RBA responsible for all deposit-taking institutions.
Valentine also claimed the arbitration of investor disputes should be the responsibility of an independent, commercial dispute resolution body.
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