Let us finger the real managerial culprits says ASIC
The Australian Securities and Investments Commission (ASIC) has signalled it wants the ability to dig through the layers of management hierarchy to ensure it bans those ultimately responsible for regulatory breaches.
The regulator has told a Parliamentary Joint Committee that giving it the ability to ban managers will prove ineffective if cannot not reach out and finger the right people.
“It is crucial to the effectiveness of such a banning power that the trigger for banning people from management is appropriate,” ASIC said. “It will not be effective if ASIC can only ban those that themselves have directly committed breaches of the law.”
Providing an answer to a question on notice from the committee, ASIC said the role of managers should be to take reasonable steps to ensure compliance with the law by the people they are managing.
“ASIC needs 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,” it said.
The regulator told the parliamentary committee that, currently, ASIC's financial services banning powers do not allow for all poor conduct to be subject to banning action.
“At the moment, ASIC can only ban people from directly providing the services, not from managing that process,” it said. “That may assist with dealing with bad apples, but it does not tackle problems with the tree.”
“This means that ASIC has little ability to control those who actually control the compliance culture and make the significant decisions of a licensee. This could include directors and officers, or compliance managers in larger organisations.”
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
