Regulators warned of compliance over-kill
By Ross Kelly
THE Federal Government’s top finance industry advisory group — the Financial Sector Advisory Council (FSAC) — is calling on Australia to resist excessive regulation of the financial services sector, while strongly criticising the overlapping consumer protection roles of regulators.
In a report released by the Federal Treasurer, Peter Costello, last week, FSAC claims unnecessary regulatory legislation will hamper business investment opportunities both in Australia and overseas.
The report also calls for an adherence to principle-based rather than rule-based regulation, stating this will result in a relatively simpler and less costly regulatory framework.
While the report rarely mentions any specific legislation, its concerns echo industry complaints about the compliance burden imposed by the Financial Services Reform Act (FSRA).
The report also states that the overlapping consumer protection roles between the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) and between ASIC and the Australian Competition and Consumer Commission (ACCC) are a source of confusion in the industry.
“Recent regulatory changes, while underlining the primary roles of ASIC for consumer protection in the financial system, may have led to the roles of the other agencies becoming superseded to some extent.
“This issue requires further clarification,” the report states.
Other recommendations put forward in the report include a call for further reform in the superannuation industry.
“Superannuation, particularly, requires attention to reduce the opaqueness of the industry through enhanced disclosure and education.
“Some industry sectors, particularly superannuation, remain relatively high cost.
“Removing a number of remaining structural impediments, such as portability rules and lack of fund choice can be expected to encourage further rationalisation and efficiency,” the report says.
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