Why business distrusts ASIC
Australian companies do not entirely trust the modus operandi of the Australian Securities and Investments Commission (ASIC), according to the results of a stakeholder survey released by the regulator.
The survey, conducted by the Allen Consulting Group, has formed the basis of a strategic review of ASIC, but the criticisms of the regulator contained in the full stakeholder survey result extend much further than those initially outlined by ASIC when explaining the implementation of changes resulting from the strategic review.
What the business responses to the survey make clear is that business stakeholders do not believe that the sanctions imposed by ASIC are necessarily proportionate to the misconduct committed or that the enforcement action pursued by the regulator is consistent or fair.
What is significant about the business response to the Allen Consulting Group survey is that the majority held Australian Financial Services Licences.
The business responses to the survey revealed that while business believed ASIC’s overall performance was reasonable, there was a view that the regulator tended not to administer the law with a minimum of procedural requirements.
The Allen Consulting Group analysis said that the business view enunciated via its survey suggested respondents were slightly negative or negative about whether ASIC communicated well with business, helped small business to understand their obligations, found the right solution to most problems, responded to new products and new ways of doing business and understood business’ needs.
It said that business through ASIC underperformed with respect to identifying and dealing with emerging problems.
Looking at how the regulator deals with people who don’t comply with the law, respondents believed it concentrated on easy targets, focused on punishment at the expense of prevention and was too cautious about taking action to enforce the law.
If ASIC wants to improve its standing with business, it needs to reduce red tape, focus on principles and outcomes rather than the rules and work with companies to solve their problems.
AUTHOR
Mike Taylor
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