ASIC obliged to approve all codes: Richard Batten
There is no reason why the Australian Securities and Investments Commission (ASIC) should not approve a code of conduct for a single licensee or dealer group, says Minter Ellison partner Richard Batten.
In ASIC Consultation Paper 191, which deals with the approval of codes of conduct for the exemption of the opt-in requirement, the regulator expresses "serious concerns" about codes with a limited membership and "whether they can ever be credibly and independently administered".
But according to Batten, there is nothing in the relevant sections of the Corporations Act that stipulates independent administration as a requirement for the approval of codes of conduct.
"ASIC just needs to be satisfied that the person is in fact bound by the code - independent administration is not a requirement," Batten said.
ASIC must also be satisfied that the code is enforceable and is enforced, he added.
Recent comments by ASIC commissioner Peter Kell about an "independent eye" being cast over codes of conduct are a result of "this 'independent administration' that ASIC has developed off its own initiative - it's not from the statute," Batten said.
There is already an independent overseer of industry codes of conduct, and that is ASIC, he said.
"ASIC is independent. And ASIC is the regulatory body with responsibility for supervising licensees who engage in the provision of financial services. ASIC is the body for ensuring that licensees comply with the law," Batten said.
"ASIC is seeking constant consulting on [CP191], and one area of potential feedback is that we don't think that independent administration is necessary here. So long as ASIC is satisfied that the code is enforceable and enforced," Batten said.
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