Limitations on proposed regulator oversight authority not effective
Not allowing the Financial Regulator Oversight Authority to assess and prepare a report about the effectiveness of a particular regulatory action or enforcement matter undertaken by the two regulators would not allow the new authority to properly perform its functions.
This was a view taken by the Association of Superannuation Funds of Australia (ASFA) its in submission to Treasury on the new authority that would oversee the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).
“Regulatory actions are the culmination of processes occurring within APRA and ASIC. To fulfill the essential role of the Authority and genuinely examine how the regulators exercise their statutory powers, the authority must have the capacity to assess regulatory actions,” ASFA said.
“This will aid in the identification of systemic issues within the regulator and support improvements to decision making and enforcement to the benefit of the Australian community.
“Clearly, this should not require the authority to assess each and every regulatory or enforcement action. However, it will be necessary for the Authority to assess particular actions, or groups of actions, in order to properly assess APRA and ASIC’s overall effectiveness.”
ASFA said it the authority was not granted a sufficiently broad role in assessing the regulators, it would be unable to fulfil the function outlined by the commissioner to strengthen the accountability of ASIC and APRA, and particularly in enforcement and regulatory decisions.
ASFA noted that the authority should be able to assess and report on particular regulatory actions or enforcement matters as was necessary as part of its broad assessment of APRA’s and ASIC’s effectiveness.
“The authority role should be to assess regulatory and enforcement actions to support its broader assessment of APRA’s and ASIC’s effectiveness. The authority would assess matters such as the influence of process, governance and culture within the regulators on regulatory and enforcement actions, to support improvements within APRA and ASIC over time,” it said.
“The authority would not be charged with investigating individual complaints or reviewing decisions of APRA and ASIC, as it is not a body of administrative review. This should remain the role of bodies such as AFCA, the Administrative Appeals Tribunal and the courts.”
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