RC questions whether ASIC used its powers
At the same time as the Federal Government has moved to hand the Australian Securities and Investments Commission (ASIC) more powers, the Royal Commission has questioned why it has not appropriately used the powers it already had.
Counsel assisting the Royal Commission, Michael Hodge QC asked ASIC deputy chairman, Peter Kell how often the regulator had used its powers with respect to superannuation in relation to unconscionable conduct and contraventions by corporate trustees and was told few, if any, actions had been pursued by the regulations.
“And so, what I wonder is when you say ASIC would need to have more powers to have a greater role as a conduct regulator, is that a statement that you see as being easily reconcilable with the fact that ASIC already has a number of powers which it doesn’t exercise?” Hodge said.
“Do you think that the way in which ASIC has gone about commencing or not commencing civil penalty proceedings in relation to, say, the adviser service fees issue, or the plan service fees issue, gives confidence that ASIC would, if it had expanded powers under the SIS Act, exercise those powers in a way that would deter misconduct?” Hodge asked.
Kell responded that ASIC “already had some outcomes against the entities, that we have significant investigations underway which are likely to lead to litigation, and that we’ve obtained hundreds of millions of dollars in compensation to date as an indication that we take these issues very seriously”.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
