Regulators under scrutiny from Productivity Commission
The Productivity Commission will undertake a review and study to examine the effectiveness of the multiple regulator model supporting the consumer policy framework in Australia, and assess the effectiveness of the cooperation between the Australian Securities and Investments Commission (ASIC). and the other Commonwealth and state and territory Australian Consumer Law (ACL) regulators.
The study will review the progress of a range issues on which the Commission would call for feedback, with initial submissions due on August 30th. Issues from the previous framework that the Commission raised in the ‘Review of Australia's Consumer Policy Framework' in 2008 would be assessed, including regulatory inconsistency, holes, and unnecessary complexities, as well as confusion over state and territory governments and Commonwealth responsibilities.
While ASIC had a responsibility at the Commonwealth level to enforce the ACL, the issues paper released on Friday had identified that it may also be classified as a ‘specialist regulator', meaning it could be subject to different scrutiny from the Australian Competition & Consumer Commission (ACCC).
The issues paper also contained an information request for the study in specific relation to ASIC, which includes:
- A call for feedback on the effectiveness of the mechanisms used to coordinate the enforcement of consumer financial products (or the financial aspects of consumer products) between ASIC and the other ACL regulators; and
- Analysis on the adequacy of the current arrangements among regulators for identifying ‘extra-jurisdictional' consumer concerns and the development of a national regulator response;
Outlined in the paper was the challenge faced by regulators in ensuring that consumers understand the delineation of responsibilities among ACL and other regulators and that consumer issues were dealt with by the most appropriate regulator. This could see a shift in responsibility for ASIC toward new levels of control on the state level.
In the issues paper, it is suggested the Commission specifically receive feedback and address the following matters:
- The roles of specialist regulators protecting consumers including their interaction with the ACL;
- The complementary roles held by ACL regulators and the effectiveness of the current mechanisms in supporting and improving collaboration and consistency of approach between ACL regulators;
- Outside regulatory models or approaches to consumer protection overseas that may inform in a restructuring of the current national model for higher efficiency and effectiveness; and
- Any possible consequences of changes in the level of resources and regulator involvement in the administration of the ACL.
The draft report will be released in November, with the final findings of the study available as a research report in March 2017.
AUTHOR
Hope William-Smith
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.
