ASIC chairman points to super and market-based financing
The advent of market-based financing may see regulators such as the Australian Securities and Investments Commission (ASIC) playing a greater role with respect to superannuation funds.
ASIC chairman Greg Medcraft has used an address in New York in his role as chairman of the International Organization of Securities Commissions to point to structural changes driving market-based financing and therefore the need for greater regulatory oversight.
He said this structural change was being driven by increased banking regulation and the growth of the pension and superannuation sectors.
"New rules to strengthen the banking system are imposing higher capital and liquidity requirements," he said. "The net effect of this is often a decreased access to debt capital and an increased cost to business.
"As a result, many businesses are turning to market-based financing to source their capital."
Medcraft said the second driver of market-based financing was the continuing global growth of the pension and superannuation sectors — much of which is invested in debt and equity capital markets.
"A good example of the growth in super is in Australia, where funds in superannuation are expected to grow from $1.4 trillion to $3 trillion by the end of the decade," he said.
Medcraft said the growing importance of market-based financing presented a challenge for market regulators "to ensure we have the right tools and resources in place, so that debt and equity capital markets can perform their critical role in funding economic growth".
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