ASIC funding boost to put ‘supervisors’ in big banks, AMP

It will also provide $6.6 million for ASIC to implement its new whistleblower protection laws, by allowing it to better “receive, assess, triage and address” disclosures about misconduct; and a further $6 million for ASIC to promote Australia as a leader in the development of regulatory technology (regtech).

The funding boost comes after Mr Shipton, who was appointed ASIC chairman last year, did the rounds in Canberra to outline his strategic direction. He wants to lift standards and culture in the banks to help restore trust, which has been battered by the banking royal commission and ASIC’s own enforcement actions and tough rhetoric under former chairman Greg Medcraft.

After the last round of the Hayne inquiry suggested ASIC had not been aggressive enough to ensure banks are compliant with the government’s unfair contract terms (UCT) laws, more funding will also be given for this, and to improve consumer access to new register of financial advisers and to ensure licensees and financial advisers comply with the Future of Financial Advice (FOFA) laws.

The new $70.1 million is in addition to the $121.3 million the government gave ASIC in 2016 to lift its investigative and surveillance capabilities, and will more than compensate for the reduction, in the budget, in ASIC’s funding from $346 million to $320 million after some projects ended.

Treasurer Scott Morrison and Minister for Financial Services Kelly O’Dwyer will provide more funding to ASIC to focus on “proactive enforcement”.  Alex Ellinghausen

‘Tougher cop’

The move to put new ASIC supervisors inside the banks and AMP suggests Mr Shipton wants ASIC to operate more in the style of the Australian Prudential Regulation Authority, which has teams of proactive supervisors dedicated to particular institutions in order to identify issues before they blow up into problems.

“For the first time, ASIC will be funded to embed corporate cops directly within Australia’s five largest financial institutions – the big four banks and AMP – to monitor governance and compliance actions,” said the Minister for Revenue and Financial Services Kelly O’Dwyer.

“It will ensure that ASIC is on the front foot when it comes to considering any deficiencies in the governance and compliance structures of these large financial institutions, so as to prevent harm to consumers before it occurs … These new resources will ensure that ASIC is the tough cop on the beat – the tough cop that all Australians need, and expect, ASIC to be.”

The additional resources come after the government, which has been under pressure from Labor to get tougher on bank misconduct, announced in April ASIC would get tougher criminal and civil penalties, including longer prison terms for Corporations Act breaches and bigger fines.

Treasury has also released for comment a new bill to provide a new “design and distribution obligation” and a “product intervention power”, as recommended by the financial system inquiry. This will also enable ASIC to be more proactive, by allowing it to intervene in the sale of harmful products to retail consumers. The comment period for the amended bill is open until August 15.

Source link Finance News Australia

Enter your Email Address

Leave a Reply

Your email address will not be published. Required fields are marked *