ASIC backs reforms delay

Watchdog cites ‘strain and stress’ on economy

THE head of the corporate watchdog has backed the Federal Government’s decision to delay implementing a raft of recommendations flowing from the banking royal commission.

Australian Securities and Investments Commission chair James Shipton has declared he supports the sixmonth delay, arguing it is the right move given the “strain and stress” in the economy due to the coronavirus pandemic.

Testifying before a Senate committee looking into COVID-19 and the Australian government’s response, Mr Shipton yesterday said there had been “points of discussions and engagement” with the banking industry with regard to delaying the reforms.

But he stopped short of saying the corporate regulator had been lobbied by the banks.

Mr Shipton also told the committee ASIC was watching out for scams related to the early release of superannuation, including scams where fraudsters impersonated representatives from super funds or other officials in an attempt to con Australians out of their savings.

To date, ASIC had not witnessed any large uptick in payday loans even though some households had struggled under in the economic fallout from the pandemic, he said.

Some of the reforms that were proposed following the royal commission into misconduct in the financial services sector were slated to be introduced by the end of next month.

Earlier this month, Treasurer Josh Frydenberg announced those reforms would be delayed until the end of the year.

Further reforms that were set for December would be pushed back and implemented in July next year, he said.

Reforms that were scheduled to be introduced by June 30 included changes to rules on how financial advisers charge fees to their customers.

Other reforms that were due within weeks included a ban on hawking – or unsolicited sales – of superannuation and insurance products.

Asked by Senator Peter Whish-wilson about that decision, Mr Shipton said ASIC was supportive of the sixmonth deferral of reforms, given the pressures on banks and the broader economy at the moment.

Mr Shipton said ASIC held talks with the government and the banking sector about the delay.