ASIC to be put under spotlight
THE nation’s corporate watchdog will be put under the microscope after the Federal Government announced its first sweeping review of the entity in 17 years.
The Australian Securities and Investments Commission, which has come under scrutiny for its pursuit of a string of high-profile cases, will be gauged on how it allocates its resources and powers to deliver its remit.
The review – the first since ASIC was born out of the 1998 Wallis Inquiry – has been prompted by a recommendation from the David Murray-chaired Financial System Inquiry for ASIC’s regulatory activities to be funded through a user-pay model.
“In assessing ASIC’s approach to its statutory objectives, the review may provide observations, but not make recommendations on ASIC’s regulatory framework or powers,” Assistant Treasurer Josh Frydenburg said.
Over time, ASIC’s responsibilities have broadened to cover regulation of the Australian sharemarket, financial services, consumer protection and financial literacy.
The Productivity Commission’s Karen Chester will chair the review, while former Queensland Commission of Audit chief Mark Gray and leading legal expert David Galbally QC are also on the panel.
The review, expected to be completed later this year, comes a month after ASIC chairman Greg Medcraft called for the watchdog to be granted greater powers to pursue companies in the wake of the damaging financial advice scandal.
Mr Medcraft told a Senate estimates hearing that the watchdog was limited in how it could take action against companies deemed to have a culture complicit to law-breaking behaviour.
“We think that when a (company) officer breaches a law ASIC administers – and culture is responsible – then the officers and the firm should be responsible,” he said.
“We think the officer and the firm should be subject to civil penalties and administrative sanctions (and) actioned by ASIC in the civil courts just like we can do now for other market misconduct.”