August 7, 2018
ASIC has received a boost to its enforcement capabilities with the Federal Government announcing it would fund the placement of embedded staff within major institutions to monitor governance and compliance actions.
The move is part of a wider package announced by the Federal Treasurer, Scott Morrison and Minister for Revenue and Financial Services, Kelly O’Dwyer that ASIC would receive a further $70.1 million in funding over the next two years which had been sought by new ASIC Chair, James Shipton.
Of that sum, $8 million would be used to embed the staff in AMP and the four major banks. A further $6 million would be used to improve consumer access to the Financial Advisers Register and ensuring compliance by licensees and financial advisers with the Future of Financial Advice laws.
Other elements of the package would include $26.2 million to accelerate and increase ASIC’s enforcement activities and capacity to pursue actions for serious misconduct against well-funded litigants and $9.4 million to boost supervision of the superannuation sector through strengthened audit and enforcement action.
“…the best practice that they could employ…is a culture of engagement with the regulator, a culture of no surprises with the regulator…”
O’Dywer said the new funding followed a decision by Shipton “…to re-focus ASIC’s strategic direction on proactive enforcement and increase onsite supervisory approaches” and “…builds on the Turnbull Government’s commitment to ensure ASIC is fit for purpose and can pursue and prosecute those who do the wrong thing”.
Speaking at a joint press conference with Morrison and O’Dwyer, Shipton said ASIC would have a team of 20 people in its monitoring team and “…they will be spending significant amounts of time inside financial institutions…depending on the project at hand, depending on the task at hand and depending on the harm that we’re trying to solve for”.
“They will be engaging at every single point in a financial institution to provide that effective regulatory coverage. That could be the CEO, it could be the chair, all the way through to the men and women who are in the particular business unit,” Shipton said.
He added that ASIC had already communicated this plan to financial services institution and had told senior leadership “…that the best practice that they could employ and apply in these situations is a culture of engagement with the regulator, a culture of no surprises with the regulator”.