The Turnbull Government today announced a $127.2 million reform package to better protect Australian consumers by strengthening the Australian Securities and Investments Commission (ASIC).
The broad reform measures will equip ASIC with stronger powers and funding to enhance surveillance capabilities better enabling our corporate watchdog to combat misconduct in Australia’s financial services industry and bolster consumer confidence in the sector.
The reform measures comprise the Turnbull Government’s response to the ASIC Capability Review, commissioned in July 2015.
The five recommendations to government will be immediately implemented. These focus on governance, recruitment, annual performance discussions with the Minister and most importantly, removing ASIC from the Public Service Act. This last measure will support ASIC to more effectively recruit and retain staff in positions requiring specialist skills and also implements a finding of the Financial System Inquiry (FSI).
The Government will invest $61.1 million to enhance ASIC’s data analytics and surveillance capabilities as well as modernise ASIC’s data management systems. An additional $9.2 million will also be made available to ASIC and Treasury to ensure they can implement appropriate law and regulatory reform.
The Government is also providing ASIC with $57 million to enable increased surveillance and enforcement on an ongoing basis in the areas of financial advice, responsible lending, life insurance and breach reporting.
As recommended by the FSI, the Government will introduce an industry funding, or ‘user-pays’ model for ASIC, to commence in the second half of 2017.
From 2017-18, ASIC’s costs will be recovered from all industry sectors regulated by ASIC.
Industry funding ensures that the costs of regulation are borne by those entities that have created the need for it, rather than the Australian public.
The Government recognises that continuity of ASIC’s leadership is necessary to provide support for the implementation of these important reforms and to bolster consumer confidence.
Therefore the Government intends recommending to the Governor-General that Mr Greg Medcraft’s term as ASIC Chairperson is extended for a further 18 months.
To further support Mr Medcraft and the ASIC Commissioners in their important work, the Government also intends to appoint an additional ASIC Commissioner.
This new Commissioner will have experience in the prosecution of crimes in the financial services industry.
The Turnbull Government recognises that our financial system touches the lives of every Australian family and business and that our banks have not always lived up to the standards we expect.
That’s why we are continuing to act to ensure our regulators are tough cops on the beat with the resources and powers they need to respond to misconduct and prosecute those who seek to take advantage of consumers.
This package builds on the Turnbull Government’s response to the FSI which set out a wide suite of policies to improve our financial system, including a specific set of measures to improve consumer outcomes.
Today’s package is the next step in the Turnbull Government’s plan to ensure improved outcomes for Australians, and to support ASIC in its work to address misconduct in the financial sector.
Source: The Commonwealth of Australia