New senator calls for ASIC 'shake-up'

Senator Rex Patrick, who took Nick Xenophon's seat after he left for state politics in November 2017, has called on new ASIC chair James Shipton to provide a statement of confidence in his long-serving commissioners "at a minimum".

The senator noted that as the chair, CEO and company secretary of AMP have resigned, "senior executives at ASIC are yet to accept responsibility for their failure to properly regulate Australia's leading financial institutions".

"Senior officials who are given responsibility and authority for public purpose must be held to account when that public purpose is not fulfilled," Mr Patrick said.

"In earlier times ASIC Commissioners would have already fallen on their swords; they should not wait any longer to do the right thing and take responsibility for their failures," he said.

Mr Patrick noted the relatively long terms of the top leadership at ASIC: Peter Kell has been deputy chair for five years, before which he was a commissioner; Jon Price has been a commissioner for six years and has 15 years of experience at ASIC; and Cathie Armour has been a commissioner for nearly five years.

"The terms of these Commissioners have included plenty of public warnings and whistleblowing about misconduct in the banking sector, and indeed warnings from within ASIC itself. Yet more often than not the response of ASIC is to shoot the messenger on behalf of the banks," Mr Patrick said.

He pointed to a culture of "subservience and acquiescence when it comes to the major banks and financial institutions" at ASIC, as observed by former ASIC lawyer turned whistleblower James Wheeldon before a Senate inquiry.

"ASIC's senior executives are directly responsible for a softly-softly regulatory approach that has been characterised by a marked reluctance to take robust law enforcement action in relation to the banks and other financial institutions," Mr Patrick said.

"Ultimately, however, the buck must stop with someone – and that includes Commissioners and other senior executives at Australia's corporate regulator," he said.

"It is already clear that ASIC will need to undergo considerable reform and a shake-up anyway."

The calls follow comments by former Prime Minister Tony Abbott on 23 April that all of ASIC's leadership should be sacked and replaced by "less complacent" people.

Nationals senator John Williams told the ABC that ASIC has got to be "quicker, they’ve got to be stronger, they’ve got to be seen as a feared regulator. That is not the situation at the moment."