During the course of the financial services royal commission – the interim report of which was heavily critical of ASIC’s reluctance to litigate – the federal government announced $70.1 million of new funding initiatives for the regulator.
Speaking at the annual AIOFP Conference on the Gold Coast on Wednesday, ASIC regional commissioner for Queensland John Weaver told delegates that the regulator will be ramping up its enforcement plans, increasing penalties “tenfold” and using all of its powers to clamp down on misconduct in financial services.
“There is a government and community expectation that they want us to speed up what we are doing and to do more,” Mr Weaver said.
“It’s about increasing our capacity to pursue actions for serious misconduct through the greater use of external expertise and resources.”
ASIC chair James Shipton told a parliamentary committee earlier in the year that the regulator requires far more resources if the government wants to see increased legal action against corporate Australia.
ASIC’s $70 million taxpayer-funded war chest will finance this.
Mr Weaver revealed that $26.2 million of the purse will go towards an enforcements “special account”, which receives around $30 million in government funding per year, mostly to fund large court cases such as the Westpac BBSW case.
Over $9 million will go towards regulation of the superannuation sector and $8 million will be spent on “close and continuing monitoring” – a new supervisory and surveillance agenda that will initially apply to the major banks.
Mr Weaver said ASIC also wants to make the AFSL licensing regime “more difficult”.
“If you look at the UK, you have to positively demonstrate that you meet a lot of criteria; whereas here the onus is different,” he said.
“I think ASIC’s view is that it is easier to keep people out of industry who shouldn’t be in industry than it is to kick people out of industry. Therefore the bar for licensing should be set at an appropriate level and the regulator should seek to find out whether someone should have a licence or not, and have an appropriate power to refuse that licence.”
ASIC has also expressed a strong desire to have its own version of APRA’s Banking Executive Accountability Regime (BEAR), which currently only applies to ADIs, superannuation funds and insurance companies, which fall under the remit of the prudential regulator.
“That takes out huge parts of the profession and we think individuals in those senior manager roles should have accountability,” Mr Weaver said.
He acknowledged a view held by many financial advisers that it is often “the people at the bottom” that are the ones ASIC focuses on, rather than the major players.
Legislative reform is also in the works, including significantly heavier penalties for misconduct.
“There are tenfold increases for some penalties,” he said.
“There will also be a disgorgement power, which is about taking the profit out of wrongdoing.”
The only problem we really have is that current laws are not applied to the big players. If ASIC applied the same pressure to the big banks and AMP that they did to Dover then we wouldnt have any problems.
OMG you are kidding yourself. If they synchrons, others and self licensed had to get up at RC they would have been slaughtered. Fee for no service, everywhere. If ASIC starts applying the same laws and enquiries that have been applied insto trust me there will be no industry.
Great generalisation tm but how do you actually know that? I actually know from experience that our dealership is very heavy on compliance and all investment clients need a up to date csa with proof the services have been completed annually. Then of course they need to opt in every 2 years. They would never let advisers get away with fee for no service and thats why we arent in the news. I think you assume way too much with little actual knowledge. For example Syncron for one is mostly risk based. Usually anyone that says trust me is lying there’s a generalisation for you.
Can anyone tell me where you can find ASICs list of penalties?
I’m convinced that it;s in ASIC’s mantra to put as many advisers as possible out of business. I feel like Anne Frank, waiting for the knock on the door.
‘Heads on sticks’ is a sickening term they are using in ASIC meetings when setting quotas. Surely there is something rotten and debase in their culture? Time for ASIC to go or at least have an oversight body assigned it.
923A is not a street address!
Meanwhile, accountants will be allowed to continue giving inappropriate, conflicted, investment and superannuation advice with impunity.
Can ASIC at least pretend they have a small amount of respect for those that they regulate?
Interesting story but a very misleading headline. AOIFP is about as independent as a CBA adviser. Just check with their recently departed Chair. Recommending your clients lend money to an associated business to fund your financial advice practice expansion is the opposite of independent. Come on IFA you can do better. Don’t start throwing around the term independent unless you mean it.
Spot on. Very few of the AOIFP members could refer to themselves as independents.
Id like to know why invite Weaver in the first place, and if so did they pay him or does our asic fees now cover Weaver spouting rhetoric at conferences. Keep your enemies close fair enough but dont give them air time to heap crap on the industry at your conferences. Its like the bikies asking and paying for raptor to present at thier xmas party.