ASIC responds to senator’s conflict of interest concerns

In a written question on notice following the supplementary budget estimates hearings in November last year, independent senator David Pocock raised a range of queries about the Australian Securities and Investments Commission’s (ASIC) disclosure of conflicts of interest.

Senator Pocock queries included visibility of ASIC’s conflicts of interest register and why it isn’t included on the senior leadership page, as well as the details around what “potential conflicts of interests have been declared by senior leadership” in relation to the companies that ASIC regulates.

Responding to the senator’s concerns, the corporate regulator said that while ASIC staff have obligations to disclose conflicts of interest under both legislation and its own policies, the registers for this are on internal systems and are “not publicly available and are not otherwise published on the ASIC website”.

“The particular disclosures of ASIC staff are personal records and ASIC considers that the publication of these disclosures may reveal and prejudice confidential investigations or inquiries conducted by ASIC or will otherwise be prejudicial or damaging to the privacy of those persons or entities named in the disclosures,” ASIC explained.

“Accordingly, those records are securely stored on ASIC’s internal systems and are not published. ASIC only publishes a register of gifts and benefits on its website.”

The regulator added that ASIC staff are required to disclose gifts and complete annual training on its policies and procedures.

“ASIC staff declare a range of interests associated with their duties. As noted above, those disclosures are personal records and contain potentially sensitive information in the context of ongoing ASIC investigations,” it said.

ASIC’s registers fall under two categories, with one being solely for commissioners and the other for its broader staff. While staff are not publicly named alongside the disclosure, commissioners have their gifts, benefits or hospitality specified.

However, the disclosures are almost all for complimentary attendance of conferences or dinners hosted by other bodies.

Indeed, for the first nine months of 2024, ASIC commissioners only made 16 disclosures in total – and none were for an amount greater than $410.

The only gifts that could be viewed as contentious in any way were the six complimentary memberships of the Qantas or Virgin lounge, which are given a value of “unknown”.

During the Senate estimates hearings in November, in which chair Joe Longo and deputy chair Sarah Court confirmed their membership of the Qantas Chairman’s Lounge, Pocock questioned whether this was appropriate for the regulator.

“So you’re comfortable being the body that ensures Australia’s financial markets operate fairly, transparent and efficiently, and that they are free from misconduct, and you’re happy to take a gift from a company you regulate?” he asked.

Responding, Longo said: “We have disclosed our Chairman’s Lounge membership and we have an established policy that deals with conflicts of interest and, as things stand, if we have any issues with Qantas, then we will deal with them.

“We don’t consider membership of the lounge as being a material impediment to discharge of our duties.

“I don’t think membership of the lounge is a conflict that would require any of us to recuse ourselves from an issue with Qantas.”

In his subsequent written questions, Pocock asked ASIC: “When you last investigated Qantas please provide minutes and other documents that detail how conflicts of interests were raised, declared and then managed as part of this process.”

The regulator was less forthcoming in answering this question.

“ASIC Commissioners are required to declare material personal interests associated with their duties, including in relation to ASIC investigation matters. Those disclosures (and associated records) contain potentially sensitive information in the context of ongoing ASIC investigations,” the regulator said.

Pocock didn’t limit his questions on the subject to ASIC, also providing these written questions on notice to both Treasury and the Reserve Bank:

1. Who in the Department has a Qantas Chairman's Lounge membership - name and position?
2. Who in the Department has a Virgin Australia Beyond Lounge membership - name and position?
3. How many spouses of officials also have access to either lounge (I'm not asking for names on this question, just numbers)?

While Treasury is yet to respond, the RBA noted that governor Michele Bullock, deputy governor Andrew Hauser and their respective spouses have membership of the Qantas Chairman’s Lounge, while Bullock and her spouse also have membership of the Virgin Beyond Lounge.

Liberal senator Andrew Bragg also took an interest in ASIC’s potential conflicts of interest, asking: “Please set out all details of hospitality (if any) provided by superannuation funds to ASIC Commissioners or the Chair in their respective terms of office.”

In response, ASIC said that no commissioners or the chair have been provided with hospitality by a super fund.