The Turnbull Government is injecting a further $70.1 million into the Australian Securities and Investments Commission (ASIC) to ensure the corporate regulator has the resources and powers it needs to combat misconduct in the financial services industry and across all corporations for the protection of Australian consumers.
This new funding will bolster ASIC's enforcement capabilities and enable it to undertake new regulatory activities and investigations, so as to better deliver on its mandate of combatting misconduct in corporations and in the financial services industry.
The additional funding follows a decision by ASIC's new Chairman, James Shipton, to re-focus ASIC's strategic direction on proactive enforcement and increase onsite supervisory approaches.
It also 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. This was reinforced by the Government's appointment of a new Deputy Chairperson for ASIC, Daniel Crennan QC, who has a key focus on enforcement action.
The package of measures includes:
- $26.2 million to accelerate and increase the intensity of ASIC's enforcement activities and enhance its capacity to pursue actions for serious misconduct against well-funded litigants, through the Enforcement Special Account;
- $9.4 million to boost supervision of the superannuation sector by strengthening audit and enforcement action to improve transparency and outcomes for superannuation members;
- $8 million to implement a new supervisory approach in respect of Australia's five largest financial institutions (the big four banks and AMP) by, for the first time, embedding dedicated staff within these institutions to monitor governance and compliance actions;
- $6.8 million to establish a dedicated taskforce which will conduct a proactive, targeted and thematic review into corporate governance to identify and pursue failings in large listed companies, including deploying staff to conduct new on-site surveillance and investigations;
- $6.6 million to implement the Government's reforms to whistleblower protection laws, so that ASIC can better receive, assess, triage and address whistleblower disclosures about misconduct; and
- $6 million to promote Australia as a world leader in the development and adoption of regulatory technology solutions for the financial services industry.
The remaining funds will be directed towards improving consumer access to the Financial Advisers Register; enhancing ASIC's enforcement work on the unfair contract term protections for small businesses; and ensuring compliance by licensees and financial advisers with the Future of Financial Advice laws.
This broad-ranging package builds on the strong action to date by the Turnbull Government to boost the resources and capability of ASIC to improve consumer outcomes, including:
- providing $121.3 million in additional funding in 2016 to bolster ASIC's investigative and surveillance capabilities;
- announcing the strengthening of criminal and civil penalties by increasing terms of imprisonment and fines, increasing the maximum civil penalties can that be imposed by the courts, and allowing ASIC to strip wrongdoers of profits illegally obtained, or losses avoided, from contraventions of the law;
- further boosting ASIC's regulatory toolkit by improving search warrant powers and providing access to telecommunications intercept materials;
- introducing an industry funding model to ensure that instead of taxpayers, those entities who create the need for regulation pay for it;
- consulting on a new product intervention power to enable ASIC to intervene in the sale of harmful products to retail consumers;
- legislating to remove ASIC employees from the Public Service Act to allow ASIC to attract and retain the best staff;
- appointing a new Chairman of ASIC, James Shipton, who brings deep regulatory and global financial market experience to the agency and a new strategic approach; and
- appointing a new second Deputy Chairperson, Daniel Crennan QC, with a focus on enforcement, and who brings significant enforcement experience.
The Turnbull Government is committed to ensuring ASIC is equipped with the resources and powers it needs to effectively detect, deter and punish those who do the wrong thing, to improve community confidence and outcomes for consumers and investors in the financial services and corporate sectors.