Despite the revelations of the Royal Commission, ASIC is still experiencing deliberate delays from financial institutions in meeting reporting requirements, via Financial Standard.
On Friday, ASIC chair James Shipton told the Parliamentary Joint Committee on Corporations and Financial Services that the regulator is still experiencing “slow and delayed responses from financial institutions and, in some cases, overly technical responses aimed at delay.”
This is despite a key finding of the Royal Commission’s interim report being that the industry has been repeatedly dishonest with both the community and regulators, Shipton said.
“And unfortunately, whilst we are hearing important acknowledgements from leaders of financial institutions about change, such change is not happening as quickly as it should,” he said.
“Due process is important, but it must not be manipulated to disrupt the achievement of fair, appropriate and honest outcomes.”
He then warned institutions of the ramifications if such conduct continues.
“If institutions lie, or are otherwise dishonest with us, we will use every power available to us to punish that behaviour. I am a firm believer in the importance and effectiveness of court-based enforcement tools. They are the foundation of any regulator,” Shipton said.
Further, in defending ASIC on criticisms of its effectiveness in recent years, Shipton questioned whether the entity he leads should be resourced differently to meet community expectations.
Shipton said any comments as to ASIC’s regulatory approach should be considered in the context of its size, stating: “ASIC has been designed over the arc of its history and how Australia’s financial system has evolved over the years to have its own unique characteristics.”
He said now is the right time to discuss whether ASIC and its peers are “right sized” in relation to the new industry funding model; unique characteristics of Australia’s financial system; size of Australia’s financial markets; number of consumers; number of people engaged in the industry; and the clear expectations of the community.
Shipton clarified that he was not demanding greater resources, but instead looking to start an important policy conversation.
“For me, my own experience as a regulator in Hong Kong, in a system that also has an industry funding model, is instructive. There, on an adjusted basis (in terms of financial services GDP and financial services population), Hong Kong’s financial regulators are three times the size of Australia’s,” he said.
