Financial services industry: alert, but not alarmed
The financial services industry needs to be alert to the fact that the Government is tightening regulatory control of the industry and its markets — not in a legislative rush, but via an incremental expansion of existing jurisdiction.
In the space of just three months, the Commonwealth has twice chosen to use regulatory expansion to impose change, the most recent being its decision to give the Australian Securities and Investments Commission (ASIC) supervision of financial markets, including the Australian Securities Exchange (ASX).
Previously, the Government chose to use regulatory change to impose its new intra-fund advice regime — a move that precluded any substantial parliamentary debate.
There is, of course, nothing wrong with the Government moving to give the regulator closer supervision of financial markets. Indeed, the move is hardly surprising in circumstances where many observers believe the role of the ASX to have been conflicted by its status as both supervisor and participant.
But the question many might ask is whether ASIC really needed any additional powers with respect to the ASX or any other financial markets.
And on the face of it, nothing will have changed in terms of day-to-day supervision of listed companies. Explaining the move, the Minister for Financial Services and Corporate Law, Chris Bowen, said individual markets such as the ASX would retain supervision of listed entities.
He argued that a whole-of-market supervisor would effectively consolidate current individual supervisory responsibilities into one entity, streamlining supervision and enforcement.
The minister might have added that the Federal Government was also concerned about being seen to be doing the right thing in the context of public opinion, the global financial crisis and a number of recent corporate collapses.
There is no cause for anyone in the financial services industry to take great exception to the Government giving ASIC yet more supervisory power, but it would be wrong to view the latest move in isolation.
If the financial services industry is wise, it will remain alert to what may emerge as a pattern of regulatory extension by stealth.
— Mike Taylor
AUTHOR
Mike Taylor
Recommended for you
In this week’s episode of Relative Return Insider, AMP chief economist Shane Oliver joins the show to discuss Australia’s stagnating productivity ahead of the government’s economic reform roundtable, and how picking all the “low-hanging fruit” for reform in the ’90s helped kick off a surge that has since stalled out.
In this episode of Relative Return Insider, host Keith Ford is joined by Cyber Daily deputy editor David Hollingworth to take you inside the evolving landscape of cyber crime, how even huge companies can be at risk of breaches, and what that means for anyone trying to understand the risks.
The latest episode of Relative Return sees host Laura Dew chat with Richard Ivers and Mike Younger, co-portfolio managers at Prime Value Asset Management, on their newly launched Microcap Fund and opportunities in small and mid-cap shares.
In this week’s episode of Relative Return Insider, hosts Maja Garaca Djurdjevic and Keith Ford dive into the week's top news, from investors remaining blasé about tariff announcements to bitcoin surging and unemployment numbers.
