There is debate among industry associations about the benefits of a ‘rules advisory committee’ as proposed by the Australian Law Reform Commission (ALRC).
It was supported by the Financial Planning Association of Australia (FPA) which said “mandatory consultation is vital to ensure transparency in the use of delegated legislative powers and to protect democratic processes in establishing legal requirements”.
The Stockbrokers and Investment Advisers Association (SIAA) also welcomed the proposals as it believed it would help reduce minor breach reports. Currently, SIAA said, the Corporations Act was “littered” with civil penalty provisions which meant breach reports were needed for matters that were minor, technical or inadvertent.
However, SIAA did have minor issues regarding the inclusion of consumer groups on the panel.
However, the Financial Services Council (FSC) disagreed that a committee of this type should be established as it would and that meaningful public consultation with industry groups, consumer groups and legal experts should suffice.
“The FSC does not support a rules advisory committee (or similar) being established by the Corporations Act which must be consulted by the Minister or ASIC (as the case may be) before scoping orders or rules are made.
“The FSC submits that instead of a rules advisory committee (or similar), public and transparent consultations processes, that allow all impacted parties to come forward are more appropriate and have been the longstanding approach in Australia. A public consultation process should already capture all relevant stakeholders.”
Costs and funding were another issue for the FSC as this had not been disclosed by the ALRC and it recommended it was not funded by financial services industry participants.
“The FSC notes that financial services industry participants already pay significant sums in respect of other regulatory activities (notably pursuant to the ASIC Industry Funding Model, to APRA via the Financial Institutions Supervisory Levies, the proposed Compensation Scheme of Last Resort, and various professional industry associations, to name a few).”
