Education fund could be lost in market supervision transfer to ASIC
An education and research fund has slipped though the cracks in the imminent transfer of market supervision from the Australian Securities Exchange (ASX) to the Australian Securities and Investments Commission (ASIC).
The Australasian Compliance Institute (ACI) raised the issue. Chief executive of the ACI Martin Tolar said that while there had been a lot of focus on the big picture issues with regards to how the transition was going to work, the ACI’s concern was that the education fund “does not get left behind”.
Tolar said that under the current arrangement the ASX could use any funds raised from market breaches for a research and education fund. So far the fund has raised over $1 million, and is designed to improve the performance of compliance and risk management practices within the broking industry and listed companies. Tolar said that as it stood, the initiative was widely supported.
However, he said the industry was in danger of losing such an important resource with the transition, which would see all funds raised through market breaches go towards the Commonwealth Government’s consolidated revenue.
The ACI has suggested that the Government set up a new fund — and based on informal meetings with ASIC, Tolar said the ACI had received a positive response. However, the challenge lies in the fact that according to the Australian Constitution any fines collected by ASIC must go into consolidated revenue. Therefore, setting up a new fund would be a more complex arrangement.
“We’re suggesting that either all or part of the money collected in fines or fees for any breaches goes back to fund the education fund, that would be administered by representatives of ASIC and members of the financial services industry as well,” he said.
Tolar met with ASIC yesterday, and he said it was positive about the ACI’s suggestions. However, the issue will now have to be raised with the Treasury as it may require legislative change.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
