FPA canvasses co-regulatory model with ASIC

The Financial Planning Association (FPA) has canvassed a closer two-way working relationship between professional bodies such as itself and the Australian Securities and Investments Commission (ASIC).

In a submission filed with Senate Committee reviewing ASIC's operations, the FPA pointed to the resourcing of the regulator and its overall responsibilities and the advantages that might flow from it being "freed up".

"The FPA believe the need to balance respectively limited resources and regulatory oversight responsibilities has pushed ASIC to operate more as an ‘after-event' or reactionary regulator with limited operations in proactive oversight or ongoing supervision and monitoring," the submission said.

"The FPA notes ASIC's role as the regulator overseeing the Corporations Act extends beyond the financial services sector, to govern all corporations and companies. While the FPA's submission draws on our experience as a professional body in the financial services sector, the issues we articulate and the recommendations we propose offer regulatory enhancements and efficiencies for all industries governed by ASIC, as we believe they will support and re-direct the regulator to focus on its core and most valuable consumer protection role of preventing and prosecuting matters of dishonest and fraudulent conduct.

"The FPA recommends that with a closer two-way working collaboration with professional bodies, ASIC could more effectively discharge its legislative mandate to support investor confidence, freeing up the regulator to enable it to expand its legislative responsibilities into areas currently lacking in regulatory oversight," the submission said.

The FPA submission contained a proposed regulatory pyramid, the bottom portions of which dealt with self-regulation and suggested there was a fundamental need to recognise, in the regulatory design, "the role professional bodies can play in assisting ASIC to achieve its mandate under the ASIC Act, in order to maximise the capabilities of the system, as a whole, to improve overall consumer protection, particularly in relation to the bottom sections of the regulatory pyramid."

"The FPA believes the regulatory design should be a dynamic interaction between the government imposed legal requirements, the licensee business imposed rules, and the expectation of professional participants as codified in professional obligations," the submission said.