Industry still wary of ASIC

Many companies operating in the financial services arena have acknowledged being frustrated in dealing with the Australian Securities and Investments Commission (ASIC), according to a research report commissioned by both ASIC and the Finance Industry Council of Australia (FICA).

What is more, some respondents suggested that ASIC “appeared to assume malicious wrongdoing where breaches occurred”.

The report, released by ASIC and FICA this week, said many were somewhat frustrated in dealing with the regulator because they believed it did not provide sufficient guidance in interpreting legislation, was too removed from the market and did not always understand the implications of its requests on business.

The ASIC/FICA report was nonetheless broadly positive about the influence of regulation on the Australian financial services industry and the actual cost of regulation.

However, it was clear from responses that many companies wanted ASIC to take a more relationship-based approach to dealing with individual organisations and with specific industry sectors.

To overcome some of the perceived problems with ASIC, the report said the main suggestions made by respondents were a reduction in the documentary requirements with respect to Product Disclosure Statements, the provision of better market guidance and closer consultation with industry.

It said that some respondents had asked that ASIC adopt an account-based management approach, which it was felt would help develop a more cooperative mode of working.