New body to oversight regulators
Australia’s financial services regulatory regime would be subject to greater scrutiny and oversight under a new approach contained within the Financial System Inquiry (FSI) final report recommendations.
And at least a part of that new oversight approach would involve the establishment of an oversight body – the Financial Regulator Assessment Board.
While making the point that Australia’s regulatory architecture does need major change, it also makes clear that there is room for improvement, including with respect to Government oversight.
“Government currently lacks a regular process that allows it to assess the overall performance of financial regulators,” the report said. “Regulators’ funding arrangements and enforcement tools have some significant weaknesses, particularly in the case of ASIC. In addition, it is not clear whether adequate consideration is currently given to competition and efficiency in designing and applying regulation.”
It said its recommendations were therefore aimed at refining the regulatory system and keeping it fit for purpose by improving the accountability framework governing the financial services regulators via the establishment of a new Financial Regulator Assessment Board to review their performance annually.
The report recommendations also pointed to a need to “rebalance the regulatory focus towards competition” by including an explicit requirement to consider competition in ASIC’s mandate and conduct three-yearly external reviews of the state of competition.
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