In the midst of a Productivity Commission (PC) inquiry into competition in the financial services industry, the Government has proposed requiring the Australian Securities and Investments Commission (ASIC) to consider the effects on competition when exercising its powers.
The Turnbull Government yesterday introduced a bill to Parliament that would amend the ASIC Act 2001 to provide that “ASIC must consider the effects that the performance of its functions and the exercise of its powers will have on competition in the financial system”.
The proposed change stems from the Financial System Inquiry of 2015, which recommended that the Government include consideration of competition in ASIC’s mandate. There is no current equivalent in the law directing the regulator’s actions.
In the explanatory memorandum accompanying the bill, the Government said that ASIC was already implicitly required to consider competition, as it is “important to improving the performance of the financial system and will impact on the efficiency and development of the economy”.
The memorandum, circulated by the Minister for Revenue and Financial Services, Kelly O’Dwyer, suggested that specific legislation requiring such considerations would be more reliable though.
“An explicit reference to take competition issues into account would oblige ASIC to consciously consider how its actions may impact on competition in the financial system and will enable ASIC to favour one option over another due to its effects on competition,” she said.
The proposed legislation would also enable the appointment of a second ASIC deputy chair and allow the regulator to employ staff outside of the Public Service Act 1999.
It also specified that the Australian Competition and Consumer Commission (ACCC) would remain as the competition regulator across the economy, as “the measure [was] not intended to limit or expand the scope of ASIC’s regulatory responsibilities”.