RC questions whether ASIC used its powers
At the same time as the Federal Government has moved to hand the Australian Securities and Investments Commission (ASIC) more powers, the Royal Commission has questioned why it has not appropriately used the powers it already had.
Counsel assisting the Royal Commission, Michael Hodge QC asked ASIC deputy chairman, Peter Kell how often the regulator had used its powers with respect to superannuation in relation to unconscionable conduct and contraventions by corporate trustees and was told few, if any, actions had been pursued by the regulations.
“And so, what I wonder is when you say ASIC would need to have more powers to have a greater role as a conduct regulator, is that a statement that you see as being easily reconcilable with the fact that ASIC already has a number of powers which it doesn’t exercise?” Hodge said.
“Do you think that the way in which ASIC has gone about commencing or not commencing civil penalty proceedings in relation to, say, the adviser service fees issue, or the plan service fees issue, gives confidence that ASIC would, if it had expanded powers under the SIS Act, exercise those powers in a way that would deter misconduct?” Hodge asked.
Kell responded that ASIC “already had some outcomes against the entities, that we have significant investigations underway which are likely to lead to litigation, and that we’ve obtained hundreds of millions of dollars in compensation to date as an indication that we take these issues very seriously”.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
