After almost two years, the Senate economics references committee has handed down its findings in relation to the Australian Securities and Investments Commission’s (ASIC) investigation and enforcement activities.
In a statement, committee chair Senator Andrew Bragg said that over the last 20 months, the committee has “uncovered the dire state of ASIC”, saying the regulator is an organisation “without transparency, few prosecutions, and a litany of cultural, structural and governance issues”.
Handing down 11 recommendations, Bragg said it is “clear ASIC has failed”.
“Chief among the recommendations is the separation of ASIC into two separate bodies; one focused on companies and the other on financial services enforcement. ASIC conceded during the inquiry that its ‘very wide remit’ impacts its approach to regulatory activity,” he said.
“Separating this broad remit into two individual bodies will provide a more coherent and consistent approach to corporate regulation and law enforcement.”
Alongside this call to split the regulator, the committee also recommended a number of measures to improve governance and transparency.
“Too many Australians have been hurt by ASIC’s persistent failure to enforce the law and win prosecutions. Looking at the cases of Nuix and Dixon Advisory, it was clear to the committee that ASIC’s failure facilitated continued corporate misconduct,” Bragg said.
“The committee understands the pressure of ASIC levies on small business. We have recommended lightening the load on small business by recalibrating the funding model.
“We need regulators to be responsive and transparent, but most of all to be focused on enforcement.”
He added that if the measures are adopted, they would “provide Australians with the protection and confidence which is sadly absent”.
The inquiry, which was initially referred on 27 October 2022, has been plagued with what Bragg called “obfuscation” from the regulator.
In the interim report tabled in the Senate in June 2023, the committee said it was “concerned by ASIC’s behaviour in relation to the commencement of this inquiry”.
“Rather than engaging with the committee in a transparent and accountable manner, from the outset ASIC has chosen to attempt to undermine and influence the process of the inquiry before evidence had been gathered or hearings held,” the interim report said.
That report rejected 11 of 13 claims for public interest immunity made by ASIC chair Joe Longo, with a deadline set for 18 July 2023. ASIC did not supply the committee with the information, leading to Bragg releasing a statement taking aim at the regulator.
“It is disappointing, but not surprising that ASIC has not complied with a unanimous order of the Senate for the production of documents. ASIC has not met our expectations,” Bragg said.
“As representatives, we cannot do our jobs if the agencies, for which we conduct oversight, are permitted to treat Parliament with contempt.
“As it stands, the Senate cannot conduct its inquiry without access to ASIC’s case files. We are unable to comply with our terms of reference.
“This is a serious undermining of the Senate’s role and its investigative powers.”
Last week, Bragg flagged that the final report would address the “pain points” that are hitting financial advisers.
“As chair of the Senate economics committee, I understand financial advisers are under huge pressure,” the senator said on LinkedIn.
“Next week, I will be addressing some of the pain points with ASIC levies in the final report of the Senate economics committee inquiry into ASIC investigation and enforcement.
“I know financial advisers have been ignored by the Labor government on three key areas: ASIC levies, compensation scheme levies/Dixon scandal, unworkable drafting on restricting members from using their super to pay advice fees.”
So this seems to prove that we advisers have paid fees to ASIC for no services, as their remit was too large to manage their workloads.
I expect all asic employees to be clawed back part of their past wages and paid to us directly as compensation
Don’t forget the interest component too.
Too big to fail? Not so. Failed because they were too big. And self-serving.
Above the law? Not so. Bring the full force of law to all the corrupt and self-serving so-called regulators.
Never again let a regulatory body chose how to apply the law. And then hand out penalties. The worst case of vertical integration I have ever seen.
Never again let a regulatory body get to the size ASIC is.
Now they should take a look at Treasury. Regarding the Dixons fiasco, we deserve to know how many public servants we are compensating, for how much, and whether they had any input into the CSLR.
No longo Joe Longo
“Looking at the cases of Nuix and Dixon Advisory, it was clear to the Committee that ASIC’s failure facilitated continued corporate misconduct,” Bragg said.”
So it’s confirmed, ASIC failed to regulate Dixon Advisory adequately, yet advisers who had nothing to do with the whole scheme are left with the bill for compensation. That does not sound fair.
We all know that nothing will happen after the attention-seeking finger-pointers have their moment. They all feed from the same trough. Soon, there will not be enough advisers left to keep topping it up.
To be honest the last time ASIC was lambasted was by Hayne and look at the consequences of that towards our Industry! As we the soft target I’m sure they’ll get all RAMBO on us because we just roll over and take it!!
What’s this! Is this a glimmer of hope I see before me?!
Maybe but it could also be the light on the train exiting the tunnel…
Arrogant
Secretive
Incompetent &
Corrupt
With a single misguided focus to Kill Real Advisers.
#draintheasicswamp
ASICK Organisation needs a big operation or complete dismemberment!
Alan Kirkland’s organisation being accused of hurting Australians after his discriminatory & relentless attacks on Financial Advisers hurting consumers in his previous role at CHOICE!!
Good luck Alan.
Even Senate Committee realises, ASIC failed! What about the lives they ruined without doing their job properly e.g permanently banning a financial planner for insurance churning based on manipulated evidence & with no proper investigation & incomplete files. ASIC should overturn the banning considering the matter was obviously not investigated properly & information was severely manipulated. This financial planner represented himself against ASIC for 2 days, having the courage to do this & now this report showing how incompetent they are. It’s only fair to overturn the banning & review other cases ASIC stuffed up.
VINDICATION
Hooray! Although the heads on sticks for breaking the law make it even more important to remove professional best interest duty advisers outside of Asics remit. The shite that is currently in the corps act exposes all of us to being said head on stick even if the advice was good. Not best ( who decides what is best? Give me their views and I will adopt or differ in professional experience and opinion).Asics should focus on dodgy product providers , scammers and unlicensed advice and encourage the masses to seek advice from licenced professionals. Remove afsls and let advice be provided by professional advisers.
Wow the keystone cops have finally been called out for how completely incompetent they really are and not a moment too soon!
Bragg’s right Australia AND Advisers deserve better
Thank you Senator Bragg! One of the few that get us
Fantastic to see this has been reported in mainstream media tonight as well. It probably wont change anything and possibly it may even make ASIC a bear in the corner, but its about time the public were made aware!
Split the organisation in two but DO NOT appoint anyone from the current ASIC organisation to the two new bodies as you wont fix the mess #draintheasicswamp
Christmas has come early
ASIC has failed Financial Advisers way more than it has failed clients!
Well done Senator….When I entered this industry I followed the law as it’s the right and ethical thing to do. 20 years on, my only conclusion is this industry is deeply conflicted, deep pockets pay, and ASIC is corrupt. I operate from a fear of bad legislation and falling fowl of a party that is clearly adversarial towards Advisers.
Billions are lost to scammers, Advisers committing suicides, Australians unable to afford advice. ASIC more focused on spelling mistakes in FDS and culling advisers to 5,000. Great day.
Unfortunately, splitting ASIC into two will most likely create more Public Servants.
Ah, I see more expense coming.
And more red tape and confusion.
You bet! Only our sector though.
This is all well and good, but will it come in time to save advisers from being financially “reamed” by the CSLR and the Adviser Services Levy?