Commissioner Kenneth Hayne called for the new oversight authority for APRA and ASIC to be independent of government, and should be established by legislation to assess the effectiveness of each regulator in discharging its functions and meeting its statutory objects.
“The authority should be comprised of three part-time members and staffed by a permanent secretariat,” he said.
“It should be required to report to the minister in respect of each regulator at least biennially.”
According to Mr Hayne, the legislation to establish the oversight body should:
- provide that the authority is independent of government;
- empower the authority to conduct inspections of either regulator at will;
- empower the authority to issue a notice to either regulator requiring it to produce documents or provide information in any form;
- empower the authority to issue a direction to APRA or ASIC in connection with the adoption and implementation of the BEAR principles;
- require the authority to report to the minister, and through the minister to Parliament, in respect of each regulator at least biennially;
- authorise the authority to report separately on particular matters if the authority thinks it appropriate and necessary; and
- require the authority to produce or commission quadrennial capability reviews of each entity.
Mr Hayne said it remains to be determined which entity should assume responsibility for the additional oversight and assessment.
He cited ASIC chair James Shipton’s suggestion that the Council of Financial Regulators (CFR) could be used as the forum for assessing:
- Both the effectiveness of financial regulation (in terms of stability and conduct) in Australia; and
- The effectiveness of individual regulators.
However, Mr Hayne said he’s “not in favour of the CFR being charged with the second task”.
“The CFR serves as an important, formal occasion for discussion between the financial regulators. It is essentially a forum for co-ordination between the various regulators,” he said.
“I have already emphasised the importance of regulatory co-ordination. Adding an assessment function to the CFR’s remit would mark a radical departure from the current conception of that body. I do not support such a departure.”
The government agreed with Mr Hayne’s recommendation, noting that an independent assessment of ASIC and APRA’s strategic performance against their overall mandate was lacking.
“The government is committed to maintaining the independence of the financial system regulators. Accordingly, this body will not have the ability to direct, make, assess or comment on specific enforcement actions, regulatory decisions, complaints and like matters,” it said in response.
“The Financial Sector Advisory Council will be disbanded given the establishment of this new body and consideration will be given to streamlining other accountability mechanisms.”
Why bother, there wont be much left to regulate once Brokers & Advisers leaver their industries….
Pytnonesque. The watchers being watched by more watchers. Probably cop another fee for the new mob
New Bent-Coppers…. 3 part-timers and 1 full timer, and probably secondments from ASIC and APRA themselves. ?
Kell could be up for it – heard he’s unemployed?
nah kell has done his time, 7 years. he is pining for a role at one of the big instos as head of governmental relations
Just what we need, an authority to police the police. This would not have been an issue if ASIC actually had teeth and done their job effectively.
Unfortunatley when ASIC went from having proper enforcement to lip service and writing nice press releases on regulations it lost its credibility. Most qualified investigators moved out of ASIC as real investigations were reduced it became a KPI ORGANISATION rather than compliance ,education and investigative action-
Once the rotten eggs know there is little likelihood of being caught they continue on their merry way ripping and gouging.
Matters sent to ASIC had to fit its criteria of being in the “public interest” unfortunately no one knew in ASIC “what was public interest.”
ASIC became reactive when they should be proactive- 5 years down the track it will be the same old again as it has been since the 1980’s all the bravado dies down as Politians etc retire or move on and there is something move important.
i’m sorry but if you need a regulator to regulate the regulators wouldn’t that suggest the system is broken.Get ride of the regulator for lack of best interest duty ,lack of training and non disclosure of financial gains, just like they would to a planner.
Are not Government supposed to regulate the regulators…..Lazy gits dont want to do any work!
My thoughts exactly