An interim report detailing the complexity of Commonwealth legislation regulating corporations and financial services was tabled in Parliament on Tuesday (30 November).
The report, drafted by the Australian Law Reform Commission following a three-year review, makes 13 recommendations for simplification, with the aim of promoting meaningful compliance with the substance and intent of the law.
In a statement issued on Tuesday (30 November), the ALRC argues that the Corporations Act has almost doubled in size over its 20-year lifespan to fill over 13,000 pages.
“Dozens of instruments made by ASIC now ‘notionally amend’ the law, but it is not easy to determine which provisions have been amended, or how,” the ALRC said.
Commenting on the report’s findings, president of the ALRC, the Honourable Justice SC Derrington, emphasised the commission’s key goal.
“The ALRC’s task is not simply to ‘tidy up’ the legislative framework in service of theoretical objectives. At the core of this Inquiry is the importance of ensuring the law is fit for purpose” Justice Derrington said.
“The law must facilitate industry, recognising the dynamic nature of the financial services sector and its significant contribution to the Australian economy. At the same time consumers need to be able to understand and navigate the law to protect their legal entitlements.”
The ALRC has submitted to Parliament a draft model for how the law could be designed, noting that the government could begin implementing the recommendations immediately.
The inquiry is part of the government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released in February 2019.
The commission is now seeking feedback on 16 proposals, and eight questions for reform by 25 February.
Further interim reports are due in September 2022 and August 2023, with the final report due by 25 November 2023.
Yep it’s the golden age of compliance….. remember when we drove Financial Advisers out of business where a spelling mistake meant the advice wasn’t in the best interest of members…..people had to sign 3 forms to pay a fee, and to make a $1,000 co-contribution to super advisers had to do 90 page SoA’s, that took 5 days…. the good days.
If they want something fit for purpose, they need to properly investigate financial services businesses, talk to financial planners and their clients. There needs to be round tables, qualitative research and testing. This stupid process whereby government bureaucrats put out a report and ask for submissions, is deeply flawed and this is the reason why we ended up in this position. They will get elegant submissions from well funded conflicted parties and academics, and little if any input from those who will actually be doing the work and zero from consumers who are the most affected by bag legislation and regs.
Spot on. Unfortunately consumer interests have been completely lost in recent years, with the hijacking of consumer associations by political activists who are more interested in promoting their own careers and narrow ideologies, than the real interests of consumers.
Politicians need to spend more time engaging directly with their constituents and adjusting the regulatory environment according to real world requirements. That is how democracy is supposed to work. Concentrating so much power in the hands of unaccountable ivory towered bureaucrats and extremist political activists is a perversion of democracy.
Thanks for your comments, Giggty. We would welcome a roundtable discussion with you and your associates. Please email financial.services@alrc.gov.au if you are interested. A full list of our consultees to date is included in the report, including the following financial service providers and their representatives: Advisers Association, Association of Financial Advisers, Financial Planning Association, Australian Finance Industry Association, Insurance Council of Australia, Financial Services Council, Australian Banking Association, Association of Superannuation Funds of Australia, National Insurance Brokers Association, Chartered Accountants ANZ, FINSIA…
“ unnecessarily complex”….no, surely not!!
How could that have possibly happened when all they were doing was to manufacture multiples of regulations, laws and restrictions in order to control financial services and protect consumers????
It seems incomprehensible how this could have happened when Advisers have been screaming about regulatory overreach, over complication and duplication for the last decade.
Maybe they simply haven’t been listening!!
Nothing more certain the Canberra crew will start acting on this immediately…..laughable really.
Thanks for your comments KC. We have been working with Treasury throughout the process, and we are confident that government will give serious consideration to implementation of our recommendations. Unravelling the significant existing complexity will be no small task, however, as foreshadowed in the Financial Services Royal Commission.