Investigator questions ASIC insto focus
The corporate regulator’s recent enforcement activity around banks and financial institutions will be short-lived due to political realities, anticipates a former ASIC staffer.
With ASIC ramping up scrutiny of institutions such as the Commonwealth Bank and Macquarie in recent months, Stephan Kasanczuk, director of consultancy Wolfthink and a former investigator at ASIC’s predecessor, told ifa not to hold its breath.
“The only reason ASIC is dealing with the big players now is that there has been too much public outcry and that equates to bad politics,” said Mr Kasanczuk, who has also held risk and compliance governance roles at Colonial, ING Direct and the Arab Bank.
“Once the heat dies down a little, it will be back to focusing on financial advisers, managed investment scheme operators and smaller players.”
Mr Kasanczuk said the corporate regulator’s ability to take on the major institutions is limited because the directors and executives of these institutions have the “financial backing to take on the regulator in court” and are in possession of “political connections”.
The consultant also criticised ASIC for allowing institutions to oversee their own client compensation and advice review processes, arguing there is a “conflict of interest” present even where external reviewers are appointed and that the process should be overseen by “an external party similar to FOS”.
While in its formative days ASIC had a collaborative approach to regulation and employed a wide range of “market participants”, it is now subject to the “public service culture”, Mr Kasanczuk said, adding that this shift in regulatory approach to one that is more concerned with “heads on sticks” has made it ineffective in tackling major structural concerns.
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