ASIC to crack down on 'bad' culture
ASIC plans to incorporate culture into risk-based surveillance reviews and use findings to remove licences if firms are not providing “honest” service, the regulator’s chairman Greg Medcraft said in his opening statement to the Senate Estimates Committee this morning.
The regulator will target areas where poor practices may increase the potential for poor conduct which poses risk to investors and consumer trust and confidence.
Mr Medcraft said that the regulator would take administrative action where it finds flaws.
“For example, ASIC can seek to remove the firm’s licence on the basis that it’s not providing its services efficiently, honestly and fairly,” he said.
“ASIC will incorporate culture into risk-based surveillance reviews, use the surveillance findings to better understand how culture is driving conduct among those we regulate and communicate to industry and firms where we have a problem with their culture and conduct.”
However Mr Medcraft said there were only limited ways for ASIC to address culture directly in the laws. Further he said that those affected by poor culture were those that could least afford to be.
“Sadly those who get fleeced are usually not necessarily the country's wealthy, but everyday Australians, who might have no more than their house and their super and perhaps a nest egg,” he said.
“People are often left with a loss they cannot afford. And that is why cleaning up culture is crucial. That is why restoring trust and confidence is crucial.”
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