In a statement from Federal Treasurer Scott Morrison the “measures will equip ASIC with stronger powers and funding to enhance surveillance capabilities better enabling our corporate watchdog to combat misconduct in Australia’s financial services industry and bolster consumer confidence in the sector.”
The announcement comes after the government received pressure from the opposition to do more to investigate the financial services industry.
In early April, the leader of the opposition Bill Shorten said that if the Labor government won the election it would hold a royal commission into misconduct in the banking and financial services industry.
The package is made up of $61.1 million to improve ASIC’s data analytics and surveillance capabilities as updating ASIC’s data management systems. An additional $9.2 million will also be “made available to ASIC and Treasury to ensure they can implement appropriate law and regulatory reform.”
The government will also provide ASIC with $57 million to enable increased surveillance and enforcement on an ongoing basis in the areas of financial advice, responsible lending, life insurance and breach reporting.
“As recommended by the FSI, the Government will introduce an industry funding, or ‘user-pays’ model for ASIC, to commence in the second half of 2017,” Mr Morrison said.
“From 2017-18, ASIC’s costs will be recovered from all industry sectors regulated by ASIC.”
As widely reported, ASIC head Greg Medcraft’s term, which was drawing to a close, will be extended for a further 18 months.
Further, there will be an appointment of an additional commissioner to ASIC with special expertise in prosecution.
ASIC will also be exempt from the Public Service Act 1999, in an effort to make it easier to recruit people from the corporate sector.
The government will also recommend that the financial services ombudsman changes its thresholds to provide greater access for the treatment of claims and compliance.
In addition, Mr Morrison announced there will be another review which looks at the broader ranging tribunal models that could be considered by the government “to ensure that people’s complaints can get to a point of mediation and consideration” within a reasonable period of time without having to use lawyers”, The Australian Financial Review reported.
ASIC welcomed the announcement in a media release, saying it will enable “further surveillance and enforcement in areas such as financial planning, responsible lending, life insurance, and misconduct and breach reporting”.
“It will also allow us to build our technological capacity to identify and assess risks and market misconduct,” ASIC chair Greg Medcraft said.
“ASIC has long believed that those who generate the need for regulation should pay for it,” he added.
I don’t understand how Medcraft’s term gets extended. A fresh face may have been ideal especially when throwing more money into the pot….oh wait, and FOS gets higher thresholds?