ASIC chair James Shipton has flagged that representatives from the corporate regulator could be embedded within major banks within a few weeks’ time.
In a joint statement yesterday, Treasurer Scott Morrison and the Minister for Revenue and Financial Services Kelly O’Dwyer announced that the government would provide ASIC with $70.1 million which would go towards strengthening ASIC’s enforcement capabilities.
Mr Morrison and Ms O’Dwyer confirmed $8 million of the new funding will go towards executing a “new supervisory approach” which would include embedding ASIC staff within NAB, ANZ, CBA, Westpac as well as AMP for the purposes of monitoring governance and compliance.
Speaking in Melbourne alongside Mr Morrison and Ms O’Dwyer, Mr Shipton said outlined how quickly a team from the regulator could be “going onsite”.
“We will be initially starting, very soon, in the weeks ahead, with a particular focus on governance structures and a particular focus on breach reporting,” Mr Shipton indicated.
This would involve a team from ASIC of “up to 20 people” temporarily based within the big banks.
“They will be spending significant amounts of time inside financial institutions. That may be days, may be weeks, may be months, depending on the project at hand, depending on the task at hand and depending on the harm that we're trying to solve for.”
Furthermore, the ASIC agents would have free reign in engaging with staff “at every single point in a financial institution to provide that effective regulatory coverage”.
“That could be the CEO, it could be the chair, all the way through to the men and women who are in the particular business unit. We will calibrate our response depending on the challenge at hand and the task that is before us,” Mr Shipton said.
He urged banks to develop a strategy for “positive and productive engagement with regulatory agencies” to the end of creating a “positive culture” within financial entities.
Ms O'Dwyer said the new funding for ASIC came after Mr Shipton conducted a strategic review that found the regulator needed “better resources to be able to ensure that their supervisory approach can be much more part of the day-to-day activities of some of our biggest financial institutions”.
“So, for the first time, we're going to see ASIC actually having ASIC people in our top four banks, our big banks, and also AMP, as our five biggest financial institutions in this country.
“That will mean that there is a greater ability for the regulator to be able to prevent misconduct,” she said.
Mr Shipton said that the embedding of ASIC staff would have an impact on decision-making.
“We will have supervisory officers embedded for significant periods of time inside these large financial institutions because I know it makes a difference to the way that they behave.
“I know that it will make real, positive outcomes, when it comes to the way financial institutions should treat customers – and that should be fair.”
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