Chris Bowen (Prospect, Australian Labor Party, Minister for Financial Services, Superannuation and Corporate Law) Share this | Hansard source

in reply—I do thank those honourable members who have contributed to this debate, the member for Cowper, the member for Moreton and in his own very special way the member for Fadden. While I may quarrel with some of the points the member for Cowper made, I will not on this occasion go through those and I would acknowledge the constructive approach he has taken to this very important legislation. The Corporations Amendment (Financial Market Supervision) Bill 2010 does give effect to a government decision to transfer responsibility for supervision of Australia’s domestic licensed financial markets from market operators to ASIC.

The reforms as set out in the bill will change the way financial markets in Australia are supervised. These changes will further enhance the integrity of Australia’s financial markets and will contribute to the goal of making Australia a financial hub. It is important that the supervision of Australia’s financial markets be transparent and independent. It is also important that any actual or perceived conflicts of interest be avoided. Consequently, it is appropriate for an agency of the government to perform this important function.

The decision to transfer responsibility for supervision of Australia’s financial markets to ASIC is a significant one which will stand the operation of Australian financial markets in good stead into the future. By removing the requirement for markets to supervise themselves, this bill meets Australia’s G20 commitment to protect the integrity of financial markets by avoiding conflicts of interest. This reform is also in line with the move towards centralised or independent regulation in leading jurisdictions. ASIC is well placed to take on the role of whole-of-market supervisor and has been fully resourced to perform this role. ASIC’s role as whole-of-market supervisor will enhance the stability and integrity of the market.

In addition, the bill provides ASIC with a wide range of enforcement options which will enable ASIC to respond swiftly to emerging market situations. Supervision by ASIC will consolidate the current individual supervisory responsibilities into one entity, streamlining supervision and enforcement and providing unified supervision of trading on the market.

To enable the shadow Assistant Treasurer some time to get into the chamber for the next bill I might just take one or two more minutes to explain that this is a reform which is extremely important for the operation of Australia as a financial services hub. It is important, as other honourable members have commented, that the integrity of Australia’s financial markets not only be completely transparent but be seen to be completely transparent. The government took the view, correctly, that this is a role best played by a government instrumentality in the form of ASIC and that it was inappropriate for the Australian Securities Exchange to supervise itself. Should the government take the decision to introduce competition, it would be inappropriate for the ASX to supervise its competitors. Therefore, this is an appropriate bill which I commend to the House.

Bill read a second time.

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