Wednesday, 28 March 2018
Treasury Laws Amendment (ASIC Governance) Bill 2018; Second Reading
That this bill be now read a second time.
Today I introduce a bill that bolsters the effectiveness of the Australian Securities and Investments Commission (ASIC).
ASIC is Australia's integrated corporate, markets, financial services and consumer credit regulator. ASIC is an independent Commonwealth government body set up under the Australian Securities and Investments Commission Act 2001 (ASIC Act).
In support of the government's ongoing commitment to combatting misconduct in the financial services sector and boosting consumer confidence, the government is strengthening ASIC. We are doing so by implementing recommendations from the Financial System Inquiry and the ASIC capability review, that will provide new tools and powers to ASIC, as well as making it more accountable.
We have provided ASIC with a stronger funding base through the introduction of the industry funding model. This will ensure that the costs of regulation are borne by those that have created the need for it, rather than the Australian public who too often bear the costs of financial sector misconduct.
In December 2017, the government released draft legislation to give ASIC the power to intervene in the sale and distribution of financial products, where there is a significant risk of consumer detriment.
In February 2018, the parliament passed legislation giving ASIC new directions powers to strengthen its oversight of the new one-stop-shop dispute resolution body, the Australian Financial Complaints Authority.
Soon, ASIC will also be responsible for the management of expected additional disclosures following reforms to whistleblowing laws.
Along with the new powers, ASIC also has new responsibilities. For example, it will soon be responsible for administering the new Asia Region Funds Passport regime, including the regulation of a new collective investment vehicle that will be available under the passport framework, the Corporate Collective Investment Vehicle.
To fulfil its role, ASIC needs to operate as effectively and efficiently as possible, and for that it needs strong leadership and internal governance. Given the breadth of ASIC's responsibilities, it's also crucial that ASIC's leadership has the right mix of skills, knowledge and experience.
ASIC is led by a commission consisting of between three and eight members. At present, one member must be appointed chairperson, and another member may be appointed deputy chairperson.
This bill amends the ASIC Act to allow ASIC to have two deputy chairpersons.
This is entirely appropriate. Having two deputies will assist ASIC in operating as an effective and efficient regulator by improving oversight of ASIC by its leadership. It will also provide greater flexibility for the commission to determine how it undertakes its functions.
It reflects the greater scope of ASIC's responsibilities and ensures that the commission has the necessary depth of knowledge, skills and experience in its leadership team.
Finally, taking this important step will also support ASIC in engaging more closely with its stakeholders and better communicating its role, priorities and resource allocations. This is an essential part of ASIC now being funded by industry.
Full details of the measure are contained in the explanatory memorandum.