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More Funding for ASIC

August 7, 2018

 

 

What  impact will embedded supervision have on compliance? 

 

Earlier this week, this week the government expanded the powers of the Australian Securities and Investment Commission (ASIC) powers and this supported by $70.1 million. 

 

An official statement from the Treasury said that this will then the ASIC Chairman James Shipton to refocus the strategic position of the corporate regulator. 


The statement takes the time to itemise where all these funds will go. 


In light of this week’s focus on the fees for no service in superannuation, $9.4 million will be used to improve supervision over the superannuation industry. 


$ 8 million will be to implement greater supervisory over what the statement refers to as Australia’s five largest financial institutions.—that is the big four banks and AMP. This will be done by embedding staff into these organisation for greater supervision and improve compliance. 


“Having ASIC embedded in these financial institutions is also key, and it brings us into line with regulators overseas, and it's not lost on me that this is clearly something James did in his time when he was a regulator in Hong Kong, but it's also something that we have seen in the US and in the UK as well, and it's a very successful approach.” Minister Kelly O’Dwyer said, at the joint press conference earlier this week the.

 

ASIC chairman Shipton spoke to this ASIC being embedded in these major financial institutions:


"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. In answer also to the question about their engagement, they will be engaging 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."


$6.8 million will be for a thematic review into corporate governance and $6.6 million will go to the implementation of the government reforms concerning the whistleblower protection laws. 


$26.2 million to ‘increase the intensity of ASIC’s enforcement activities and give it the capability to tackle instances of misconduct in the financial services. 


This in addition to the funding boost that the government has already put into ASIC.


Will having staff embedded in an organisation really going to improve compliance? What impact will this have on risk and compliance professionals?
 

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