Keynote address: Regulatory perspective on conduct risk, culture and governance
A speech by Cathie Armour, Commissioner, Australian Securities and Investments Commission, Risk Australia Conference (Sydney, Australia), 18 August 2016
You may have been wondering why an ASIC Commissioner is speaking to you today, when the conference agenda is primarily focused on prudential regulatory initiatives. What does a market and conduct regulator like ASIC have to say about, for example, fundamental review of the trading book or the leverage ratio?
Taking a step back, ASIC does care about the outcomes of regulatory reform initiatives. Not just because many of the firms that are Australian Prudential Regulation Authority (APRA) stakeholders are also ASIC stakeholders.
ASIC is a market and conduct regulator. From this ‘lens’ – and the lens of financial services entities having a ‘social licence’ – we care about how the banks, sell-side entities and market infrastructure operators will serve their clients, both wholesale and retail. We care about how firms and market infrastructure operators will provide their services, including through their role in our capital markets. We care about whether the way these services are provided will continue to promote the fair and efficient functioning of our financial markets and economy. And, we care about facilitating change, innovation and new technology, if that would promote these objectives.
What I would like to talk to you about, in this keynote address, comes from this perspective. The themes I will touch on are:
- technology and regulatory technology (regtech)
- why governance, culture and conduct matters when firms are implementing major reforms, and
- what governance and culture means for your business.