Late last year the Australian Securities and Investments Commission (ASIC), with the support of the Finance Industry Council of Australia (FICA), commissioned Chant Link & Associates to conduct a preliminary study on the cost impact of the regulatory framework ASIC administers. The study is one of ASIC’s Better Regulation initiatives.
Chant Link’s report is now available on ASIC’s web page. It presents the findings from interviews conducted by Chant Link & Associates with 64 financial sector organisations in November and December 2007.
The key findings of the study are:
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respondents have a positive attitude towards the notion of regulatory oversight, seeing benefits accruing both to their own organisation and to the market in general;
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the main concerns about regulatory control are:
- poor implementation of some legislation
- some regulation is seen to be unnecessary, and
- the volume of regulatory requirements is difficult to manage
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compliance costs are generally accepted and most regard them as not only inevitable but also integral to maintaining consumer confidence and enhancing business regulation within the financial sector – many said they could justify some of the costs on commercial grounds, regardless of regulation;
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although compliance costs are perceived to be high, most readily admitted to not having a complete picture of how much their ongoing compliance activities are costing them overall and many perceived little value in doing so given that the systems to track compliance costs comprehensively would be expensive and would not be able to be used for business purposes, only a few were able to give estimates; and
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most believe their compliance costs would be reduced overall if the quality of the regulatory process were to be improved.
ASIC will use the findings of the study to engage in further dialogue with industry on the impact of its regulation on business and to inform our thinking as part of our current strategic review. In particular, suggestions made by respondents about what we could do to reduce unnecessary regulation and improve our interactions with regulated businesses more generally will be reviewed. Some of these issues are already on our radar.
We thank the people and organisations that took the time to contribute to this preliminary study on costs and we look forward to working with business on important cost issues that matter to them.
This is a separate initiative to the broad stakeholder survey ASIC is conducting as part of its strategic review.
Editor's note:
This release was originally numbered IR 08/08.