Opening statement to the Senate Joint Committee, Corporations and Financial Services (Oversight of the Australian Securities and Investments Commission), 16 October 2015

  • Good morning, Chairman.
  • Thank you for this opportunity to address the Committee.
  • Representing ASIC today are all of our Commissioners –
    • Deputy Chairman Peter Kell; and
    • Commissioners:
    • Cathie Armour;
    • John Price; and
    • Greg Tanzer.
      • Supporting the Commission are Senior Executive Leaders:
        • Warren Day
        • Louise Macaulay;
        • Tim Mullaly; and
        • Michael Saadat.
  • Chairman, I have a brief opening statement in which I wanted to discuss two things:
    • ASIC's Corporate Plan, and
    • ASIC's Innovation Hub

Chairman, in late August, ASIC published its Corporate Plan 2015–16 to 2018–19 with our Focus for 2015-16. The Corporate Plan communicates our thoughts on how our long term strategic priorities and challenges are shaping ASIC's strategy and responses over this period. In achieving our strategic priorities of investor and consumer trust and confidence, and fair, orderly, transparent and efficient markets, we see a number of challenges that can threaten them. Our long term challenges are:

  • Conduct risk - balancing a free market-based system with investor and financial consumer protection,
  • Cyber resilience and digital disruption,
  • Structural change driven by the growth of superannuation,
  • Complexity driven by financial innovation, and
  • globalisation.

Our Corporate Plan identifies areas of focus for 2015-16 where there are particular concerns that flow from the long term challenges we face in 2015-16. These are in the areas of:

  • Conduct risk - gatekeeper conduct,
  • Cyber resilience and digital disruption - cyber attacks,
  • Structural change - the growth of superannuation and the need for trusted financial advice,
  • Complexity - misalignment of retail product design and distribution with consumer understanding, and
  • Globalisation - cross-border businesses, services and transactions.

The Corporate Plan also highlights how ASIC will evaluate its performance over time and strengthen its capabilities to meet future regulatory challenges.

Now I would like to talk about ASIC's Innovation Hub. In 2015, ASIC set up its Innovation Hub to help fintech start-ups in their engagement with ASIC. Innovators often have limited time, limited money and limited access to professional advice, and may also lack experience interacting with ASIC. Where we can, we work with the entity to help their business and cut red tape. ASIC is committed to encouraging innovation while not compromising our strategic priorities. We need to look closely at new business models to see where they fit in the regulatory framework. Innovative business models can sometimes test legal boundaries. The Innovation Hub helps us see new developments as they are happening and informs our work.  For our Innovation Hub, we have adopted a five point approach.

  • First: engaging with other fintech initiatives, including physical hubs and co-working spaces established for start-ups, for example, Stone & Chalk and Tyro in Sydney.
  • Second: streamlining our processes for innovative business models. Innovative businesses can request informal help from ASIC.
  • Third: a new page on ASIC's website – a one-stop-shop for innovative businesses to access information targeted at them.
  • Fourth: a senior internal taskforce at ASIC chaired by Commissioner John Price.
  • Fifth: our Digital Finance Advisory Committee, or DFAC for short, is a body of cross section of people involved with fintech business. They provide ASIC with strategic advice and information about the industry.

Chairman, I also wanted to mention very briefly our recent enforcement success. This month former Kleenmaid director, Gary Collyer Armstrong, was sentenced to 7 years jail for his role in the collapse of the national whitegoods distributor. In August 2015, Mr Armstrong pleaded guilty to insolvent trading and fraudulently obtaining $13 million from Westpac. This outcome should serve as a warning to corporate Australia that ASIC will not tolerate directors and company officers who conduct their business dishonestly to the detriment of creditors and consumers. If you choose to act in this way, there is a very good chance you will be caught and there is a very good chance you will go to jail. Chairman – since we last met some of ASIC lawyers in September won an award for their pro-bono volunteering work in helping young people. The award, from National Association for Prevention of Child Abuse and Neglect (NAPCAN), recognised the work of 38 ASIC lawyers.

Chairman, those are the substantive issues I wanted to mention. We are now happy to take questions.

Last updated: 30/03/2021 09:39