Parliamentary Joint Committee – Corporations and Financial Services, ASIC Chair James Shipton, Opening Statement, 19 November 2019

Opening statement by James Shipton, Chair, Australian Securities and Investments Commission, Parliamentary Joint Committee – Corporations and Financial Services, 19 November 2019.


Good morning Chair.

In the interests of time, I want to dive straight into some updates on particular areas in the expectation that your questions may touch on the other important areas of our work.

As a strategic starting point, we recognise we need to utilise the full suite of our regulatory tools to achieve our goals. Therefore, we are very deliberately taking a multi-dimensional and multi-disciplinary approach to our job.

Enforcement work involving major financial institutions and Royal Commission matters

One fundamentally important dimension of this approach is our enforcement work.

Prioritising cases with a high deterrence value and where there has been egregious harm impacting vulnerable customers is a strategic priority.

We are also pursuing cases where we can utilise our new powers and penalties granted by Parliament.

Our enforcement efforts are focused on both corporate and individual accountability.

We are prioritising our continuing investigations involving major financial institutions and matters arising from the Royal Commission.

 As such, since February 2018:

  • there has been a 24% increase in the number of ASIC enforcement investigations, and
  • a 134% increase in enforcement investigations involving the big six (or their officers or subsidiary companies).

We have also progressed a number of matters through the courts. I will briefly touch on some of these and Deputy Chair Daniel Crennan QC can elaborate further in our discussions.

  • A number of entities have admitted liability allowing us to go straight to court to determine penalties. For example:
    • MLC Nominees and NULIS, two entities in NAB’s wealth management division, admitted to breaches of the law. This is a significant outcome regarding fees for no service failures.
    • Admissions have also been made by NAB regarding their loan Introducer Program.
  • We have utilised the courts to clarify important points of law: The appeal decision in the Westpac Securities Administration Limited and BT Funds financial advice case provides important clarity and certainty to the complex topic of general and personal advice.
  • ASIC has also commenced action in the Federal Court in several high-profile Royal Commission matters, including involving Select AFSL and its director.
  • We have also taken action in regard to unfair contract terms against Bendigo & Adelaide Bank and Bank of Queensland and have laid criminal charges against CommInsure for alleged hawking.
  • And we are awaiting judgment in our court action against Dover Financial, AMP Financial Planning and Westpac (regarding a former financial planner).
  • On our Financial Services Enforcement work more broadly, we have recently recorded significant criminal outcomes (i.e. imprisonment) relating to particularly egregious matters, including against former financial advisers.

Performance measurement update

Turning now to our performance measurement and how we are going to assess our effectiveness.

As I stated last time, we take our accountability to the Parliament very seriously.

As an ongoing commitment to transparency, we publish a number of regular reports about our priorities, and about results and outcomes achieved.

We plan to expand on our reporting beyond the existing publications.  In particular to produce a periodic consolidated ASIC update which will likely replace our current Royal Commission Update and our 6-monthy enforcement updates.

  • We intend to publish the first of these periodic updates in early 2020. This will allow us to report on a number of matters that we undertook to complete by the end of this year.

We will also soon be subject to oversight by the proposed Financial Regulator Oversight Authority (FROA). 

New accountability and governance framework

As part of our internal enhancements, we have recently adopted a new accountability and governance framework that is designed to emphasise (and oversee) the implementation of ASIC team business plans.

Our updated governance framework and new internal committee structure will better manage strategic decisions and provide oversight on the delivery of ASIC’s work.

Responsible lending

Finally, as you know, we will be releasing updated guidance on the responsible lending obligations (RG 209) by the end of this year.

This is all about providing clarity to lenders and borrowers alike and building on existing guidance to narrow points of uncertainty, clarify small business lending and restate the basic obligations and purpose of the law. 

  • A law that requires lenders to assess whether applicable consumer loans are ‘not unsuitable’ by specifically requiring them to conduct: (i) reasonable inquiries and (ii) verification. These are the statutory building blocks that we are obliged to work with.


In closing, I want to emphasise:

  • ASIC’s continued focus on enforcement and deterrence as a fundamental part of our multi-dimensional approach to regulation
  • our continued internal strategic enhancements
  • our focus on clarification of legal requirements (such as our forthcoming update on the responsible lending obligations), and
  • our pursuit of new frontiers of regulation, including:
    • our recently published joint report with the Dutch regulator which explains the inherent limitations of consumer disclosures, and
    • the advancement of our Regtech initiatives.

Thank you, and we look forward to taking your questions.

Last updated: 19/11/2019 12:00