Parliamentary Joint Committee – Corporations and Financial Services, ASIC Chair James Shipton, Opening Statement, 28 February 2020

Opening statement by James Shipton, Chair, Australian Securities and Investments Commission, Parliamentary Joint Committee – Corporations and Financial Services, 28 February 2020.


Good morning Chair.

I would like to begin by reporting on:

  • ASIC’s ongoing work,
  • our renewed governance and accountability framework,
  • the strengthening of our risk management,
  • enhancements to our workforce capabilities, and
  • our response to pandemic events.

ASIC Update

This week we published an Update setting out ASIC’s work in the six-month period from September 2019 to February 2020. This includes our response to the referrals and recommendations of the Royal Commission. Chair, with permission, I would like to table this Update.

Across ASIC, our focus on improving the way we regulate remains unwavering.

Whether we are addressing emerging issues—for example, our coordinated response to the recent bushfire crisis, or implementing the Royal Commission recommendations, we are committed to achieving and exceeding expectations.

ASIC has assisted the development and implementation of an unprecedented wave of legislative reform – providing input and advice to help shape these important changes to Australia’s regulatory framework and financial system.

We continue to implement and use our new regulatory powers to identify and address misconduct and poor consumer outcomes.

ASIC also remains focused on further advancing our supervisory work to improve the practices of the financial services sector, promote enduring cultural and behavioural change, and root out problems before they cause significant harm.

ASIC’s governance and accountability

Accountability and decision-making processes matter. This is something we remind our regulated population of, and hold them account for. Therefore, we too must be accountable and lead by example.

Given the important oversight responsibilities of this Committee, I would like to briefly highlight the work we have been doing to improve our own operations through our comprehensive strategic change program. Particularly, the strengthening of our governance and accountability processes.

These changes reflect the importance ASIC places on transparency, regulatory integrity and effective oversight and management of our functions and responsibilities.

We have reconfigured our decision-making and governance structures.

And, in December 2019, we implemented the Royal Commission’s recommendation to apply the Banking Executive Accountability Regime (BEAR) to regulators. We introduced a fit-for-purpose accountability regime that applies key features of the BEAR regime to our Commissioners and senior executives.

Chair, with permission, I would like to table documents summarising ASIC’s renewed governance and accountability framework. I also table two additional documents in relation to ASIC’s Management Accountability Regime, including individual accountability statements for Commissioners and senior executives.

Strengthening ASIC’s risk management

Another key outcome of ASIC’s new governance framework is its ability to better identify and manage risk across the agency.

We are implementing a new risk governance structure designed to create a strong platform to manage all types of risk of a significant nature that affect ASIC, its regulated population, Australia’s financial system, and Australian financial consumers and financial investors.

Following on from this, ASIC is in the process of appointing its first Chief Risk Officer.

Enhancements to ASIC’s workforce capabilities

With the benefit of additional funding, we have enhanced our legal, investigative, and surveillance capabilities.

We know every single cent of this funding is either levied or public funds. Accordingly, we always look to apply these funds as efficiently as possible to support our regulatory activities.

I will also report that we are accelerating our data analytics capability and have appointed a new Chief Data & Analytics Officer to this end. This will increase our capabilities to better understand industry conduct and consumer outcomes through a more robust data analytical framework.

Pandemic events

Chair, ASIC also has processes in place to deal with specific risks - for example, monitoring and planning for potential consequences of pandemic events.

We have an internal pandemic response plan in place in relation to the Coronavirus.

In accordance with our practice in these types of scenarios, ASIC has contacted significant market participants to ascertain what business continuity arrangements they have in place. ASIC is also monitoring the continuous disclosure of listed entities as a result of changing market sensitivities and volatility.

Importantly, we are working closely with fellow regulators, both domestically and overseas to monitor the situation.


Before I close, I want to reinforce the enormity of the task ahead, and the change required to rectify the underlying issues in Australia’s financial system.

To give an indication of the size of the problem:

  • There was a 100% increase in breach notifications immediately following the Royal Commission and in the next year there was a 55% increase in breach notifications, received by ASIC; and
  • In the Australian Financial Complaints Authority’s (AFCA) first year of operation, there was a 40% increase in complaints to AFCA compared to predecessors.

ASIC is acting and we expect our industry to act with equal purpose.

It is clear to me, corporate Australia did not invest in the systems, processes and management of non-financial risk to the same extent that the rest of the world did last decade. Indeed, the Royal Commission exposed this underinvestment.

So, there is a period of significant catch up.

ASIC will continue its focus on our important regulatory work, while also working on our own internal processes to ensure we are creating a fair, strong and efficient financial system for all Australians.

My fellow Commissioners and senior colleagues and I would be happy to take your questions.

Last updated: 28/02/2020 12:00