Parliamentary Joint Committee on Corporations and Financial Services - Opening statement - 19 March 2021


Opening statement by ASIC Chair, James Shipton at the Parliamentary Joint Committee on Corporations and Financial Services, 19 March 2021, Parliament House, Canberra.

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Thank you Chair, and welcome to your new role on this important Committee.

First, let me assure you that ASIC has a very full agenda at the moment, including:

  • Continuing regulatory action and relief we have provided to support businesses through the pandemic;
  • Exploring actions we can take to support economic recovery;
  • Acting to protect consumers and investors against scams and other forms of inappropriate practice;
  • Implementing the remaining reforms flowing from the Royal Commission, particularly the commencement of the design and distribution obligation later this year;
  • Developing our approach to our new role as conduct regulator in superannuation; and
  • Addressing the real and growing threats posed by cyber-attacks.

As ever, we are focused on our enforcement activity, both in finalising the Royal Commission referrals and case studies as well as actions as part of our regulatory work.

To take superannuation alone, we currently have:

  • eight matters in litigation;
  • two briefs of evidence in support of criminal charges with the CDPP;
  • more than 20 enforcement investigations; and
  • multiple surveillances about potential super trustee misconduct.

None of these are Royal Commission matters.

However, before we get to your questions on our regulatory work, I must address the issues raised by the ANAO and subsequently examined by Dr Vivienne Thom in the review commissioned by the Treasury.

It is clear that both the Auditor General and Dr Thom identified some significant failures in ASIC’s processes and procedures in managing relocation expenses for both myself and the former Deputy Chair, Mr Daniel Crennan.

Significantly, following the issue of the ANAO’s letter to the Treasurer, the Commission took immediate action to rectify the problems and improve relevant policies, procedures and governance arrangements. I acknowledge the swift and good work done by my fellow Commissioners on this during my absence.

Steps we have taken, or which are underway, include:

  • Ensuring consistent reporting and monitoring of audit findings and actions through key governance committees, including the Audit Committee, our Executive Risk Committee and the Commission’s Risk Committee;
  • Establishing an Executive Integrity Committee, which has begun monthly meetings and includes oversight of ASIC’s obligation to notify the Australian Commission for Law Enforcement Integrity (ACLEI) of corruption issues involving our law enforcement activities;
  • Building a centralised incident and breach reporting register for ASIC’s key obligations that will be available for all staff to use;
  • Finalising our review of potential procurement breaches and developing a mitigation strategy to address identified issues and risks; as well as
  • Developing new policies relating to Commission expenses, including approval and sign off processes.  

I believe that, even before the review’s recommendations were published, ASIC had implemented, or was in the progress of implementing, a number of actions Dr Thom has suggested. We are now ensuring that the remaining items flowing from her recommendations are put in place.

We are in regular dialogue with Treasury on our progress in implementing the recommendations, with an expectation that they will be finalised by 31 March.

While I am happy to answer questions in relation to ASIC’s actions, I should emphasise that Dr Thom’s review was commissioned by Treasury and details of the report would best be addressed to that department.

In addition, we have recently adopted one of the recommendations of the 2015 Capability Review and designated Mr Warren Day, ASIC’s Chief Operating Officer (COO), to perform the functions of a head of office.

In this role, Mr Day will have responsibility for management of operational aspects of ASIC’s activities.

This will free up the Commission to focus on regulatory and enforcement decision making, key strategic issues, external relations and communication. 

This is a similar approach to that adopted by agencies such as the Australian Competition and Consumer Commission (ACCC) and creates a clearer set of accountabilities within ASIC.

Finally, I would like to acknowledge that despite the distraction caused by recent events, ASIC continued to do its important work and I acknowledge all of the efforts put in by my Commission colleagues and the entire ASIC staff during the last few months.

We are happy to take any questions. Thank you, Chair.

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