Parliamentary Joint Committee on Corporations and Financial Services: Opening Statement - ASIC Chair James Shipton, 17 August 2018


Opening statement by James Shipton, Chair, Australian Securities and Investments Commission, Parliamentary Joint Committee on Corporations and Financial Services, 17 August 2018


Good morning Chair and committee members.

ASIC is pleased to appear before the Committee today. 

I would like to start by introducing our new second Deputy Chair, Daniel Crennan QC, who joined ASIC last month.

Also appearing today are commissioners:

  • Cathie Armour, and
  • John Price

The following ASIC Senior Executive Leaders are appearing:

  • Warren Day
  • Greg Kirk
  • Louise Macaulay
  • David McGuinness; and
  • Michael Saadat.

In addition, ASIC Senior Manager, Alex Purvis is also attending.

Chair, our other Deputy Chair, Peter Kell, cannot be here today as he is appearing as a witness at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

I expect the Committee to have questions about issues raised at the Royal Commission hearings, including matters derived from ASIC's own work and investigations.

I want to highlight that the Royal Commission is yet to make findings or recommendations.  Accordingly, I am mindful that ASIC should not comment or speculate on what the Royal Commission might either find or recommend.

Moreover, ASIC has many ongoing investigations related to issues covered by the Royal Commission and there are limits to what we can publicly disclose about them today.

We will however be able to speak about resolved outcomes that ASIC has already announced that may have also been the subject of Royal Commission hearings.

Chair, ASIC works within a defined legislative framework set by Parliament and we use every regulatory tool available to us within that framework - whether that is litigation, bans, licensing actions, infringement notices, court enforceable undertakings, guidance notes, reports, interventions and so on. 

This includes criminal actions where appropriate and ASIC is currently in active liaison with the Commonwealth Director of Public Prosecutions in relation to 134 cases, on a broad range of matters.

For context, I request your permission to table recent information on ASIC’s total enforcement outcomes.

Chair, this document shows ASIC has a strong enforcement record and shows our utilisation of important enforcement  tools.

To this end, since 2011, we have:

  • obtained 160 criminal convictions - 22 in the last financial year.
  • completed 140 civil penalty proceedings - 30 in the last financial year
  • banned more than 840 people from providing financial services or credit
  • banned more than 400 people from being directors
  • recovered more than $1.8 billion in compensation for consumers, and $350 million in the last financial year.

Chair, I would like to acknowledge the Government’s $70.1 million  funding package for ASIC announced last week that will allow us to accelerate and expand our enforcement and supervisory work.

This funding will strengthen our efforts to realise our vision for a fair, strong and efficient financial system for all Australians.

It will enhance ASIC’s capacity to change behaviours to drive good consumer and investor outcomes.

It will also enable us to boost our responses against misconduct, and better promote the strong and innovative development of the financial system.

Critically, and in particular, this will allow ASIC to increase the intensity of our enforcement activities in new areas and implement new supervisory approaches in relation to Australia’s big four banks and AMP.

For the first time, ASIC will embed dedicated supervisory staff within these institutions to monitor their governance and compliance with laws.  

Other important measures that will be enabled by the additional funding include:

  • an enhanced supervisory approach for superannuation
  • the creation of a corporate governance taskforce that will, amongst other things, look at the overall effectiveness of corporate governance standards
  • reviewing the effects of conflicts of interest that remain in the financial advice industry, and
  • promoting the adoption of regulatory technology by Australian financial firms.

My colleagues at ASIC are working hard to put our plans into action as quickly as possible in the coming weeks and months. And I look forward to updating the Committee on these initiatives at future hearings.

Thank you Chair. We look forward to responding to your questions.

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