ASIC's governance and accountability
- ASIC’s governance and accountability framework
- Commission and Accountable Authority
- Commission Committees
- Specialist Sub-Committees
- Governance Committees
- Management Committees
- Executive Directors
- ASIC’s accountability
ASIC’s governance and accountability framework (the Framework) sets out a clear, transparent and common understanding of ASIC’s governance and accountability structures and processes. The objective of the Framework is to promote effective, efficient and impartial decision making at ASIC and articulate clear accountabilities. The Framework seeks to ensure ASIC acts strategically, with integrity and effectively delivers on its statutory objectives.
The Framework sets out how the Commission will collectively exercise its functions and powers, as well as delegate to others. It helps ASIC to achieve its strategic priorities, manage risks and use resources responsibly.
ASIC is a body corporate established under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). ASIC is made up of Commissioners who are appointed by the Governor General on nomination of the Minister.
Under the ASIC Act, Parliament has conferred functions and powers on the Commission and Chair of ASIC. ASIC’s functions and powers are also drawn from the laws we administer.
ASIC’s governance and accountability structures are consistent with ASIC being an independent Commonwealth agency that is a statutory body corporate and reflects the legislative framework within which ASIC operates. The Framework separately identifies decision-making in relation to governance matters and regulatory functions. It supports the Commission to exercise its functions and powers and oversee delegated matters.
The current Framework was introduced in December 2019 as part of ASIC’s strategic change program and to reflect ASIC’s revised leadership structure.
A key purpose of the governance framework is to enable the Commission to spend more time focusing on and setting ASIC’s strategy.
The Commission is ASIC’s governing body and is responsible for achieving ASIC’s statutory objectives set out in the ASIC Act. It makes strategic and/or significant regulatory decisions, sets ASIC’s strategy and oversees ASIC’s delivery and performance against the strategy. In addition, the Chair is responsible for the duties of the Accountable Authority contained in the Public Governance Performance and Accountability Act 2013 (PGPA Act) which forms part of the executive responsibilities of governing ASIC.
The following table outlines the dual regulatory and governance roles of the Commission:
|Regulatory role||Governance role (shared between the Accountable Authority and Commission)|
|Making strategic and/or significant regulatory decisions related to ASIC’s statutory powers and functions.||Providing strategic leadership by setting ASIC’s vision, risk appetite and corporate plan, determining budget and resourcing priorities, ASIC’s Values and Code of Conduct and overseeing management performance and accountability and audit processes|
ASIC’s governance structure
ASIC’s governance structure supports the Commission in exercising its functions and powers by providing oversight of delegated matters and a structure for executives to elevate matters to the appropriate forum.
The Commission has established a number of committees to assist it with the effective and efficient performance of its dual regulatory and governance roles. The Commission undertakes these roles through Commission meetings, Commission Committees, Specialist Sub-Committees, Governance Committees and Management Committees.
ASIC may establish other sub-committees and boards from time to time.
Commission meetings are convened by ASIC’s Chair under Section 103 of the ASIC Act. They generally take place twice a month although they may be convened more regularly as required. The Commission also meets as a team on a weekly basis.
The Commission is responsible for the exercise of ASIC’s functions and powers. It undertakes the following actions through Commission meetings:
- makes decisions on matters within ASIC’s regulatory functions and powers that are strategic and/or significant
- sets priorities for allocation of budget, and monitors performance against allocated budget
- approves team business plans
- supports the Accountable Authority in overseeing the management and operations of ASIC as a Commonwealth agency
- reviews ASIC’s annual report, external performance assessment and organisational performance measures
- approves internal policies that set rules, guidelines and governing principles for:
- regulatory decisions that are delegated to management
- managing internal risk and compliance
- setting ASIC’s culture
- establishes the framework within which external representation and communication occurs, and determines messaging and presentation for strategic matters
- approves delegations from the Commission.
Commission Committees are decision-making committees and comprise the full Commission and other standing attendees. There are three Commission Committees:
While matters and decisions reserved for the Commission may be dealt with in formal Commission meetings, the Commission generally makes decisions in relation to strategic and/or significant enforcement, regulatory and risk matters within the relevant Commission Committee (except for formal statutory decisions which are only made in a formal Commission meeting). The Commission has established the Commission Committees so that it can dedicate time to, and provide specific focus on, these important areas of ASIC’s statutory mandate.
The Commission Enforcement Committee makes strategic and/or significant enforcement decisions (including in relation to conduct, strategy and focus of major matters and enforcement policies) and oversees ASIC’s enforcement and litigation work.
The Commission Regulatory Committee makes strategic and/or significant decisions relating to regulatory policy, law reform, applications for relief, policy frameworks and reports and oversees ASIC’s regulatory activities and functions.
The Commission Risk Committee considers all types of risk of a strategic and/or significant nature that affect ASIC, its regulated population, Australia’s financial system and Australian consumers. It is responsible for setting and monitoring ASIC's risk management framework and risk appetite. The Committee monitors ASIC risk by reviewing and challenging whether material risks have been identified, ensuring risk remediation plans are in place and challenging whether adequate resources have been deployed to appropriately manage risks.
Specialist sub-committees support the Commission Committees and provide oversight and guidance in preparing matters for decision by Commission. The sub-committees consist of two or three Commissioners and standing attendees. There are four sub-committees:
- Enforcement Oversight Committee
- Emerging Threats and Harms Committee
- Regulatory Policy Committee
- Regulatory Issues Committee
The specialist sub-committees also provide guidance to Executive Directors, Senior Executive Leaders and their teams on matters that do not meet the criteria to be escalated to the Commission for decision.
The Enforcement Oversight Committee assists the Commission with implementation of the Office of Enforcement and the efficient and effective execution of ASIC’s Enforcement strategy.
The Emerging Threats and Harm Committee identifies, considers and provides advice on the management of emerging risks and strategic risks within ASIC’s regulated population or areas it regulates.
The Regulatory Policy Committee considers submissions recommending new or revised regulatory policy, law reform and novel applications for relief from the laws administered by ASIC.
The Regulatory Issues Committee considers matters generated by the surveillance and supervisory work undertaken by ASIC’s regulatory teams (e.g. Financial Services, Markets, Wealth Management and Close and Continuous Monitoring teams).
Governance Committees assist the Commission and the Accountable Authority in undertaking their governance roles. There are two Governance Committees:
The Audit and Risk Committee operates independently of management and plays a key role in assisting the Chair to discharge their responsibilities for the efficient, effective, economical and ethical use of Commonwealth resources. This committee also provides independent assurance to the Chair and the Commission on ASIC’s financial and performance reporting, risk oversight and management, and systems of internal control.
The Management Committees are executive level committees that are responsible for undertaking and overseeing the day-to-day management of ASIC. There are two Management Committees:
The Executive Committee is responsible for the day-to-day operation and management of ASIC. It reports to the Accountable Authority and the Commission. This committee is responsible for implementing and delivering ASIC’s strategies, policies, plans and priorities and leading the implementation of ASIC’s business plans.
The Executive Risk Committee is responsible for identifying and monitoring significant risks to ASIC, maintaining ASIC’s risk management frameworks and policies, managing risks in line with those frameworks and policies, and implementing and overseeing audit/assurance processes and risk mitigation strategies. It reports to the Accountable Authority and the Commission Risk Committee.
Executive Directors play a key role within ASIC’s committee structure. They are standing attendees of the various Specialist Sub-Committees of the Commission. They are also members of the Executive Committee and Executive Risk Committee. More information about the responsibilities of Executive Directors is outlined in ASIC’s Management Accountability Regime (AMAR).
ASIC is subject to a robust framework of public accountability and transparency. ASIC is accountable to the Parliament and many of its decisions are subject to administrative or judicial review. Ultimately ASIC is accountable to the Australian public for its actions through publications of its Annual Report and other public documents and releases.
ASIC’s Management Accountability Regime (AMAR) clearly identifies the accountabilities of ASIC’s Chair, Commission members and Executive Directors.
As an independent statutory agency, ASIC is not subject to a legislative accountability regime but has taken the opportunity to apply key features of the Banking Executive Accountability Regime (set out in Part IIAA of the Banking Act 1959) to its senior staff.
ASIC’s performance, and the exercise of its powers and functions, are subject to a range of public accountability measures.
ASIC is established under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). It is made up of its Commissioners who are appointed by the Governor General on nomination of the Minister. Under the ASIC Act, Parliament has conferred functions and powers on the Commission and Chair of ASIC.
ASIC is accountable to the Australian Parliament through the:
- Parliamentary Joint Committee on Corporations and Financial Services
- Senate Standing Committee on Economics
- House of Representatives Economics Committee.
The Parliamentary Joint Committee on Corporations and Financial Services is established under the ASIC Act. Its duties include inquiring into and reporting to the House of Representatives and the Senate on ASIC’s activities, the operation of the corporations legislation and any question connected with the Committee’s duties referred to it by either House.
ASIC and the Accountable Authority are subject to a range of accountability measures for financial, regulatory and performance activity. ASIC or the Accountable Authority are required to prepare the following:
- ASIC’s Corporate Plan covering its purpose, environment, performance, capability, and risk oversight and management
- Annual Portfolio Budget Statements that inform the Senate and Parliament of ASIC’s proposed resource allocation
- ASIC's Annual Reports, which are tabled in Parliament
- periodic audits conducted by the Australian National Audit Office
- self-assessments of performance against the six outcomes-based performance indicators in the Government’s Regulator Performance Framework (published October 2014).
In addition to oversight by Parliament and the relevant Minister, ASIC’s decisions can be subject to review by the:
- Administrative Appeals Tribunal
- Commonwealth Ombudsman
- Office of Australian Information Commissioner
- Privacy Commissioner.
Read more about ASIC’s accountability and reporting.
While most powers vest in the Commission, some statutory powers only vest in the Chair.
Examples of powers and duties of the Chair include:
- engaging staff, and certain obligations under the Public Interest Disclosure Act 2013 (PID Act)
- determining the ASIC Code of Conduct and the ASIC Values under the ASIC Act
- establishing and maintaining an appropriate system of risk oversight and management and an appropriate system of internal control.
In addition, the PGPA Act and Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) impose several executive responsibilities on the Chair as the Accountability Authority of ASIC. The PGPA Act requires the Accountable Authority to govern ASIC in a way that promotes:
- the proper use and management of public resources
- the achievement of the purposes of ASIC
- the financial sustainability of ASIC.
The PGPA Act confers responsibilities on the Accountable Authority for matters including:
- the establishment and maintenance of an appropriate system of risk oversight and management and an appropriate system of internal control
- the financial management of ASIC
- compliance with reporting requirements.
Commissioners have personal statutory obligations under the PGPA Act. Section 25 of the PGPA Act requires each Commissioner to perform their functions and exercise their duties with the degree of care and diligence that a reasonable person would in the same circumstances.
They are accountable to the Minister regarding disclosure of personal interests under the ASIC Act. Commissioners also have obligations under the ASIC Code of Conduct.
Executive Directors have the delegated responsibility for the day-to-day management of ASIC. They deliver the strategy set by the Commission. Executive Directors lead, manage and guide the teams within their area of responsibility.
Executive Directors are accountable to the Accountable Authority and the Commission. Executive Directors also have obligations under the ASIC Code of Conduct.
ASIC’s Values and Code of Conduct (the Code) guide and inform the expected behaviour of ASIC employees. ASIC’s Values of Accountability, Professionalism and Teamwork underpin the way that all ASIC employees are expected to work, make decisions and interact with others. Adherence to ASIC’s Values, compliance with the Code and the expectations set out in ASIC’s Management Accountability Regime (AMAR) individual accountability statements are assessed before performance bonuses are determined.
ASIC’s Management Accountability Regime (AMAR) applies to the accountable persons of ASIC. Under the AMAR, an accountable person is an individual who has senior executive responsibility for management or control of ASIC, or a significant part of the operations of ASIC.
The accountability statements for each accountable person provides:
- a transparent and common understanding within ASIC of where accountability lies for any particular aspect of ASIC’s operations and who each accountable person is accountable to
- a clear, transparent and common understanding within ASIC of how a given individual meets their obligations as the accountable person, including for example by making decisions, serving as a point of review or challenge, or escalating as appropriate
- for those accountable persons consequences of failure to meet their obligations, whether by inappropriate action or failure to act, within their area of accountability.
ASIC’s accountable persons are:
- the Chair (acting as the Chair and the Accountable Authority, as well as a member of the Commission) and each Commissioner
- each Executive Director and other key staff.
The AMAR will evolve as ASIC reviews and changes its processes and procedures.
Accountable persons are required under AMAR to take reasonable steps to discharge their accountability obligations and attest annually that they have done so.