Simultaneously defensive and empowered: ASIC's response to the Capability Review

The sting of some of the sharper commentary in the ASIC Capability Review (such as the large gap between ASIC's perception of its own effectiveness versus that of its external stakeholders) will be eased by the Government's announcement of almost $130 million in additional funding and increased powers for the regulator.

This table sets out an overview of the key observations, recommendations and reactions to the Capability Review (including where the findings have led to increased funding and powers for ASIC).
With ASIC's somewhat defensive response to some of the recommendations (including those suggesting that its internal governance framework should be transformed), it will be interesting to observe the extent and form of the changes implemented at ASIC in the wake of the Capability Review. We understand that ASIC will refresh its Corporate Plan in light of the increased funding and, no doubt, some of the more pointed observations about the quality of its stakeholder communication strategy.

In addition to the funding injection, the Government also indicated that:

  • it has asked ASIC to work with the Financial Ombudsman Service on an immediate review of its jurisdiction (with a view to extending it to include a wider range of small business loans, as well as reviewing monetary limits and compensation caps);
  • it would provide $5.2 million in funding for the Superannuation Complaints Tribunal to help deal with legacy complaints and improve general processes;
  • a panel is to be established to review the financial system's external dispute resolution and complaints schemes and assess the merits of better integrating the schemes to improve complaints handling, resulting in the creation of a 'one-stop shop' to handle consumer complaints and disputes; and
  • it will introduce a user-pays industry funding model for ASIC commencing in the second half of 2017 (following consultation with industry to refine and settle the funding models).

The Government also announced that it would recommend a further 18 month extension to the appointment of the current ASIC Chairman, Greg Medcraft.

Given the continuity of leadership and the Government's endorsement of ASIC evident in its funding boost and expanded powers, it seems that ASIC is at complete liberty to determine exactly which of the Capability Review's 34 recommendations it will adopt.

Anna Simmons

I deeply understand my client's business so I can offer insight and innovative solutions to achieve outcomes that count.

Anna Simmons Senior Associate

Anna is a restructuring and insolvency lawyer specialising in insolvency advice, dispute resolution and financial regulation.

Anna's clients include banks and insolvency practitioners. She advises these clients on dispute resolution, regulatory compliance, enforcement strategies, receiverships, and liquidations.

Anna has extensive experience in advising on various aspects of debt recovery, insolvency and bankruptcy, creditors' remedies, general banking litigation, fraud disputes, misleading and deceptive conduct claims (including valuer negligence) and other forms of dispute resolution. She has worked on a large-scale remediation program, with a focus on regulator engagement.

Anna also presents and writes on insolvency, litigation and recovery matters.

As part of HDY's Pro Bono program, Anna volunteers at Redfern Legal Centre and MOSAIC, a specialist legal service that provides free legal advice to asylum seekers, refugees and newly arrived migrants. Anna is a member of HDYPride, the firm's LGBTIQ support network.

see my profile