The leadership of the Australian Securities and Investments Commission (ASIC) has appeared before a federal parliamentary joint committee (PJC), singling out the compliance reporting activities of financial services licensees as an area of serious concern.
Expanding on a question about non-reporting of compliance problems by Macquarie Private Wealth, ASIC commissioner Peter Kell told the PJC that a cultural change was required within dealer groups.
“We are very concerned with the inconsistencies between the ways licensees in the industry report problems and breaches,” he said. “We are calling on them to err on the side of caution and bring matters to our attention earlier rather than later.
“We re-iterate that self-reporting, particularly early in the process, will be taken into account should misconduct be found.”
Mr Kell said that the lack of priority placed on reporting non-compliance issues to ASIC was a longstanding problem within the culture of some dealer groups, but that the regulator was starting to witness a changing culture within some problem groups.
“ASIC’s system relies on self-execution, and it really annoys me that there is a lack of self-reporting going on,” said ASIC chairman Greg Medcraft.
“While the lack of reporting is not quite systemic, we are detecting a wide span of behaviour.”
Mr Medcraft issued a clear warning to licensees that are not self-reporting: “We are very focused on risk-based surveillance,” he said. “If you are not self-reporting, you may well receive a visit from us.”
Macquarie Private Wealth was singled out as a licensee that needs to reform its licensing procedures, with Commissioner Kell claiming that “Macquarie now needs to re-think the way it monitors its authorised representatives.”
The commissioners also re-iterated their commitment to keeping whistle-blowers confidential to the best of their ability. “We encourage whistle-blowing – it has led to some of our best successes – and we want to ensure that whistle-blowers are protected,” he said.
The committee was chaired by Labor MP for Robertson Deborah O’Neill, and made up of Queensland LNP Senator Sue Boyce, NSW Labor Senator Matt Thistlethwaite and Liberal MP for Bradfield Paul Fletcher.
