Senior members of ASIC and the Australian Prudential Regulation Authority (APRA) have indicated they are aware of the high stress levels facing the financial services sector in light of significant regulatory change to the country’s financial advice and superannuation systems.
ASIC commissioner Peter Kell and APRA deputy chair Ross Jones told delegates at the 2012 Financial Services Council (FSC) conference on the Gold Coast that the bodies were aware of the reform stress being felt by the sectors.
“We are certainly aware that you want to see, say in relation to FOFA (Future of Financial Advice), the guidance ASIC is producing, and we are working very hard on getting that out as soon as possible,” Kell said yesterday.
“I would emphasise that prior to that guidance hitting the desk, we are engaging with participants right across the industry on a very regular basis, literally on a daily basis, big and small, to run through some of the issues that people anticipate people may face when FOFA comes in.”
He said the discussions ASIC representatives were having with industry stakeholders centred on the business models they intended to have, the best interest duty and conflicted remuneration.
“We’re just as keen as you are to see the consultation on that guidance out in the marketplace as much as possible,” he said.
In regard to the Australian superannuation system changes, Ross said APRA was not only aware of industry unease due to the regulatory changes, but the prudential regulator was also feeling the strain.
“We are aware of the stress; there is also stress internally in APRA in terms of trying to meet the various deadlines. The deadlines are tight,” he said.
“We engage in as much discussion as we can. We have gone out there with consultation papers, particularly with regard to MySuper and with regard to superannuation standards. We’ll have the final superannuation standards out within a few months. We appreciate the contact we’ve had with industry.
“With regard to MySuper, the consultation in regard to the discussion process has ended and we hope to finalise that fairly soon. I would accept that, of course, in the absence of the legislation being passed at this stage some of these themes are still open for discussion.”
Kell and Ross’s comments were made just an hour or so after FSC chairman Peter Maher addressed industry concerns regarding the tight timelines for both FOFA and the government’s Stronger Super regime.
“Our focus now is working with ASIC and Treasury to make sure the regulations and guidance deliver a regime that meets the twin objectives of making advice more accessible and more affordable,” Maher, who is also Macquarie Bank Group head of banking and financial services, said.
“However, the longer it takes for the full release of regulations and guidance, the greater our concern about the ability of the industry to comply with FOFA and Stronger Super by 1 July 2013.”
He said two weeks ago, ASIC declared its intention to consult by the end of 2012 on a range of issues, including guidance on disclosure issues, MySuper, self-managed superannuation fund reforms and possibly also governance reforms and SuperStream changes, depending on the final passage of legislation.
“The delay in release of regulations and guidance in some areas until 2015 limits the ability of our industry to comply,” he said.
However, despite voicing frustration over time frames, he said the industry also needed to remain focused on its good work.
“As an industry we need to put as much of the regulatory change behind us as possible and get on with that we do best,” he said.
