Last week the federal government gave the corporate regulator control of Australia’s financial markets in the same year it has been hauled over the coals for its supposed lack of focus in relation to Australia’s advice industry.
It’s a broken record in the industry that many believe the regulator got it wrong on a number of issues with its supervision and licensing of Australia’s financial services industry.
It’s been almost five years since the collapse of property group Westpoint and investors are still waiting for compensation. A number of dealer groups have also been left to ponder their fate as they await the outcome of lengthy legal action with ASIC.
There are also documented cases where the regulator seemingly turned a blind eye. Take the issue of one mid-size Townsville advice firm, Storm Financial.
Despite ASIC taking action against the firm in December last year, industry murmurs suggest it knew of complaints against Storm in October 2008, two months prior to its collapse.
Many have spent the past eight months waiting for action. It seems it took the intervention of one of the country’s largest banks, Commonwealth Bank of Australia, for ASIC to notice.
The collapse of agribusiness firms Great Southern and Timbercorp has also marred the regulator in the eyes of the industry. Suggestions Great Southern did not have enough professional indemnity insurance have seemed to go unnoticed.
The role of the regulator also came under fire this year at a parliamentary level, with inquiries into the collapse of Storm and Great Southern and Timbercorp.
At a number of parliamentary inquiry public hearings, ASIC chairman Tony D’Aloisio proclaimed the regulator was in a fit state following its 2007 review.
In a statement from ASIC last week, D’Aloisio continued down this company line.
“I have assured the Government that ASIC can take on these important responsibilities. Following our strategic review in 2007, ASIC is now closer to the market, more accessible, flexible, and able to take emerging trends into account more quickly,” he said.
“We have built up our market skills with a number of senior recruitments with market experience. We will be working closely with ASX to ensure a smooth transition of market surveillance and participant supervision responsibilities to ASIC.
“In addition, this will allow for a whole-of-market approach to market surveillance and participant supervision should the government issue licences for new trading market operators.”
I would not be alone in thinking D’Aloisio has chosen his words carefully, though the mere mention of supervision will surely leave some industry participants cringing.
What are your thoughts about ASIC taking over Australia’s financial markets?
