The Governance Institute has voiced its concern over the federal government’s decision not to provide ASIC with a three-year funding model, arguing that the regulator needs stability and certainty.
Governance Institute has supported the government’s overall response to the Financial Services Inquiry (FSI), but said waiting for the ASIC Capability Review report to nominate funding to ASIC will not achieve the best outcome.
“Economic cycles and government revenue swings mean that there is currently no stability or certainty about funding for our corporate regulator,” said Governance Institute chief executive Steven Burrell.
“ASIC needs more money when it is busiest in a downturn, which is exactly when Canberra dips into deficit and tightens the screws on expenditure.”
Mr Burrell said ASIC needs more resources to "sort out the wreckage" from "boom" periods.
“The FSI recommendation for a three-year funding model supported by an appropriate user-pays regime was designed to ensure that ASIC can plan how to deploy its resources and have flexibility about where they are needed most.
“The Capability Review is to help ensure that ASIC has the appropriate skills and culture to adopt a flexible risk-based approach to its future role. If no certainty is granted to ASIC as to funding over a three-year period, it has no flexibility as to how it spends its budget,” Mr Burrell said.
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