In a statement, identification and coding agency APIR Systems chief executive Chris Donohoe pointed to the low level of trust in financial institutions and said global harmonisation of regulation would assist in rebuilding customer confidence.
“Any regulatory changes that are implemented as a result of the royal commission should be seen as an opportunity to harmonise with other similar jurisdictions where possible,” Mr Donohue said.
“This is becoming particularly urgent as regulatory developments in one country’s jurisdiction can impact operators in other countries, even when the overseas development is not a local regulatory requirement.”
For example, a number of Australian banks, brokers and trustees recently found they were unable to make transactions with European parties if they did not have a Legal Entity Identifier (LEI), a requirement of the Markets in Financial Instruments Directive (MiFID II) regime.
“Although it is a European regulatory requirement, it nevertheless impacted any Australian entities wanting to transact with certain European counterparties,” Mr Donohoe said, adding that offshore regulation would continue to affect domestic operations.
Mr Donohoe also said that coding systems were “now an integral part of the compliance and risk management framework”, pointing to the Super Product Identifier Number (SPIN) code as an example.
“Once seen simply as a product identifier, it is now used as the Unique Superannuation Identifier (USI) in SuperStream to uniquely identify an APRA fund and/or its superannuation product which an employee (member) is contributing to.
“Like LEI and MiFIID, this is another example of identifiers becoming critical part of Government reporting and processing systems.”
“The way financial products are categorised in each region” was a crucial element to a strong and stable financial ecosystem, Mr Donohoe said.
“Harmonised global regulations have the potential to result in greater opportunities for Australian wealth managers and, quite possibly, in better outcomes for ‘mum and dad’ investors as well.
“Essentially, they will result in a financial system that is transparent, functional and easily understood, and investors that are confident and engaged.
“These standards bring transparency to a complex financial ecosystem. In short, it supports the creation and operation of a competitive and resilient financial market.”
In December 2017, APIR Systems hired a new general manager for client development.
