ASIC Report: Reform and Accountability

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the main recommendation of the Senate Economics References Committee's report?

Increase funding for ASIC to improve its performance

Reduce the scope of ASIC's responsibilities

Break up ASIC and replace it with new regulatory agencies (correct)

Improve transparency and accountability within ASIC

What is the main issue with ASIC's responsibility?

It is impossibly broad and cannot be effectively fulfilled (correct)

It is not well-defined and lacks clarity

It is too narrow and limited

It is not aligned with the country's economic goals

What is the characterization of ASIC's approach to enforcement?

Innovative and adaptive, using new approaches to address misconduct

Proactive and aggressive in pursuing serious misconduct

Conservative and risk-averse, avoiding litigation

Gun-shy and reactive, prioritizing public criticism over enforcement (correct)

What is the significance of ASIC's 97% litigation success rate?

It suggests ASIC is not taking on challenging cases and is only pursuing easy wins Signup and view all the answers

What is ASIC's approach to public accountability?

Deflective and secretive, using a highlights package to justify its existence Signup and view all the answers

What is the consequence of ASIC's approach to enforcement?

Tens of thousands of reports of potential misconduct are ignored Signup and view all the answers

What is the comparison made to ASIC's resourcing?

To the Securities and Exchange Commission in the United States Signup and view all the answers

What was the duration of the Senate Economics References Committee's inquiry?

20 months Signup and view all the answers

What percentage of reports of misconduct from insolvency practitioners does ASIC take action on?

Less than 1% Signup and view all the answers

What is ASIC's approach to responding to reports of misconduct?

It derides reports of misconduct as mere complaints Signup and view all the answers

What has been the trend in ASIC's enforcement activity over the past 10 years?

It has seen little change or increase Signup and view all the answers

What does the report recommend for ASIC?

Breaking up ASIC and major governance changes Signup and view all the answers

What did the Hayne Royal Commission into the Banking and Financial Services industries find about ASIC?

It had consistently failed to take action against large financial institutions Signup and view all the answers

What is the outcome of many of ASIC's enforcement actions?

Low-level sanctions and agreed enforcement outcomes Signup and view all the answers

What is the criticism of ASIC's governance structure?

It is too broad and ineffective Signup and view all the answers

What is the description of ASIC's approach to enforcement activity?

Too slow and clumsy Signup and view all the answers

What is the conclusion of the report about ASIC's effectiveness?

It is a failed regulatory experiment Signup and view all the answers

What is the main concern about ASIC's approach to misconduct reports?

It does not take action on most reports Signup and view all the answers

Study Notes

ASIC Report Findings

The Australian Securities and Investments Commission (ASIC) should be broken up and replaced by new regulatory agencies, according to a damning report by the Senate Economics References Committee.
The report calls for greater transparency and accountability from ASIC and a fundamental change to its enforcement approach.

ASIC's Problems

ASIC has an impossibly broad responsibility, which it has not shown it can effectively fulfill, despite being chronically under-resourced.
ASIC is a "gun-shy" regulator, reacting to public criticism and fumbling its caseload, rather than investigating and punishing serious misconduct.
ASIC has a 97% litigation success rate, but this is due to not taking on challenging cases and repeatedly running the same type of matter.
ASIC ignores tens of thousands of reports of potential misconduct, and its approach to public accountability is to deflect criticism.

Flawed Approach to Misconduct

ASIC's approach to responding to reports of misconduct is fundamentally flawed, dismissing them as mere complaints.
Reports of misconduct are often dismissed immediately, and ASIC fails to provide accurate and timely information about its enforcement activity.
ASIC's funding and staffing have increased over the past 10 years, but its enforcement activity has seen little change.

Recommendations

The report makes 11 recommendations, calling for ASIC to be broken up and for major governance changes.
The Hayne Royal Commission found that ASIC had consistently failed to take action against large financial institutions and was too reliant on low-level sanctions.

Conclusion

The report shows that nothing has changed since the royal commission, and ASIC is too slow, too clumsy, and doesn't always pick the right cases to run.
ASIC is stultifying under ineffective governance and a mandate so broad that it can point to almost any action as being relevant to its duties.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

A report by the Senate Economics References Committee calls for significant changes to the Australian Securities and Investments Commission (ASIC), citing a need for greater transparency and accountability.