ASIC to review its licensing decisions
The Australian Securities and Investments Commission (ASIC) will run a pilot project aimed at assessing the quality of decisions granting Australian Financial Services Licenses (AFSLs).
The regulator has revealed its intention to run the pilot stating that it is in line with a suggestion made by the Financial Regulator Assessment Authority (FRAA).
ASIC said the pilot would measure the quality of licensing decisions by assessing reports of misconduct on recently granted licenses and Administrative Appeals Tribunal review.
“We will also consider the use of Australian Financial Complaints Authority (AFCA) complaints and regulatory actions, including enforcement outcomes, bannings and surveillances,” it said.
Answering questions on notice as part of the continuing Senate Economics committee inquiry, ASIC also reinforced the fact that a number of reports and Parliamentary Committees had urged against the regulator being subject to external oversight.
“Previous inquiries. royal commissions and reviews have considered the advantages and disadvantages of ASIC (and other regulators) adopting an independent non-executive board model. The Financial System Inquiry (December 2014) and the Financial Services Royal Commission (February 2019) recommended ASIC be subject to an external oversight body to assess ASIC’s effectiveness rather than move to a non-executive board model, and the Senate Committee Inquiry (June 2014) ultimately did not recommend that ASIC move to a non-executive board model,” it said.
“In March 2022, the Parliamentary Joint Committee on Corporations and Financial Services noted that several previous reviews ‘all conducted that an external governance board in a statutory authority would blur responsibility and accountability’, and were of the view that given the role of the Treasurer in respect of ASIC, ‘an external governance board would not only be essentially redundant but would also create unnecessary confusion and blur responsibilities.’
“The Committee concluded that ‘while no governance model or framework for a statutory authority is perfect, ASIC’s current governance framework appears appropriate and fit-for-purpose·. that ‘while the idea of an external board may be superficially attractive. it is manifestly inappropriate for an independent statutory authority such as ASIC and would create far more problems than those it purports to solve’,and were of the view that ‘the issue of an external governance board does not need to be revisited in the future’.”
I do find it interesting that an AFSL can be granted in 3 months. Even though, by law, moving between AFSL’s requires a reference check, ASIC don’t enquire with the current AFSL when granting licenses to Authorised Reps.
Sometimes, when you hear they have their own AFSL, you think, great move! Other times you are in shock that they are being let loose, unsupervised on the general public.
Yep, because Advisers that have degrees (some with Masters), passed a FASEA exam, zero complaints with AFCA, supply references, being doing a job for years or even decades, client surveys that show they are loved by decade long relationships with clients and have their lives on Google…..
that process to grant a license should take ASIC way more time than three months to make a call. A call as to whether they should be responsible for their own conduct and be personally held accountable facing both criminal and civil convictions…..hell we can’t have that can we, best if we stick to the current system and keep doing the same old same old.
Are you serious, or work in the public service or a super fund and need a couple of smoke breaks before 11am and some time off because of the No vote? Don’t think it would take me three months to make a determination as to whether an existing Adviser should be trusted enough to be personally held accountable.
Why does any qualified (actually qualified) adviser even need to be under the AFSL regime? AFSL should be reserved for the big teams within product providers providing their own version of “advice” as a way of supervision.
Yes we need more pubic servants in ASIC. Let’s open up a separate website for this process as well. Thinking about the upcoming requirements to be registered (oh Advisers weren’t registered apparently, just licensed and authorised) with ASIC, I guess some staff will have to be moved from the existing “Authorizing” section, and perhaps the newly set up “registered” department and the existing “licensed” team to this new special investigation section.
Or we can continue to have large licensee’s fight against this idea of individual licensing because if actual individuals found out the cost and process of ASIC duplication in being “authorised” and “registered” and “licensed” most common sense individuals would ask WTF.
But yes, let’s direct ASIC staff away from chasing the billions lost in scams to target Financial Planners because the concept of “self regulation” is just beyond ordinary Public Servant.