ASIC wants more MIS data and oversight powers
The Australian Securities and Investments Commission (ASIC) has flagged seeking legislative and regulatory change from the Government to help pug the gaps which allowed the Shield and First Guardian failures to occur.
In doing so, ASIC chair Joe Longo has specifically named managed investment schemes as an area for reform to fix long-running issues.
As well, he used a speech to a Financial Services Council (FSC) event to call for a lifting of standards for gatekeepers, naming research houses, financial advisers, super trustees and the responsible entities of managed investments scheme.
“We need to ask ourselves whether some of the entities involved in this suspected misconduct are adequately captured by existing laws,” Longo said.
“Some key questions in ASIC’s focus include: Are financial and professional indemnity requirements adequate? Do we need to place limits on what superannuation can be invested in? Should we demand more of superannuation trustees and responsible entities? Do we need to place restrictions on retail investments in high-risk funds? Is the current retail client definition still ‘fit for purpose’? Or do we have to slow down the process of rolling over superannuation and creating an SMSF?”
On the question of managed investment schemes, Longo pointed out that ASIC and others had been calling for a range of reforms for almost three decades and made a case for ASIC being given power to collect data on managed funds.
He said that Australia’s managed investment scheme regime is “very permissive”
“The bar is so low to register one, it basically serves no barrier to entry at all. It doesn’t matter if the underlying asset is alpacas or meme coins – if the fund has a valid trust deed and disclosure document, ASIC has to register it,” Longo said.
“And then, so much of our work becomes about picking up the pieces afterwards when things go wrong, rather than preventing the harm – and who pays for that? All the people in this room.”
The ASIC chairman said that in circumstances where both Shield and First Guardian were made available through a platform it was incumbent on superannuation trustees to undertake sufficient due diligence of new investment options before making them available to investors.”
Jesus does the regulator need anymore power? They are drunk on it! Who would want to be part of this industry anymore. ASIC are an absolute joke.
The whole morning they spent talking about the unadvised middle and NCA’s but also cutting red tape as the key for these Australians to get advice. Then this muppet gets up and says we need more regulation. Of MIS’s maybe but advice?? Get lost Joe.
ASIC / Joe now admits that Canberra has been and remains useless for 3 decades on the whole chain of financial products misconduct.
“and who pays for that? All the people in this room.”
NO JOE THE ONLY PEOPLE PAYING ARE ADVISERS VIA CSLR.
Where in CSLR is there any PROPORTIONATE LIABILITY to the whole rest of the financial services chain??????
“The bar is so low to register one, it basically serves no barrier to entry at all. It doesn’t matter if the underlying asset is alpacas or meme coins – if the fund has a valid trust deed and disclosure document, ASIC has to register it,” Longo said.
Is this true…? THEY HAVE TO REGISTER IT!!!!
So a regulatory body has no oversight or control on what they regulate
““The bar is so low to register one, it basically serves no barrier to entry at all. It doesn’t matter if the underlying asset is alpacas or meme coins – if the fund has a valid trust deed and disclosure document, ASIC has to register it,” Longo said”
Surely if this were the case, then the fund should be flaged for sureveilance from ASIC? Of course we know they engage in tick-a-box compliance, and as they mentioned in the article, come in after the proverbial has hit the fan. ASIC dont need more regulation they arguably need better data from MIS and trsutees do do their actual job (enforcement) rather than swamping everyone with more regulations. It’s no wonder Australia productivity is down the drain if their default is more regs. Lastly, it’s not like Shield was not reported to ASIC by an industry body and advisers years ago – do your job ASIC!
I know this might be controversial but I am happy to hear ASIC acknowledging the gaps in their powers and the fact that they leave consumers at more risk by not having oversight of these products. That has been our argument all along, is that no one seems to be checking them, and this acknowledges that ASIC have not been because of the legislative restrictions placed on them.
When I tell clients that just because ASIC have approved a PDS does not mean that they have reviewed the actual fund, they cannot comprehend what sort of backwards regulation that is when they have always thought a PDS means some form of regulatory oversight.
I hope this leads to a better understanding of product failure versus Adviser failure, and a clear distinction betwen the two.
I just won’t hold my breath though.