Govt warned against reducing scrutiny of ASIC and APRA

The Government is being urged not to wind back the level of scrutiny of both the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority below levels recommended by the Royal Commission.

The Governance Institute has expressed concern that new legislation will have the effect of reducing the frequency of the periodic reviews of the two regulators stating this run counter to the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

In a submission filed with the Senate Economics Legislation Committee, the Governance Institute said, “A key recommendation (Recommendation 6.14) of the Financial Services Royal Commission was biennial reviews of APRA’s and ASIC’s effectiveness in discharging their respective functions and statutory objects capability”.

“Given the review arrangements have only been in force for one review cycle so far (2023), our members consider there has not been sufficient time to assess whether there is a need to changing the review frequency,” it said.

“Our members acknowledge the resources required to respond to a biennial annual review cycle, as well as the limited time to consider and implement any recommendations. Nonetheless, they consider that the current two-year interval is appropriate,” the Governance Institute said.

“If any lengthening of the review cycle is to be considered, the maximum they consider appropriate would be three years.”