Will ASIC retirements/resignations end controversy?

ANALYSIS

Having been the subject of questioning and some criticism by parliamentarians, the most senior executive ranks of the Australian Securities and Investments Commission (ASIC) will have altered dramatically by the middle of next year.

The news yesterday that ASIC’s long-serving chief executive, Warren Day, will be departing his role tp join the Commonwealth Director of Public Prosecutions (CDPP) needs to be seen against the background of the other departures which have occurred over recent months, not least that of former deputy chair, Karen Chester.

It must also be seen against the background of other departures including commissioner, Danielle Press and the controversy which surrounded the exit of former ASIC chair, James Shipton and his former deputy chair, Daniel Crennan.

In other words, ASIC is experiencing change both at commissioner and executive level.

In announcing Day’s departure as ASIC CEO yesterday, the regulator’s chair, Joe Longo, also took the opportunity to announce that the Day’s interim replacement, executive director of Markets, Greg Yanco, would also be retiring next year, prompting a search for a new CEO.

As well, Longo announced the impending retirement of ASIC’s executive director of Enforcement and Compliance, Tim Mullaly.

Much of the controversy which has surrounded ASIC pre-dated Longo’s appointment as chairman and, importantly, Day, Yanco and Mullaly, have been full-time public servants within ASIC rather than statutory appointees such as Chester, Shipton or, indeed, Longo himself.

Indeed, if the parliamentary questioning around the ASIC controversy proved nothing else, it proved that the chairman has little power to discipline or otherwise deal with those the Government appoints as commissioners.

Asked by NSW Liberal Senator, Andrew Bragg whether, as chairman, there were enough options and remedies available to him to deal with cultural problems, Longo’s formal answer was delivered by ASIC and made the point that the chair could not act on his own.

“The only legislative sanction available in relation to a Commissioner is termination of their appointment by the Governor-General under section 111(1) of the Australian Securities and Investments Commission Act 2001 (ASIC Act) on limited grounds. Relevantly, the ASIC Chair is not empowered to formally sanction or discipline Commission members,” ASIC said.

“The grounds for the Governor-General to terminate the appointment of a Commissioner includes:

• misbehaviour (s 111(1));
• where a full-time member engages in outside paid employment without the Minister’s consent (s 111(1)(b))
• a contravention, without reasonable excuse, of s 123 or s 125 (these provisions respectively require certain interests to be declared to the Minister, and to ASIC) (s 111(1)(e)) • a contravention, without reasonable excuse, of s 29 of the Public Governance, Performance and Accountability Act 2013 or PGPA Rules made for the purposes of that section (s 111(1)(f)).