ASIC’s Longo provides Mulino with policy roadmap
ANALYSIS
The Australian Securities and Investments Commission’s release this week of its private markets roadmap has been a tightly choreographed and major communications exercise which may prove to be the lasting legacy of outgoing chair, Joe Longo.
ASIC had, in fact, been building for weeks towards Longo’s appearance yesterday before the National Press Club in Canberra with journalists being provided with embargoed documentation leading into the chair’s speech including the key reports which are foundational to the regulator’s preferred policy position.
ASIC as a Commonwealth regulatory agency will argue that it does not write Government policy but, in this case, it has visibly provided a roadmap for a Government which is struggling to deal with the fall-out from the collapse of the Shield and First Guardian funds and the patent folly which is the funding mechanism for the Compensation Scheme of Last Resort (CSLR).
Longo used much of his NPC speech yesterday to outline ASIC’s policy and regulatory wish-list and it is notable that he found time towards of the end of his speech “to acknowledge the work the Assistant Treasurer [Daniel Mulino] has been doing considering this important issue”.
The important issue to which Longo referred was a strengthening of the regime around managed investment schemes – something which Mulino had begun referring to over recent weeks, including with respect to the transparency and capital backing of those schemes.
Thus, Longo was clearly singing off a ministerially-endorsed hymn sheet when he told the NPC in reference to private markets “we need to see s significant uplift in practices and if the sector can’t get this right, law reform may be required – introducing new, mandatory obligations to lift standards and to address poor consumer outcomes”.
“More rules would not be my first choice, however, if poor practices undermine the integrity of this sector as it grows we may be left with no other option,”
Longo said.
“There is also work to be done flowing from the recent Shield and First Guardian collapses. There is an opportunity to strengthen the system for Australians.
“So, I am repeating ASIC’s view of the need to strengthen requirements for managed investment schemes, improve data reporting, and give ASIC the powers we need to oversee this sector effectively.”
It will also not have been lost on those listening to Longo that he made special mention of investment platforms and superannuation.
Referencing possible legislative and regulatory change, Longoe said: “Other ideas should be considered, including disrupting the lead generation businesses that trick consumers into moving their super, slowing down the superannuation switching process, reconsidering the retail/wholesale test, and extending the proposed prohibition on unfair trading practices to financial services”.
“We also need to look ahead. One of the fastest-growing segments of our superannuation system is platform trustees, with investments up 14.5 per cent in the year to June.
“One of the key themes of ASIC’s work in recent years has been to highlight superannuation trustees’ critical responsibilities to members.
“That’s why we keep asking whether trustees are doing enough to meet their obligations, including when things go wrong. This isn’t a question for ASIC alone – it’s a challenge for all of us. Getting it right will mean greater investor confidence and a more resilient, diversified market.”
Typical ASIC. We have issues with private markets and what is being said by them. Obvious response is to look at financial advisers.
Typical ASIC.
MIS major problems, almost totally unregulated.
MIS $$$$$ Billions invested in dodgy shops.
ASIC roll out the usual, lets blame Advisers.
What are you doing to Regulate MIS ASIC ????????????????????
Surely Mr Longo would question the performance of the regulator. If only ASIC had of acted on all the early tip-offs, reviewed a sample of SOA’s and/or requested data from platforms showing inflows into new investment options it would have been easy to identify what was going on in Shield/FG.
So fum in industry funds has been increasing at a massive rate for well over a decade. No massive focus from ASIC in my opinion.
Then retail wrap platforms start growing (still with way less than ISF in FUM) however there seems that the ASIC focus will be turned to this space.
What is wrong with ASIC?
“Slowing down the superannuation switching process”
Is this some kind of joke? Have you seen how hard it is to work with some rubbish (self-interested) Trustees to get their funds rolled out already?
I can already imagine a world where someone gets a financial adviser to provide them advice to move to a wrap platform, the advice implementation begins with a rollover request.
This then triggers a call to the client from a “New Class of Adviser” employed by the incumbent Trustee in an attempt to undermine the PROFESSIONAL advice (and the relationship with the adviser) to potentially retain the FUM.
Would not be surprised in the slightest after this, the member will have to wait 60 days for the rollover to occur.
At day 59, the super fund trustee will change their withdrawal rules / paperwork slightly then go back to the adviser requesting new paperwork to reset the clock.
You watch….