Shield/First Guardian Budget insulation for ASIC

Mike Taylor

Managing Editor and Publisher

5 May 2026

Continuing investigation and legal action around the collapse of the Shield and First Guardian funds are likely to have insulated the Australian Securities and Investments Commission (ASIC) from any significant expenditure cuts in next week’s Budget.

But, on the down-side for financial advisers, the Treasurer, Jim Chalmers, has signalled just how tight the Budget will be as the Government seeks to deliver cost of living relief while containing spending.

Chalmers said yesterday that there would be “more dollars in savings than dollars in tax reform” in the Budget.

“There will also be more dollars in savings than dollars in tax reform. The point that I’m making there is that savings and spending restraint is doing a lot of the heavy lifting in the very responsible Budget ,” he said.

The Government’s Budget approach to ASIC and the Australian Prudential Regulation Authority (APRA) will be important where much of the legal action initiated by ASIC around Shield and First Guardian will begin to cost serious money from the second half of this year.

Even a year ago, ASIC said that where Shield and First Guardian are concerned it had more than 40 investigators working across matters and had been to court more than 40 times carrying out a range of enforcement actions.

The ASIC legal action on foot includes that relating to Falcon Capital, Keystone Asset Management, Equity Trustees, Diversa Trustees and that relating to research and ratings house, SQM Research along with actions initiated against Sequoia-owned financial planning licensee, InterPrac and its authorised representative firm, Venture Egg and that firm’s principal, Ferras Merhi.

As the outgoing chair of ASIC, Joe Longo many of those the regulator is seeking to pursue are “cashed up” and therefore have the capacity to employ highly skilled lawyers.

The Minister for Finance, Katy Gallagher said the Budget would include $2.7 billion in savings in 2029-30 from reduced spending on external labour and non-wage spending like travel and property hospitality across the Australian Public Service (APS),

Gallagher said there would be savings across every portfolio and referenced the need for agencies to maintain discipline with the Government expecting them to reduce spending over time