ASIC to undergo audit

The Australian Institute of Company Directors (AICD) has welcomed the Federal Government’s Capability Review of the Australian Securities and Investments Commission (ASIC) as a timely opportunity to review the focus, governance and funding of ASIC.

The review which is the first in 17 years, was announced by Assistant Treasurer Josh Frydenberg, and follows recommendations from David Murray's Financial System Inquiry report, which called for a review of the capability of all major regulators every three to five years. It will be headed by Karen Chester GAICD, full-time commissioner with the Productivity Commission; Mark Gray FAICD, former chief executive officer at the Queensland Treasury; and barrister David Galbally AM QC MAICD.

The panel will be supported by private and public sector personnel to evaluate how effective ASIC is in using its powers and examine how the regulator identifies and prioritises immediate and future risks. Consideration will also be given to how ASIC allocates resources between surveillance, education, policy, enforcement and litigation. Governance culture and the skills of its staff will also be examined.

“A well-funded and effective corporate regulator is essential for efficient financial markets and good corporate governance,” said John Brogden, AICD Managing Director & Chief Executive Officer.

“It is important to improve the clarity of ASIC’s responsibilities and determine the funding model that will give it sufficient resources to meet its extensive objectives.”

Brogden added that improving the commercial knowledge within ASIC would achieve more effective consultation between ASIC and the companies it regulates and help to avoid regulatory over-reach.

He also welcomed the commitment to consultation as part of the Capability Review.

“Improving consultation and understanding of business will assist ASIC in the performance of its regulatory functions. We welcome the ASIC Capability Review and look forward to playing an active role in its deliberations.”

The panel will provide a final report to the Government by the end of 2015.