Senator the Hon. Mathias Cormann
Minister for Finance
Acting Assistant Treasurer
Date: Friday, 24 October 2014
The Government has carefully considered all of the 61 recommendations made by the Senate Economics Committee inquiry into the performance of the Australian Securities and Investments Commission and today releases its response to those recommendations.
A large number of the recommendations were directly addressed to ASIC, which is an independent statutory authority.
ASIC has responded positively to the Senate Committee's report.
Specifically, ASIC has agreed to establish an Office of the Whistleblower within ASIC to improve the way it deals with whistleblowers. ASIC has also started to improve its communications and enhanced transparency, by revamping its website to make it more accessible.
It has increased its monitoring of enforceable undertakings, including the reporting of the outcomes.
In the period since the release of the Senate Committee report, ASIC has worked closely with the Government on the establishment of an enhanced public register of financial advisers. Further details on the establishment of that register will be provided in a separate announcement today.
The Report's recommendations relating to the regulatory framework, including the role, objectives and funding of ASIC will be considered as part of the Government's broader response to the Financial System Inquiry (FSI).
In relation to the sustainable resourcing of ASIC into the future, the Government is also considering a proposal put forward by ASIC to introduce a cost recovery model in line with arrangements in place in other relevant jurisdictions around the world.
The Government does not accept the recommendation to establish a Royal Commission into the Commonwealth Bank.
There have already been several comprehensive inquiries into these events and related matters.
The Government considers that the most important focus today must be on resolving any legitimate outstanding grievances from affected Commonwealth Bank customers through the Open Advice Review Program and enforcement by ASIC.
That is why the Government has welcomed the Commonwealth Bank's announcement of the Open Advice Review Program, including the establishment of an Independent Review Panel headed by former High Court Justice the Hon Ian Callinan AC and the appointment of Promontory Financial Group as the Independent Expert for the program.
The Government considers that the Open Advice Review Program and the various related initiatives as undertaken by CBA should be given the opportunity to work and resolve any outstanding and unresolved legitimate issues for aggrieved CBA customers.
The Government will continue to work with all relevant stakeholders in the financial services sector to build on recent improvements to keep lifting professional, ethical and educational standards across the financial advice industry.
Our focus is on ensuring Australians saving for their retirement or managing financial risks through life can have access to high quality advice they can trust and which is also affordable.
That is why we will keep working to ensure Australia has the most efficient, transparent and competitive financial services system possible, where the retirement savings of Australians can be maximised and the tools are available and accessible to people across Australia to manage financial risks and opportunities through life.
We need to ensure we have a robust but efficient financial services regulatory system, which is competitively neutral so that people saving for their retirement or managing financial risks through life can access high quality advice they can trust and which is also affordable.
The Government's industry working group on the establishment of the ASIC Register of Financial Advisers will also carefully consider the Senate Committee's recommendations in relation to the proposed introduction of a national exam, continuous professional development requirements and the requirement for financial advisers to hold a relevant degree qualification.
In this context, the Government also supports the work of the Parliamentary Joint Committee on Corporations and Financial Services inquiring into proposals to further lift professional, ethical and educational standards in the financial advice industry.
The Government will consider the recommendations of that inquiry when the report is completed.
Karen Wu – 0428 350 139