A speech by Sean Hughes, Director, Deposit taking, Insurance, Superannuation and Consumer protection, ASIC, to the Asian Development Bank - Managing Regulatory Change symposium on Electronic Distribution of Financial Products and Consumer Issues, Manila, 23–24 November 2000.
Introduction – ASIC's role as market integrity and consumer protection regulator
The Australian Securities and Investments Commission (ASIC) is an independent Australian Commonwealth government body constituted by the Australian Securities and Investments Commission Act 1989. It was first established on 1 January 1991 as the Australian Securities Commission, to administer the Corporations Law. In July 1998, it received new consumer protection responsibilities and its current name.
ASIC's charter of responsibilities includes:
- regulating and enforcing laws which promote honesty and fairness in financial markets, products and services and in Australian companies
- ensuring that investors and consumers act prudently and can rely on the integrity of the market, because ASIC enforces their rights, warns them of risks and takes action to improve standards of behaviour across the financial sector
- underpinning the strength, growth and international reputation of Australia's financial markets.
ASIC regulates superannuation (pension) funds, insurers and deposit-taking institutions, by:
- setting standards about what those institutions tell their customers;
- monitoring their sales practices and compliance with codes of practice
- checking customer complaints systems
- cooperating with its co-regulator, the Australian Prudential Regulation Authority (APRA) on issues of joint regulatory interest and concern
- investigating and taking action against misconduct.
ASIC also regulates finance sector intermediaries (such as dealers, advisers and brokers) who are involved in the distribution of information and sale of products and services to customers, by:
- setting standards for their education, training and operations;
- licensing and registering them before they start operating or dealing with customers
- recording their details and the names of their authorised representatives on public registers, which can be searched electronically
- monitoring the quality of the advice they give
- investigating and pursuing misconduct through enforcement action.
As at 30 June 2000, ASIC employed 1,234 full time equivalent staff throughout each state and territory in Australia. Those staff act under the direction of three fulltime Commissioners, appointed by the Governor - General on the nomination of the federal Treasurer.