By Amy Ciolek and Nicola Greenberg
The ABC news reports today that “for the first time, the Australian Securities and Investments Commission will have enhanced powers to place dedicated staff within the big four banks and wealth manager AMP to directly monitor governance and compliance and fight white-collar crime.”
This is a bold move that signifies that ASIC is changing its approach to a hands-on approach, and wants to get closer to the ground. It also comes as a surprise, given that ASIC’s budget was recently cut by around $28 million over three years. We understand that the Government will support the costs of this new initiative with around $70 million in new funding (if which only a portion will be allocated to in-house supervision activities).
The move raises a multitude of questions, such as:
- What will the regulator’s focus be once officially “inside” the banks?
- What skills will ASIC bring in-house? (…and will this include digital crime capability?)
- Will ASIC need to increase its costs to cover its in-house staff?
- Is this a Royal Commission move, or will its aftermath be felt long after the hearings?
- Will the OAIC, APRA and AUSTRAC follow ASIC’s approach?
One theme that may be observed is that our regulators are stretched, yet are expected to give more. What would our regulatory landscape look like if regulators were able to retain funds that they generated through enforcement activities and penalties?