ASIC’s remit is very large. It has increased greatly since ASIC was first established.
As I noted in the Interim Report,[1] ASIC now administers 11 pieces of legislation and their associated regulations.[2] The legislation itself has grown longer and more complex. The length of the Corporations Act, for example, has increased by 178% since 1981.[3] In preparing Background Papers for its hearings, this Commission found that an introductory overview of the law governing consumer credit in Australia required 86 pages of explanation; financial advice and sale of financial products required 114; and small business lending law that did not overlap with that governing consumer lending, required 41 pages to explain.
ASIC’s remit in respect of consumer protection has evident parallels with the ACCC’s remit in respect of consumer protection in other sectors of the economy. Consumer protection provisions administered by ASIC are often expressed in terms that are not materially different from how those administered by the ACCC are expressed.[4]
The ACCC has chief responsibility for competition questions in the Australian economy. Competition in parts of the Australian financial services industry is not always strong and has not prevented the misconduct considered by this Commission.
All of these are matters that might suggest there would be some advantages to be gained by detaching some aspects of ASIC’s remit and requiring the ACCC to take responsibility for their administration. And the force of those arguments would not be lessened if, as ASIC urges, it were to take on a larger role with respect to conduct regulation of registrable superannuation entities (RSEs) than it now has.
All this being so, why not alter ASIC’s remit? Why not modify the twin peaks model?
[1] FSRC, Interim Report, vol 1, 294–5.
[2] See also ASIC Capability Review, Report, 133.
[3] ASIC Capability Review, Report, 134.
[4] See, eg, the unfair contract terms discussed in the Interim Report: FSRC, Interim Report, vol 1, 281–5.