The final report of the commission has recommended that ASIC should take the lead in enforcing all provisions in the SIS Act as a conduct regulator, and that the corporate regulator considers court action as its approach to enforcement.
Commissioner Kenneth Hayne has also called for the establishment of a new oversight authority for APRA and ASIC, independent of government, to assess the effectiveness of each regulator in discharging its functions and meeting its statutory objects.
“Too often, financial services entities that broke the law were not properly held to account. Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished,” said the report.
Federal Treasurer Josh Frydenberg knocked back suggestions that the regulators were being systematically defunded, pointing to the $170 million funding boost to the regulators and courts last year.
“We have increased their funding by $170 million across the regulators and our enforcement agencies and we will ensure they have every amount of resource necessary to do the job,” said Mr Frydenberg.
“I believe they have got the funding necessary. It was more in the approach that they took where they preferred negotiation over litigation.”
But bodies which regulate financial planners, like the Tax Practitioners Board, have been complaining of significant funding constraints.
Last year, former TPB chair Ian Taylor said budgetary constraints caused the board to struggle with renewal applications of registered tax (financial) advisers.
Mr Taylor said in his annual review address that the 2016–17 financial year was “challenging” for the TPB on the resources front, as it grappled with a substantially increased workload, particularly in relation to the registration of tax (financial) advisers.
“At 30 June 2017, 78,593 tax practitioners were registered with the TPB. This population is now more than three-times the number registered when the TPB first commenced in 2010, yet our budget in 2010–11 was $16.8 million,” a spokesperson told Accountants Daily.