Key Points
ASICs role: ASIC plays a pivotal role in maintaining a sound regulatory framework and an efficient capital market.
ASIC’s performance: ASIC has a strong performance record.
Funding: The Government has committed to ensuring that ASIC can continue to effectively perform its functions by significantly increasing its funding in recent Budgets.
Challenges ahead: I am confident that ASIC will meet its future challenges.
Good evening.
Thank you Jeff [Lucy], Jeremy [Cooper], invited guests, Parliamentary colleagues and, of course, the almost 400 Melbourne-based ASIC staff for having me here this evening.
I am delighted to have been invited here to officially open ASIC’s new Melbourne office.
As any real estate agent will tell you, if you’re considering a new home, or a new office, you need to consider three factors — “location, location and location”!
And by those criteria, ASIC has made the right decision to relocate here at 120 Collins Street.
It’s in the heart of Melbourne’s CBD. It’s close to the business community. You have the Town Hall just down the street, and St Paul’s and the Treasury Gardens are just a stone’s throw away. You are clearly in the right neighbourhood!
ASIC’s role
I also believe that this more high-profile location is consistent with ASIC’s important position within the business and financial community.
I believe that the ASIC staff who work in this landmark office tower play a pivotal role in promoting Australia’s efficient capital markets, and maintaining our sound regulatory framework.
Their work includes improving the performance of the financial system… promoting the confident and informed participation of investors and consumers… and administering the law with a minimum of procedural requirements.
The work of ASIC has enhanced Australia’s international reputation as a well-regulated market.
Indeed, the IMF Financial System Stability Assessment of Australia released in September 2006 noted that “Australia’s financial system is sound and healthy”.
In its 2006 World Competitiveness Yearbook, the IMF also ranked Australia first — out of 61 countries — for the conduct of corporate boards and the management of shareholder value.
That is certainly an impressive achievement and an achievement we must ensure continues.
ASIC’s performance record
ASIC has an impressive performance record…
It has a wide mandate. Its functions include regulating a broad range of laws affecting corporations and financial markets, products and services and the Commission has a proven record in carrying out this mandate.
In my address to the ASIC Summer School earlier this year, I reported that — last financial year alone — ASIC prosecuted over 350 companies or company officers for over 900 contraventions of the Corporations Act.
During the same period, ASIC had a 94 per cent success rate in litigation — a remarkable record.
I was also interested to learn, as reported in a more recent media release, of the successful prosecution by ASIC of 144 company officers over the last three months alone, with fines and costs totalling more than $288,000.
Could I take this opportunity to personally congratulate ASIC on this performance. Your hard work promotes confidence in Australia’s markets and maintains the effectiveness of our strong regulatory framework.
I should point out, however, that ASIC does a lot more than prosecute wrongdoers.
I see ASIC staff here tonight whose role it is to educate investors and the market, play a compliance role and protect consumers through education and other initiatives.
ASIC’s role in consumer education is a critical one.
During 2005-06, ASIC increased its educational activities, helping consumers to become better informed and more confident in using financial products and services and I want to take this opportunity to commend the Commission for its sterling work in this area.
ASIC funding
Because ASIC plays such a pivotal role in maintaining the integrity of our financial systems, the Government is committed to ensuring that it remains well-resourced into the future.
This is why the Australian Government has provided ASIC with significant funding increases over recent years. In fact, since 2000-01, the Government has increased ASIC’s funding by over 60 per cent in real terms.
In the 2006-07 Budget, ASIC received a significant funding boost of $235 million over four years.
This funding package will allow ASIC to maintain its current focus on the supervision and oversight of expanding financial markets and financial sector entities… to increase its surveillance of the financial services sector… to develop its presence in non-exchange based market trading… and to investigate and litigate matters of significant public interest.
In addition to this significant funding boost, the Government recently allocated an extra $1.6 million to fund its Better Regulation programme. This initiative is designed to further enhance the regulatory decisions ASIC makes, and to streamline the corporate registry.
We also recently granted ASIC an additional $600,000 for a scheme to pay back unclaimed monies to consumers more quickly.
Challenges for ASIC
Of course, ASIC’s work is not without its challenges.
ASIC staff faces them daily in carrying out their tasks.
But this evening I want to focus on three.
The first challenge that ASIC faces is to ensure that it strikes the right regulatory balance between — on the one hand — encouraging investment and entrepreneurial activity, and — on the other — protecting the interests of consumers and investors.
It is absolutely vital that we get this balance right - because the success of our corporate sector is central to ensuring Australia’s continued economic growth.
The second challenge for ASIC is to encourage compliance with the law by developing strong relationships with industry.
On this issue, the Commission is already developing improved relationships with industry through the Better Regulation programme I mentioned earlier. This important initiative will continue to make it easier for business to work with ASIC.
I strongly support the Better Regulation initiative, because it will reduce the compliance burden on business, in turn delivering increased benefits for mum and dad shareholders, and because it will ultimately improve the overall efficiency of our corporate sector.
ASIC’s work on reducing the compliance burden on business complements the Government’s commitment to achieving a Simpler Regulatory System.
As many of you would know, I am forging ahead with the Simpler Regulatory System Bill, which I plan to introduce into Parliament during the forthcoming winter sittings.
This Bill will implement significant measures to reduce red tape, which the Australian community has told me is impacting on their desire to interact more fully and effectively in the market place.
The third and final challenge I wish to talk about today is the requirement that ASIC keeps abreast of developments in a rapidly-changing and dynamic market.
A market in which financial products and services become ever-more sophisticated and complex, and in which technological change continually presents new risks and challenges.
Conclusion
As you can see, the view from these offices is outstanding.
But from what you have just heard, I think you’ll understand why the ASIC staff who work here won’t be getting too much time to enjoy it!
Ladies and gentlemen, my words this evening should leave you with no doubt about the high expectations that the Australian Government — and the Australian people — have for ASIC.
I have every confidence that ASIC will continue to meet those expectations.
Therefore, it gives me great pleasure to officially open this new Melbourne office, and in unveiling this plaque, I hereby declare the ASIC Office at 120 Collins Street, Melbourne, officially ‘open for business.’
Thank you.