KELLY O’DWYER:
I am pleased to announce today the new Chairman of ASIC. The Government will be recommending to the Governor-General that Mr James Shipton be appointed as the Chairman of ASIC for a period of five years commencing on 1 February 2018. I’m delighted to be joined by James here today.
Now Mr Shipton’s experience cuts across academia, regulation, the financial industry and also the law. He’s been engaged in this space for more than 20 years. He brings incredibly wide regulatory and market knowledge, as well as international experience in London, Hong Kong, Singapore and, most recently, the United States. Mr Shipton is currently the Executive Director of the International Financial Systems program at the Harvard Law School. From 2013 to 2016 he was also a regulator – Executive Director for the Intermediaries and Supervision and Licensing Division at the Hong Kong Securities and Futures Commission. Prior to that, he has had extensive experience, practical on the ground experience, in various roles in investment banking at Goldman Sachs, both in Asia and in Europe, and he commenced his career as a lawyer at Blake Dawson Waldron and later on, at Linklaters.
As recommended by the ASIC Capability Review, the Government has conducted an extensive, worldwide search to find the very best candidate for this critically important role to Chair ASIC. We have appointed here the most qualified and the most experienced candidate for the job ahead. I look forward to Mr Shipton being able to make a very significant contribution to the important work of ASIC as its next Chair and I would like to place on record my thanks and appreciation to Mr Greg Medcraft and his commitment over the past years in chairing ASIC and as a member of ASIC.
And I’d now like to pass to James to say a few words.
JAMES SHIPTON:
Thank you Minister. It is a great honour to be nominated to be the next Chair of ASIC. The challenges ahead for Australia’s financial system, and its regulators, are significant. In meeting those challenges, I very much hope to build upon the important work to date of the men and women of ASIC. I intend to ensure that ASIC will be a strong, proactive, efficient, innovative and strategic regulator that will utilise its many regulatory tools, including gatekeeping, supervising and enforcement. In order to do this, I will draw upon my years of experience in overseas markets – as a lawyer, as a market participant, as a regulator and now as an academic specialising in financial systems and regulation – to continue to bring best international practice to ASIC.
Financial markets are, ultimately, built on trust. Trust in the integrity of the market and trust in market participants. I see ASIC as a guardian of that trust and as an institution that is there to constantly remind market participants that finance only exists to serve the broader community and the economy.
I very much look forward to joining ASIC early next year, working with their dedicated staff to meet the challenges facing modern financial markets. Finally, I too would like to thank and congratulate the outgoing Chair, Greg Medcraft, for his stewardship and leadership of ASIC. It is very much my intention to build upon his and his colleagues’ hard work and successes. Thank you.
KELLY O’DWYER:
Thank you very much James. Now, do we have any questions?
JOURNALIST:
What do you see as your biggest challenge when you take over the role, assuming the Governor-General gives you the nod?
JAMES SHIPTON:
Yes, assuming His Excellency does. The greatest challenge I think is to make sure that ASIC is that innovative, leading regulator, to build trust and confidence in the markets and, importantly, for those investors in the community that are investing their savings, their retirements into financial markets. I see financial regulators as a leader, as a leading market participant, and what I want to do is make sure that ASIC is that leading market participant and leads by example.
JOURNALIST:
Greg Medcraft has said that it’s unfinished business in terms of the culture and the conduct at the banks, he thinks still needs to be addressed, still there’s an issue. Do you see yourself as, you know, picking up that baton and addressing those issues?
JAMES SHIPTON:
Culture is among the greatest challenges for all financial markets globally. I’ve been a great advocate of cultural reform in financial institutions and in the financial markets for a long time, including when I was at the Hong Kong Securities and Futures Commission. I’ve continued work at Harvard University in relation to the conduct and culture of financial institutions, working with overseas regulators. I very much intend to continue this important work.
JOURNALIST:
And the last thing is, have you been observing the conduct of the big banks, especially here in Australia, and what’s your assessment? Is it positive, is it negative at this stage?
JAMES SHIPTON:
I’ve been observing from afar and I’ve made the observation this is a global challenge and that all financial institutions need to continue their hard work on improving their organisational dynamics and their own organisation culture.
JOURNALIST:
The Government’s done a bit in recent years to boost the resources and the powers of ASIC in response to the banking situation. Are you happy with the framework that you’re inheriting, or would you like to have an audit of your powers and so forth and suggest changes, or you think it’s…
KELLY O’DWYER:
I might start first with that Phil because I think it’s very important that the regulator keeps the consumer at the heart of their thinking. The regulator is there to protect the consumer ultimately and it performs a very important role in the market. We believe in a very strongly resourced ASIC, an ASIC that has teeth, an ASIC that has powers to be able to take action when harm’s occurred. We also believe that it’s critically important that ASIC be very proactive in its market surveillance so it can prevent harm before real harm occurs and the Government has been going through a very extensive exercise in being able to provide ASIC with the right toolkit to protect, to be able to deliver on all of those objectives. So for instance, the Government has said in response to the Financial System Inquiry that we will be providing ASIC with the product intervention power. The work on that is very extensive and the Government will be making some further announcements on that before the end of the year. The Government has provided ASIC with the ability to be appropriately funded to perform its job through the levy, we also are going through an enforcement review at the moment to ensure that the penalties that apply right now are appropriate, and certainly we believe that the incoming Chairman with James in the Chair, that it is going to be critically important to be able to utilise that toolkit in order to be able to properly and appropriately protect consumers in the market.
JOURNALIST:
So, you’re happy with that toolbox?
JAMES SHIPTON:
I’m very much, I’m very happy with the reforms and the framework that’s been conducted in Australia and I would make the observation from a global perspective that I think Australia is one of the leading jurisdictions when it comes to the responses to financial crises, but also the ongoing challenges. So I’m very much looking forward to working with the Government, with other regulators, with ASIC, with industry participants and industry associations to ensure the ultimate outcome towards financial institutions.
JOURNALIST:
On another issue Minister, can we ask you about the clean energy policy. Can you guarantee for us that that will not drive up prices?
KELLY O’DWYER:
Well look I’m about to head into the party room right now where I’m sure we’re going to discuss this matter at great length. I’m also very confident that the energy minister and the Prime Minister will have something to say about this a little bit later so I won’t be drawn at this point.
JOURNALIST:
Can you guarantee for us though that this new plan that we now all know about, you know about, everyone knows about, can you guarantee for us that that’s not going to drive up prices?
KELLY O’DWYER:
I’m going to let the energy minister and the Prime Minister talk about this at great length after the party room has discussed it. Thank you very much
JOURNALIST:
Just one more question on ASIC, Minister, you said that Mr Shipton here is the most experienced and the most qualified and, but without wanting to offend him, he wasn’t the first choice, do you regret having to kind of change your choice and back down from the original…
KELLY O’DWYER
He is absolutely the Government’s choice. We are announcing the person who is most experienced for this job. We are announcing the person who has the best capability to be able to take ASIC forward over the next five years. He has gone through an extensive, merit based selection process. He is someone with experience in regulation directly. As a regulator he has been at the coal face. He is someone who has worked in the financial markets, in investment banking but also as a lawyer as well, and he is someone who is seen as a world expert, leading the International Financial Systems program at Harvard Law School. I don’t think you could get anyone more qualified or more experienced for the job and we are absolutely delighted that he has agreed to take on the role and the responsibility. Thank you.