Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

I am pleased to speak to the Parliamentary Joint Committee on Corporations and Financial Services report on the statutory oversight of ASIC and the report on the 2009-10 annual reports of bodies established under the ASIC Act. As the chair, the member for Oxley, has noted, this committee reports to parliament from time to time on ASIC’s activities, and the committee’s report considers a number of these, including the expansion of ASIC’s responsibilities, its response to the Storm Financial issue, issues arising from the global financial crisis, ASIC’s complaints-handling system and ASIC’s financial literacy programs.

I highlight a couple of these themes. The committee explored with ASIC issues arising from the global financial crisis. These issues included the feasibility of a unique client identification system for the Australian market, the freezing of investor funds in late 2008 and regulatory reform. ASIC advised the committee that the United States has estimated the cost of implementing a unique client identification system in that country at US$4 billion upfront, with annual ongoing costs in excess of US$2.1 billion. As a result of these estimates, ASIC wishes to conduct further analysis and discussion in order to determine the feasibility of such a system. The committee notes ASIC’s advice that the Australian markets are operating well.

ASIC advised that, of the 93 frozen funds, 20 are now unfrozen while 32 remain frozen but offer periodic withdrawals. Applications can be made to access money from any of the funds if an investor faces financial hardship. ASIC advised that $155 million has been paid in hardship relief, with over 4,700 of the nearly 6½ thousand hardship applications approved.

The committee has previously informed the House that it maintains an ongoing interest in ASIC’s capacity to receive and resolve complaints. ASIC has advised that it receives between 13,000 and 15,000 complaints a year. Since commencing its role in monitoring consumer credit providers, ASIC has received 999 credit complaints from both consumers and industry. The committee notes with approval ASIC’s commitment to continuously improve its complaints handling process and to use information gained through the process to improve other areas of responsibility and service delivery.

The committee also sought ASIC’s advice about the effectiveness of ASIC’s financial literacy programs. ASIC advised that the programs are regularly reviewed in order to determine their effectiveness.  The committee is particularly interested in what populations need attention when targeting financial literacy programs, and the committee will continue to raise this issue with ASIC.

The chair has already touched on the report on annual reports in respect of the Financial Reporting Panel, so I mention in particular the Companies Auditors and Liquidators Disciplinary Board. The committee has expressed concern about the low numbers of applications made to the board. It is aware that some stakeholders in the sector have a view that disciplinary processes are not working as effectively as they should. The committee also notes concerns about the confidentiality of the board’s hearings reported in the inquiry of the Senate Economics Legislation Committee into liquidators and administrators. The committee does intend to revisit these matters once the government has formally responded to the report of the Senate Economics Legislation Committee.

I join the chair in thanking the secretariat for their assistance and hard work and the ASIC officials for their ongoing cooperation with the committee on behalf of this parliament.

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