Good morning,
This is my first time before a parliamentary committee since taking the role of ASIC Chair on Monday. I want to thank and acknowledge my predecessor, Joe Longo, for his stewardship of ASIC over the last five years. Joe made a significant and lasting contribution to ASIC and our work in serving Australian consumers, investors and markets.
I am joined by Commissioners Alan Kirkland, Kate O’Rourke and Simone Constant, CEO Scott Gregson and Executive Director for Regulation and Supervision, Peter Soros.
ASIC has done a range of important work in recent times. We have strengthened our enforcement stance and taken decisive action against serious misconduct, obtaining record penalties and record sentences, while also advancing key regulatory priorities and helping ensure banks return record amounts to vulnerable Australians.
We drove the landmark ASX inquiry, have significantly contributed to the thinking about public and private markets, and made significant progress with regulatory simplification, highlighting ASIC’s role in helping to enhance productivity and support economic growth.
I look forward to building on this work in the coming years.
Given this is a Budget Estimates hearing I want to give a brief update to the committee on a range of matters, including initiatives funded in last month’s federal Budget. This funding goes to core areas critical to ensuring we continue to engage with everyday Australians while delivering on the key requirements of ASIC.
First, the Government is investing to complete Tranche 2 of the RegistryConnect program to stabilise and uplift ASIC’s business registers. This builds on previous funding and will help us improve online services for company registrations, lodgements, annual reviews, and other transactions, link Director IDs to company records, upgrade registry systems, and implement new functions for company deregistration powers. These registers support millions of everyday decisions including extending credit, verifying a company, entering commercial arrangements or assessing risk.
Second, the Government is investing to strengthen oversight of managed investment schemes. This measure invests in ASIC’s digital capability, improving our tools to access existing non-ASIC government data and enhance supervision of this sector.
While we believe there is no ‘silver bullet’ to these complex issues, better access to data will help us respond to existing and emerging threats, including those highlighted by the First Guardian and Shield matters.
The Government has also committed to funding to improve governance arrangements for registered managed investment schemes and enhance ASIC’s supervision of the sector.
Third, with respect to the First Guardian and Shield matters that we have discussed with the Committee previously, we have continued a range of intensive work with a view to returning money to investors who have lost funds. We are running an extensive communications campaign to ensure that people are alerted to the issues and encouraging AFCA notifications. We currently have 14 proceedings in the Federal Court against 26 defendants relating to these issues. This includes recent action against Equity Trustees for allegedly failing to meet its trustee obligations and not act in members’ best financial interests when onboarding the First Guardian master fund.
This is the second action we have taken against Equity Trustees and the fifth against a super trustee as part of our investigations. It means that ASIC has now commenced proceedings against every super trustee that made Shield or First Guardian available on its platform. This work to date has resulted in the return to investors of more than $400m.
Fourth, this Committee is often interested in ASIC’s criminal work. We have recently seen significant custodial sentences imposed in a number of matters, including the sentence of Anthony Torre to six years in prison for fraud involving the misappropriation of superannuation funds; Remedy Housing officials sentenced for lengthy prison terms for dishonest offences and the misappropriation of customer funds; and Rodney Forrest, sentenced to 5 years and 3 months for insider trading and procuring others to trade in more than $3m of Platinum Asset Management Limited shares. This was the first outcome for our new specialist insider trading team which investigated and finalised the case within 16 months of the offending.
Finally, ASIC has commenced a preliminary investigation into allegations about the conduct of several registered company auditors at KPMG that came to light after whistleblower claims were first aired in the Parliament. Our focus is to determine whether the conduct sanctioned by KPMG may be a breach of the duties of a registered company auditor and whether each of the registered company auditors have maintained their fitness and propriety in accordance with the Corporations Act.
We look forward to taking your questions.
