Federal Budget helps sharpen the teeth of APRA and ASIC
03 April 2019
The final report of the Hayne Royal Commission released in February was highly critical of APRA and ASIC’s response to the issues raised.
With claims that the regulators were ‘toothless tigers’, the Government has been under pressure to take action. There have been mounting calls, from some areas, for the establishment of a new, independent, oversight authority to assess the effectiveness of each regulator in meeting their statutory objectives.
It’s therefore no surprise that Federal Treasurer, Josh Frydenberg, announced in his Budget speech that the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) will receive increased funding – totaling $606.7million over five years (from 2018-19), with:
- ASIC allocated more than $404.8 million in additional funding over four years - a 25% increase in its annual funding average
- APRA boosted by $145 million over four years - on average a 30 % annual increase.
With this sizable increase in budget, the regulators now have ‘sharper teeth’ and the financial services industry needs to be prepared for increased scrutiny and ‘bite’.
The funding boost to APRA and ASIC will provide them with increased resources to pursue deeper and wider investigations as well as focus on legal action.
Being hamstrung by staffing limitations and outgunned by large institutions and expensive legal teams will increasingly become a thing of the past.
Financial service participants must move now to mobilise response teams to rethink their historic regulatory engagement and response models. Taking a delayed and legalistic approach to regulator inquires and statutory requests will likely result in unwanted attention.
For more information, visit Financial Services Sector Inquiries or for a tailored discussion please contact Tim Aman or a member of your local financial services team.