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‘Forceful’ ASIC starts trust rebuilding mission

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The Australian Securities and Investments Commission (ASIC) has vowed to be a “forceful regulator” as it seeks to restore trust in the scandal-tainted financial services sector.

Chairman James Shipton has been harshly critical of the sector since taking up the role early this year.

Now the regulator says in its new corporate plan that financial services providers, including insurers, who fail to lift their game will face “sanctions and other actions”.

ASIC is under fire over its handling of poor corporate conduct, with critics saying the regulator is either too lenient or missing in action.

“We have an important role in driving the behaviours that will build and restore trust,” Mr Shipton said.

“We will do this by being a strategic as well as forceful regulator. Industry needs to address systemic issues, such as conflicts of interest. Firms need to ensure they adopt a culture of professionalism and make sure it is cascaded through the entire firm and sector.”

In this financial year, the regulator will focus on areas including poor culture and professionalism, practices that target financially vulnerable consumers, and misalignment of retail product designs and distribution with consumer needs.

The regulator introduced a new “threat, harm and behaviour” framework to its strategic planning process to better identify, describe and prioritise actual and potential dangers that need to be addressed.

“Over the next four years, we will identify the most significant harms to consumers, investors and markets,” the corporate plan says. “Where we identify misconduct, we will take regulatory action.”

Accelerating enforcement outcomes for serious misconduct is part of its strategic priorities for the next four years.

“ASIC will use whatever regulatory tools are necessary to address harms,” the corporate plan says.

Surveillance and enforcement will take up a combined 69% of the regulator’s activity this financial year.