Financial services companies have been told to stop “bagging” the industry’s governing legislation to their foreign counterparts.

Pauline Vamos – a former key implementer of the Financial Services Reform Act – says Australian companies in the sector should get on with running their businesses.

Sunrise Exchange News contacted Ms Vamos – now an independent risk management consultant who has recently worked with the Hong Kong regulator – after a report in funds management newsletter Money Management.

She was reported as saying many countries are steering away from Australia’s legislation to avoid making similar mistakes and our international reputation had been harmed by poor implementation.

But Ms Vamos says her comments were taken “way out of context”.

“I also spoke about a lot of benefits of the legislation, but that part of the interview wasn’t acknowledged.”

Sydney-based Ms Vamos says the legislation is viewed internationally as cutting-edge. No one is arguing it is fantastic, but some international players don’t understand its principles. “They know they have to be regulated… to gain international recognition, but the question is how they go about it.”

Ms Vamos says Australian companies are “bagging” the legislation to overseas counterparts because they themselves don’t understand it.

She says many Australian financial services companies outsource most of their licensing work to lawyers, rather than gaining an understanding of the legislation themselves.

These comments aren’t anything new from Ms Vamos. In 2003 she told Sunrise Exchange News too many companies relied on lawyers. “Some of these companies might gain their licences, but when it comes to the crunch the question is, will they understand their long-term requirements… The legislation is specifically designed for companies to handle themselves.”

She says some Australian companies need to go back to the drawing board to understand what financial services reform is all about. “Many have been managed by their compliance officers rather than management managing the compliance officers.”