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ASIC enforcement action jumps

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Enforcement action by the Australian Securities and Investments Commission (ASIC) was “significantly increased and accelerated” in the 2019 fiscal year, the regulator reveals in its latest annual report.

The number of ASIC enforcement investigations  rose by a fifth in the year to June 30, with a  51%  rise  in the number of enforcement investigations involving Australia’s largest financial institutions. The number of wealth management investigations  recorded a  216% increase.

After  progressing  its  strategic change program,  ASIC says it is “now looking to use the full extent of new penalties and powers”.

ASIC had previously come under fire over its handling of poor conduct  at  major banks and other financial services firms, particularly over the regulator’s apparent preference for negotiated agreements over public denunciation and punishment for wrongdoing.

The regulator says it has since established  the Office of Enforcement to carry out key enforcement  activities, including ASIC’s new “Why not litigate?” policy.

ASIC’s latest annual report said it has “enhanced key aspects of its supervisory approach” as part of the response to widespread conduct failures.

“The Close and Continuous Monitoring program and Corporate Governance Taskforce aim to promote permanent cultural and behavioural change in financial firms and across the financial services market,” the report from ASIC said.

The Australian Prudential Regulation Authority (APRA)  also released its annual report, revealing it supervises institutions holding about $6.8 trillion in assets for bank depositors, superannuation members and insurance policyholders.

APRA says it  is "delving more deeply into so-called non-financial risks such as culture, remuneration and governance”.

This month, APRA announced it has  created a separate insurance division to be led by Brandon Khoo as part of a  structural  shake-up following the Hayne royal commission. The reforms created six divisions that report to the executive board.

Further appointments to the new organisational structure, which takes effect from December 1,  are to  be announced.  Insurance supervision is currently split between the Diversified Institutions Division and the Specialised Institutions Division.