Federal Treasurer Peter Costello has released a report from the Government’s expert advice group, the Financial Sector Advisory Council (FSAC), which criticises the amount of regulation of the financial services sector.

Since the introduction of the Financial Services Reform Act in March, there has been widespread criticism throughout the industry that the reforms impose too much regulation and that maintaining compliance is too expensive.

The report says unnecessary regulation of the financial sector, particularly prescriptive regulation, may come at the cost of hampering business investment opportunities in Australia and abroad.

Mr Costello said last week that the usual role of the FSAC is to provide confidential advice on appropriate policies for the financial sector, but he had decided to make the report public. Its contents echo much of the industry criticism since March.

The report says overlapping consumer protection roles have been a source of confusion to the industry. The overlap occurs between the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority, and between ASIC and the Australian Competition and Consumer Commission.

“Recent regulatory changes, while underlining the primary role of ASIC for consumer protection in the financial system, may have led to the roles of the other agencies becoming superceded to some extent. This issue requires further clarification.”