• Annette Spencer
• Gaye Simpson
• Brad Fox
• Gayle Cilfone
• Bruce Debenham
• Jennifer Diggle<
• Calvert Duffy
• Johanna Turner
• Christine McArthur
• Naomi Layton
• Dacian Moses
• Peter Wade
• Don Crellin
• Stephen Cavanagh
• Fiona Rowland
• Brian Salter
• Gabrielle Bouffler
• Cherie Feher

ASIC Chairman Greg Medcraft said ‘A peer review panel such as the FSCP will enhance the impact of ASIC’s administrative decisions because it draws upon the broad range of knowledge and experience of professionals in the financial services and credit industry. Our administrative decisions will benefit from the input of professionals who have a thorough understanding of current industry practices and standards.’

Thank you to all who expressed interest in the panel. We were delighted with the response from people in the market who are eager to assist ASIC with this very important initiative and the depth of experience and professionalism they represent.

The FSCP is a pool of industry participants that ASIC will draw upon when forming individual sitting panels. Each sitting panel will comprise two members from the FSCP and an ASIC staff member. The sitting panel will hold administrative hearings and decide whether to make banning orders against individuals for misconduct in providing financial services to retail clients or engaging in credit activities.

To support the FSCP, ASIC will release regulatory guidance which provides an overview of the FSCP and sets out the policies and procedures relevant to the operation of the panel.

Background

On 11 April 2017, ASIC released Consultation Paper 281, Financial Services Panel (CP 281) on a proposal to establish a panel. ASIC sought feedback on the optimal composition of a sitting panel, the type of matters the panel would consider, and the regulatory and financial impact of the panel. Consultation closed on 23 May 2017.

ASIC received responses from industry bodies, banks, consumer groups and other interested parties. Most respondents supported ASIC’s proposal to establish the panel.

ASIC called for expressions of interest which closed on 14 September 2017.

[Release amended 13 November 2017 by adding ‘Cherie Feher’ to list of members.]

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The Information Sharing Co-operation Agreement further underlines the significance of the broader Australia-China trade and investment relationship. China is Australia’s largest two-way trading partner in goods and services (valued at $155.2 billion in 2016, up 3.7 per cent on the previous year). China is also our largest export market ($93 billion in 2016) and our largest source of imports ($62.1 billion in 2016).

China is a world leader in financial technology (‘fintech’) investment, development and adoption, particularly in customer-facing areas like payments and lending. In 2016, total investment in Chinese fintech ventures is estimated to have been US$10 billion (approximately A$13 billion). As a further indication of the size of the market, digital payments transacted in China made up almost half the total global volume.

Signing the Agreement, ASIC Chairman Greg Medcraft said, ‘Co-operation between regulators is essential to realise the benefits of the technological revolution. Understanding new developments and their impact in overseas markets helps us to remain proactive and forward-looking in our domestic approach. This Agreement represents an exciting opportunity for us to learn more about the Chinese fintech sector, which is renowned for its success and dynamism. We also look forward to sharing our insights and experiences on regtech with the CSRC.’

Shiyu Liu, CSRC Chairman said, ‘In the past few years, the rapid development of fintech has created ample opportunities to introduce new financial services, enhance financial inclusion and fulfill investors’ needs. However, financial market regulators around the globe also face new requirements and challenges posed by market innovations. The Agreement between CSRC and ASIC will provide an effective channel for timely exchange of information on fintech developments and regulatory issues, and enhance regulatory cooperation between the two authorities.’’

The Agreement provides a framework for information sharing between the two regulators on emerging market trends and developments, as well as regulatory developments pertaining to innovation in financial services. This will enable the CSRC and ASIC to keep abreast of fintech activity in each other’s jurisdictions, and help to inform domestic regulatory approaches in the context of a rapidly changing global financial environment.

In recognition of the importance of regulators keeping pace with the fintech industry, the Agreement also specifically provides that the CSRC and ASIC will collaborate through sharing information on regulatory technology (‘regtech’) trials.

Download the Information Sharing Co-operation Agreement

Background

The CSRC is a ministerial-level public institution directly under the State Council. As one of China’s financial sector regulators, the CSRC’s remit is over the securities and futures market of China. The CSRC is responsible for maintaining orderly function, and ensuring legal operation of the capital market. This includes policy development, supervision, and investigation and enforcement activities.

ASIC is focused on the vital role that fintechs are playing in re-fashioning financial services and capital markets. In addition to developing guidance about how these new developments fit into our regulatory framework, in 2015, ASIC launched its Innovation Hub to help fintechs navigate the regulatory framework without compromising investor and financial consumer trust and confidence.

The Innovation Hub provides the opportunity for entrepreneurs to understand how regulation might impact on them. It is also helping ASIC to monitor and understand fintech developments. ASIC collaborates closely with other regulators to understand developments, and to help entrepreneurs expand their target markets into other jurisdictions.

To date, fintech referral and information-sharing agreements have been entered with the Monetary Authority of Singapore, the United Kingdom’s Financial Conduct Authority, Ontario Securities Commission, Hong Kong Securities and Futures Commission, the Japan Financial Services Agency, Malaysia Securities Commission, Abu Dhabi Financial Services Regulatory Authority, and the Financial Market Supervisory Authority, Switzerland. In addition, information-sharing agreements have been signed with the Capital Markets Authority, Kenya and Otoritas Jasa Keuangan, Indonesia.

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The FSC recognises the important work ASIC carries out to promote consumer confidence in Australia’s financial system, and believes Mr Shipton is well-placed to lead the regulator through the next phase of that journey.

FSC CEO Sally Loane said: “The FSC has a long-term and sound relationship with ASIC, which is one of the strongest regulatory regimes in the world. We look forward to continued and positive engagement focused on both maintaining and strengthening
community trust and confidence in financial services.”

The FSC also takes the opportunity to thank outgoing Chairman Mr Greg Medcraft for his significant contribution to improving consumer outcomes and industry engagement during his time at ASIC, and wishes him well in the future.

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ASIC’s data strategy outlines a number of data initiatives that have been completed or will be put in place over the next three years, including:

• creating a Chief Data Office
• establishing a number of frameworks and bodies aimed at strengthening data governance
• ensuring cyber resilience and privacy protection
• establishing a data science laboratory, and
• engaging nationally and internationally to improve data management and analytics capabilities.

In launching the strategy, ASIC Chairman Greg Medcraft said that good quality, well-governed data was a key foundation for good regulatory decision making.

‘Our data strategy outlines how ASIC will improve the way we capture, share and use data. The intelligence and insights we derive from analysing our data will give us a better understanding of the regulatory environment, so that we can detect, understand, respond appropriately and ultimately, contribute to the financial well-being of all Australians.’

The strategy is part of the ‘One ASIC’ approach, which is aimed at utilising data to connect the dots to achieve better regulatory outcomes through people, processes, technology and culture and governance.

Read ASIC’s data strategy

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We will draw on these members who, with an ASIC staff member, will consider making banning orders against individuals for misconduct in the provision of financial services to retail investors or in consumer credit activities.

We are looking for individuals with relevant experience in the financial services or consumer credit industries who want to contribute to standard setting in their industries. While banning decisions need to be made in accordance with the law, we expect industry participants will bring a range of experiences and perspectives to the banning decision process and will help to ensure ASIC’s administrative decisions are based on a thorough understanding of current industry practices and standards.

ASIC Chairman Greg Medcraft said, ‘I encourage financial services and consumer credit industry participants to express interest in becoming members of the Financial Services and Credit Panel. This is an opportunity for industry to contribute to a peer-review model, and work with ASIC to enhance the reach and impact of its decisions.’

Applications close at 10am (AEST) on 31 August 2017.

How to apply for the panel.

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This Agreement expands ASIC’s fintech cooperation network to a dynamic region with enormous potential. The Middle East and North Africa (MENA) are currently poised for a fintech boom, with several cities taking steps to establish themselves as fintech hubs. To date, most fintech activity has occurred in the payments space, with startups offering services including bill payment, electronic wallets, mobile and online payment solutions.

The United Arab Emirates (where the ADGM is located) is Australia’s largest trading partner in the Middle East, with two-way goods and services trade worth $8.8 billion in 2015.

Similar to the other fintech cooperation agreements ASIC has entered into, this Agreement will enable the FSRA and ASIC to refer innovative fintech businesses to each other for advice and support via ASIC’s Innovation Hub and its ADGM equivalent, the Regulatory Laboratory known as ‘RegLab’.

The Agreement also provides a framework for information sharing between the two regulators. This will enable ASIC to keep abreast of regulatory and relevant economic or commercial developments in the ADGM and to use this to inform Australia’s regulatory approach.

The Innovation Hub and RegLab offer assistance to innovative fintech businesses to understand the regulatory regimes in each of their jurisdictions. This Agreement means Australian fintech businesses wishing to operate in the ADGM will now have a simple pathway for engaging with FSRA, and vice versa.

Signing the Agreement, ASIC Chairman Greg Medcraft said, ‘Fintech developments are not confined by national borders. Each country and region has a different experience with fintech, and there is much we can learn from engaging with one another. This Agreement will help to connect Australian fintech businesses with a range of exciting opportunities in a region ripe for further development.’

Richard Teng, Chief Executive Officer of ADGM FSRA said, ‘We are pleased to partner ASIC and share the common interest in fostering an inclusive international fintech hub that supports innovation in a safe regulatory environment. In MENA, the opportunities and potential for fintech to advance financial inclusion, economic benefits and growth are enormous. With this fintech collaboration, ADGM and ASIC are able to tap on the strengths and network of each other’s markets to support technology startups and innovators in advancing their creative solutions into new markets. I look forward to our partnership with ASIC and other global authorities to advocate robust financial integration and regulatory collaboration.’

This is the seventh fintech referral agreement ASIC has entered into, following on from agreements with the United Kingdom, Singapore, Ontario, Hong Kong, Japan and Malaysia.

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Effective from 1 July 2017, ASIC’s regulatory costs will be recovered from all industry sectors regulated by ASIC through annual levies.

ASIC Chairman Greg Medcraft welcomed the legislation’s passage, and highlighted the fact it enjoyed widespread support across the political spectrum.

‘This is an important milestone not just for ASIC, but also for the companies and wider corporate sector that we regulate,’ he said.

‘Industry funding, in one form or another, applies to other areas of public oversight in Australia and in many comparable economies around the world. Not only will the different elements of the broad business sector more fairly share the load, but the taxpaying public will benefit through the more accountable use of the funds provided for the task.

‘Australia already has an admired system of corporate regulation supported by rule of law. These new funding arrangements will help ensure that remains the case.’

Background

The industry-funding model, initiated by the Federal Government in April 2016 and subject to extensive stakeholder consultation, was designed to provide greater stability and certainty in ASIC’s funding to ensure sufficient resources to carry out its regulatory mandate.

Under the new arrangements, those who create the need for and benefit from regulation will bear the costs, introducing an economic incentive to drive the desired regulatory outcomes for the financial system.

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The Panel would add a strong element of peer review to ASIC’s administrative decision making processes.

ASIC Chairman Greg Medcraft said, ‘ASIC’s aim in establishing a Panel is to enhance the impact of ASIC’s administrative decisions. The significance of being judged by peers cannot be underestimated. Peer review panels are a form of co-regulation in Australia and overseas.

‘The Panel will also bring broader experiences and perspectives into ASIC’s decision making and ensure decisions reflect current industry practices and standards’.

ASIC is proposing that the Panel would be responsible for determining whether ASIC should ban individuals from the financial services and credit industries for misconduct. We would select matters and refer them to the Panel where they are significant, complex or novel. Over time, we may expand the range of matters on which the Panel will make decisions.

The Panel would comprise financial services and credit industry participants and non-industry participants (e.g. lawyers or academics) with relevant expertise, and at least one ASIC staff member. The Panel would sit alongside ASIC’s existing administrative structures and processes.

ASIC will be consulting on:

• how the Panel would enhance the impact of ASIC’s administrative decisions;
• the types of matters that would be referred to the Panel; and
• the optimal composition of the Panel.

Submissions on Consultation Paper 281 Financial Services Panel (CP 281) are due by 23 May 2017.

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The Hon Kelly O’Dwyer MP

The Minister for Revenue and Financial Services, the Hon. Kelly O’Dwyer MP yesterday launched the National Financial Literacy Strategy Annual Highlights Report 2015-16 at an event at Parliament House in Canberra.

Speaking at the event, Minister O’Dwyer highlighted the Australian Government’s commitment to supporting Australians’ financial literacy skills. ‘Financial literacy helps not only with improving living standards but also ensures a more effective financial services industry. With an ever wider range of financial products and financial services being made available to consumers, financial literacy empowers individuals so that they can master the complexities of decision-making around these products – and they can take full advantage of the benefits that flow from financial innovation,’ said Ms O’Dwyer.

The Annual Report paints a national picture of financial literacy programs and initiatives delivered by a wide range of organisations across the government, education, industry and community sectors in support of the National Financial Literacy Strategy, led and coordinated by ASIC. Many of these were delivered through partnerships and together they assisted over 700,000 people through targeted financial literacy activities.

ASIC Chairman Greg Medcraft emphasised the importance of these programs, including ASIC’s own financial capability program, in supporting better financial outcomes for Australian consumers.

‘It is encouraging to see many of the projects use a grass-roots approach to provide support where it is most needed, particularly with consumers who may be vulnerable.  With this in mind, ASIC provides tailored resources for priority audiences including Indigenous Australians, women and CALD communities,’ said Mr Medcraft.

Mr Medcraft said he was proud of ASIC’s MoneySmart service, which offers free trusted and impartial financial guidance and tools to help Australians manage life’s different financial decisions and attracted over 6 million visits in 2015-16.

‘ASIC’s MoneySmart is our dedicated service to support and assist Australians with all aspects of their finances, whether it be managing the weekly budget, saving up for – and then paying off – a home, getting the right insurance in case of disaster, or planning to have enough in retirement,’ he said.

Also speaking at the event, Paul Clitheroe AM, Chairman of the Australian Government Financial Literacy Board said, ‘I am extremely proud of the rich and diverse range of programs to support the financial capability of Australians and the progress that has been made to date.’

‘Building financial capability is a long term journey, led by ASIC on behalf of the Australian Government, to effect real change for the Australian community,’ said Mr Clitheroe.

Download the National Financial Literacy Strategy Annual Highlights Report 2015-16 at financialliteracy.gov.au

Background

ASIC is the Australian Government agency responsible for financial literacy, consistent with its strategic priority to promote confidence and trust in the financial system.  Financial literacy is about having the knowledge, skills, attitudes and behaviours to make good financial decisions. It is part of ASIC’s strategic priority to promote consumer trust and confidence in the financial system.

ASIC’s MoneySmart website provides impartial and trusted financial guidance and tools to support informed financial decision-making for all Australians.

ASIC leads and coordinates the National Financial Literacy Strategy, which sets out a national framework for financial literacy work in Australia. The Strategy highlights the importance of providing people with tailored resources and tools, and of responding to the financial issues facing vulnerable sectors of the community.

The five priorities set out in the National Strategy are:

1. Educate the next generation, particularly through the formal education system;
2. Increase the use of free, impartial information, tools and resources;
3. Provide quality targeted guidance and support;
4. Strengthen co-ordination and effective partnerships; and
5. Improve research, measurement and evaluation.

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First Business was developed by ASIC in collaboration with the Australian Taxation Office, to assist young people considering going into business for themselves. The mobile app provides practical tips, checklists, case studies and links to additional information relating to developing and running a small business.

‘ASIC’s vision is to allow markets to fund the real economy and economic growth. Small businesses play an essential role in this and account for around 45% of employment and 35% of output nationally,’ [1] said Mr Medcraft.

‘We also know that a large number of new sole trader and micro-businesses are started by young adults. A lack of business knowledge, experience and planning are some of the challenges they face when starting out.’

‘For its part, ASIC wants to support young people to be successful in business by providing access to tools and resources to build their financial capability and help them with the financial decisions they’ll need to make,’ he said.

The key features of the new mobile app include:

• a business health check to help young people decide if they are ready to start a business;
• a starting your business checklist to assist with ongoing obligations, including registrations, licences, tax and super responsibilities and legal requirements;
• business case studies including advice on what can go wrong and how to avoid this; and
• a networking section with tips and ideas on how to develop your business network.

ASIC’s First Business app is available now on the App Store and Google Play.

The mobile app will be promoted online and shared with external stakeholders, including the education sector.

Background

ASIC is the Australian Government agency responsible for financial literacy, consistent with its strategic priority to promote confidence and trust in the financial system.  Financial literacy is about having the knowledge, skills, attitudes and behaviours to make good financial decisions. It is part of ASIC’s strategic priority to promote consumer trust and confidence in the financial system.

ASIC leads and coordinates the National Financial Literacy Strategy, which sets out a national framework for financial literacy work in Australia. The Strategy highlights the importance of providing people with tailored resources and tools, and of responding to the financial issues facing vulnerable sectors of the community.  People experiencing high financial stress and crisis are identified as one of a number of priority audiences in the National Strategy.

ASIC’s MoneySmart website provides impartial and trusted financial guidance and tools to support informed financial decision-making for all Australians.

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