Will integrity and protection be lost?
As part of the Federal Governments plan to reduce costs and lower the country’s foreign debt our country’s corporate regulator, Australian Securities and Investments Commission (ASIC), has been caught in the cross fire.
The budget includes a reduction of $120 million in funding for ASIC over four years.
ASIC Chairman, Mr Greg Medcraft, released a statement on 4 June 2014 stating that around 12% of the operating budget will be cut in the 2014-15 year, which will require a number of cost saving measures to be implemented including a reduction of average staffing levels by 10%. This is a change from 1,782 to 1,573 employees.
ASIC Chairman went on to say….
“…some change is inevitable. In particular, our proactive surveillance will substantially reduce across the sectors we regulate, and in some cases stop.
For obvious reasons, we do not want to identify to the market the areas where we will not be conducting proactive surveillance.
We will rely more on the intelligence we get from misconduct reports and the complaints we receive.
We will limit our risk-based approach to focus on those entities or activities that have the greatest market impact.
Where we do find that someone has intentionally broken the law, we will continue to do the best we can to ensure that the consequences are severe.”
It is clear that with the funding cuts ASIC cannot perform the same quality of monitoring and surveillance and in certain market areas it will stop completely.
We believe that ASIC performs an integral part in the protection of stakeholders through corporate regulation, surveillance and enforcement. Only time will tell if the reduced funding is sufficient for ASIC to maintain the integrity of our market areas and the protection needed for all stakeholders involved.
To read ASIC Chairman’s full statement please see the following link: