ASIC powers beefed up
The Hayne fallout continues, with the introduction into Parliament yesterday of a bill to give ASIC greater powers.
The Financial Sector Reform (Hayne Royal Commission - Stronger Regulators 2019 Measures) Bill 2019 harmonises ASIC's search warrant powers, improves the regulator's ability to access telecommunications information, strengthens its licensing powers and extends its banking powers to ban individuals from managing financial services businesses.
The bill draws on recommendations of the ASIC Enforcement Review Taskforce, which reported to government in 2017.
Search warrant powers: ASIC currently has a range of search warrant powers under different legislation but there are a number of "inconsistencies and deficiencies".
The warrant powers will be consolidated into the ASIC Act. Warrants will be provided for search and seizure of evidential material. Material seized will be available for criminal, civil and administrative proceedings.
Telecommunications information: ASIC is not currently an "interception agency" and cannot seek a warrant to intercept telecommunications for the purpose of investigating serious offences.
The new law would make it an intercept agency.
Licensing: The Financial System Inquiry identified gaps in the Australian financial services licensing and Australian credit licensing regimes, including limitations in ASIC's ability to: assess the suitability of entities that control and Australian financial services licence or Australian credit licence; consider previous conduct in other businesses; or impose conditions of firms to address concerns about misconduct.
Under the new law ASIC will have the power to refuse to grant a licence, based on a "fit and proper" test or if the applicant makes false or misleading statements in an application.
To grant a licence, ASIC will have to be satisfied that there is no reason to believe that the applicant is not a fit and proper person to provide the financial services covered by the licence.
Banning orders: ASIC has power to ban a person from providing a financial service or from engaging in credit activities but its existing banning powers do not authorise it to ban a person from controlling or managing a financial services or credit business.
Another deficiency that is being addressed is that the existing provisions "may not necessarily authorise ASIC to ban persons such as a director or senior manager of a financial services or credit business".