ASIC funding for financial advice reforms

As part of the Federal Budget ASIC will receive funding of $101.9 million over four years “to ensure that it is appropriately resourced to continue its strong, proactive and consultative oversight of Australia’s financial markets, including surveillance, guidance and education, and the prosecution of breaches of the corporations law” according to Treasury ministers.

This measure will support ASIC in further improving investor protection, the integrity of our financial markets, and Australia’s competitiveness as a global financial centre.

The Enhanced Market Supervision measure provides ASIC with further funding of $43.7 million over four years to replace its real-time integrated market surveillance system and enhance ASIC’s market surveillance and supervision systems and tools.  This will enable ASIC to continue to perform its market supervision functions effectively and efficiently, to ensure a level playing field for all investors.

ASIC will also receive $23.9 million over four years to facilitate the implementation and enforcement of the Future of Financial Advice reforms. These reforms significantly increase the level of protection for retail investors that seek financial advice on how to invest their hard-earned savings and will require ASIC to increase the intensity and scope of its regulatory activities.

In addition to enhancing the protection for consumers that seek financial advice, the financial services industry will benefit from this funding as it will enable ASIC to provide regulatory guidance about the reforms and also implement a streamlined system for applying for an Australian Financial Services Licence.

ASIC will further receive $10.7 million over four years to develop and maintain an online registration system for auditors of self managed superannuation funds (SMSFs). As part of the registration process, ASIC will develop a competency exam and be responsible for the deregistration of non-compliant auditors.

Auditors play a crucial role in the regulation of the SMSF section and it is necessary that they have a high standard of competency. Auditor registration aims to raise the standard of SMSF auditor competency and ensure there are minimum standards across the sector.

Strong regulation is critical to ensuring our financial system can continue to withstand any future adverse events and secure our resilience in the face of global uncertainty.