Corporate cops will be on the beat in local bank branches and head offices to keep the financial sector in check following revelations from the banking royal commission.
Treasurer Scott Morrison has earmarked an extra $70 million for the Australian Securities and Investments Commission initiative, to be funded out of fees the banks pay for regulation.
The corporate watchdog will have regulatory enforcement staff working from head office to branch level to prevent breaches from happening and crack down on those who do the wrong thing.
Mr Morrison said the scheme, part of a suite of initiatives pushed by new ASIC chairman James Shipton, was about putting the regulator in the community they’re regulating.
“You’ve got to have that rapport, that relationship, that engagement, that connection to have effective enforcement,” he said.
“The best cops are the ones that prevent crime from happening in the first place, not just dealing with it once it’s occurred.
Financial Services Minister Kelly O’Dwyer with ASIC chairman James Shipton.
AAP
He says he’s open-minded on whether the initiative could be expanded to other sectors.
The change comes after the financial services royal commission uncovered widespread issues with compliance and governance.
Mr Shipton will have oversight of the process, including how many regulatory officers are appointed and what their focus will be.
Mr Morrison said the banks and financial services companies were on board with the changes.
“They want these things to be fixed too,” he earlier told 3AW radio.
Labor’s financial services spokeswoman Clare O’Neil said she hoped the initiative would improve ASIC’s enforcement capabilities.
But she said for Australians whose stories of being ripped off had been heard by the royal commission the announcement was too late.
Greens leader Richard Di Natale said ASIC embedding staff in the past had fostered a toxic relationship between the banks and the regulator.
He claimed when 41 staff were brought into institutions between 2009 and 2014 banks “got away with some of the worst episodes of misconduct ever seen”.
He called for wide-ranging and deep reform instead.
