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Chapter 5 - The role of ASIC in ensuring the provision of appropriate fee
information
5.1
The Committee's fourth term of reference was the
role of ASIC in ensuring that bank, non-bank financial institution and
non-financial institution suppliers and operators of those facilities provide
appropriate fee information on electronic and telephone transaction banking.
5.2
The Committee isolated one main issue from this
term of reference. This was whether the codes of practice monitored by ASIC
should continue to be the main mechanism to ensure the provision of appropriate
fee disclosure, or whether there should be direct government intervention to
impose levels of disclosure.
5.3
The banks supported the present role of ASIC.
The Commonwealth Bank, for instance, advised that ASIC at present plays an
active role in relation to consumers and fee disclosure. In doing this ASIC
takes a consultative approach, working closely with industry to achieve the
required regulatory outcome, but being practical and realistic. ASIC has
sufficient powers to do this under its enabling Act, including the ability to
seek fines, injunctions or orders. The ASIC role in relation to the relevant
codes of practice is also appropriate, particularly in the present review of
the EFT Code of Conduct. The St George Bank emphasised that ASIC was the
appropriate forum for non-financial institution suppliers of electronic
transaction banking .
5.4
Consumer groups and individual consumers, on the
other hand, agreed generally that direct and immediate government legislative
intervention was necessary to ensure proper disclosure.
5.5
ASIC, as the financial services disclosure
regulator, described how it perceived its roles in relation to fees for
electronic and telephone banking, although it emphasised that these did not
extend to the actual level of fees. These roles are set out below:
- Enforcer of legislation: where legislation
addresses these matters ASIC should monitor the market place to ensure
compliance and to take enforcement action where appropriate.
- Contributor to the reform process: although ASIC
is not a policy maker it is uniquely well placed to contribute to reform
debates such as the present Committee inquiry. ASIC has expertise and
experience with disclosure issues and with self-regulation.
- Facilitator of self-regulation: where
self-regulation operates along functional rather than industry lines, as the
EFT Code does, there may also be a role for ASIC to facilitate self-regulatory
initiatives.
- Monitor of reforms: ASIC already monitors the
Payments Systems Codes and the EFT Code. If the present Committee inquiry
recommends reforms and these are adopted then ASIC should have the role and be
given the resources to monitor the changes and to report back to Parliament
after an appropriate time.
- Educator of consumers: the primary role of
educating consumers about fees is clearly with financial institutions, but ASIC
does use consumer education as one of its most important regulatory tools. ASIC
does not at present have express educational initiatives about fees and how to
compare them, but it may be appropriate to do this at some time in the future.
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