Appendix 2

Appendix 2 Answers to questions on notice to ASIC

ASIC oversight hearing, 21 March 2012

Question 1 (Hansard, p. 12)

Topic: Legal services direction and in-house counsel

CHAIR: It certainly seems you have been very busy. Thank you for your opening statement. Having copies of that will be helpful. There is some material to discuss there in general but can I launch into some questions about litigation. The committee expressed a preference for the Attorney-General to consider extending ASIC's exemption under the Legal Services Directions that allows ASIC greater access to in-house counsel. What is the current status of ASIC's exemption under the Legal Services Direction that allows you greater access to in-house counsel?

Ms Gibson: I will have to come back to you on the details, that we do have some exemption, I think it is to use external counsel or non in-house is the exception to brief out. We have a number of panels that operate. We need to seek approval to go over a certain level of fees. I cannot tell you what that level of fees is now.

Mr Medcraft: We can take that on notice. Obviously we do comply with the Legal Services Directions and we do report the various firms that work and how we use it internally. It is probably better that we take that on notice.

Response

Under Direction 5 of the Legal Services Directions, an FMA agency may only use an in‑house lawyer to conduct court litigation as solicitor on the record or as counsel with the approval of the Attorney‑General.

ASIC currently has an approval to allow it to use in-house lawyers to conduct court litigation and appear as solicitor on the record, or directly brief counsel to appear, in relation to its enforcement and regulatory functions. ASIC had had an approval to this effect in place since it became an FMA agency in July 2007. The current approval has a life of one year and is due to expire on 30 June 2012. An application for renewal of the approval has been submitted to the Attorney-General's Department.

ASIC's current approval is subject to a number of conditions, including :

periodic reporting to the Attorney-General's Department,
notification of any significant changes in ASIC"s structure for the delivery or management of its internal legal services, or lines of accountability, and
obligations to provide adequate training to ASIC lawyers.

Question 2 (Hansard pp 12–13)

CHAIR: This one will probably follow on, a bit of an outline of ASIC's internal and external costs over the past 12 months and a comparison with the 2010-11 financial year.

Mr Medcraft: Our legal costs.

CHAIR: Yes.

Response

No answer had been received when this report went to press.

Question 3 (Hansard pp 16–17)

Topic: ASIC and not-for-profit sector companies

Senator THISTLETHWAITE: I have just got two questions about the not-for-profit sector. Could you just outline the role that ASIC has in respect of regulation of the not-for-profit sector?

Mr Medcraft: Yes. John, would you like to touch on that?

Mr Price: ASIC has a fairly modest role in terms of the not-for-profit sector. The best example I can give in relation to that role is the regulation of companies limited by guarantee which may be providing not-for-profit type motives. However, when you look at the broader scope of all not-for-profits and the scope where ASIC may have direct regulatory responsibilities, it is actually very small. I have in my mind the figure of about four or five per cent that was in a report recently, but I will need to check that.

.......

Mr Medcraft: Basically, we cannot regulate 11,000 companies limited by a guarantee. This is obviously the most often used form for not-for-profit organisations and charities. As you know, the Australian Charities and Not-for-profits Commission is going to be established on 1 October. It will now go on to determine charitable status for all Commonwealth purposes. The legislation, as I understand, has not been finalised yet. I think the intention is that over time it will take over the regulation of all not-for-profit entities structured as companies limited by guarantee. I believe a general reporting framework will be established by 1 July 2013. It is expected, as I understand it, that we will retain responsibility for the incorporation of these companies limited by guarantee as charities but the commission will take over responsibility for the governance arrangements.

Senator BOYCE: For how long would you have responsibility for them?

Mr Medcraft: Ongoing for registration. My understanding is that it will be progressive, but the arrangements have not been finalised yet. Over time—

Senator BOYCE: Can you give us some more details on notice about the four to five per cent that Mr Price mentioned, including how many organisations and what sort of turnovers et cetera they would have?

Mr Medcraft: Sure.

Senator SHERRY: On that, could you give us something indicative? Presumably these would be larger charities. I am just not sure—

Senator BOYCE: Not necessarily.

Senator SHERRY: I am sure that is true, but I would be interested in an indication about whether we are dealing with what tend to be larger charities by size, or with microcharities—

Mr Day: Just as a caution, I do not know whether that would necessarily be evident from the information that is lodged with ASIC.

Response

There are 12,510 public companies limited by guarantee registered with ASIC. 10,434 are identified as not for profit companies.

ASIC role is to:

register them
maintain details (eg. changes of officeholder and address)
annual reviews (pay fee annually to ASIC)
some are required to lodge financial reports
search details on public register
related calls, enquiries, complaints, surveillance/deterrence

Question 4 (Hansard, p. 22)

Topic: Platform oversight overseas

Senator SHERRY: I understand why you are having a look at the area—platforms are a major feature of the financial landscape, not just here but around the world. What are the circumstances of platform oversight, licensing, regulation, elsewhere? For example, are they licensed in the UK and New Zealand, if we look at a couple of jurisdictions that are reasonably relevant to Australia? Do we know?

Mr Kell: We are happy to take that on notice.

Response

ASIC released Consultation Paper 176 Review of ASIC policy on platforms: Update to RG 148 on 13 March 2012. This paper sets out our proposals for reviewing our regulatory approach to platforms. Specifically, we propose to:

review our regulatory approach to platforms, given our initial guidance was issued in 2000 and has not been updated;
strengthen operating requirements for operators of investor directed portfolio services (IDPSs), ensuring they have adequate resources to conduct their financial services businesses, supported by appropriate corporate structures and compliance arrangements;
promote informed investor decision making about using platforms, including by requiring platform operators to disclose how they select financial products for inclusion on investment menus and setting out our expectation that advisers will consider investment selection processes when recommending use of a platform; and
enhance investor rights when they invest through platforms so that platform clients are entitled to the same rights for investments through platforms as if they had invested directly.
Submissions in response to this paper closed on 20 April 2012 and ASIC has commenced its review of these.

ASIC does not intend to change its position that platform operators will be required to hold an Australian financial services licence with tailored platform-specific conditions.

Noting that different jurisdictions characterise 'platforms' differently, which impacts on the approach (if any) taken to their oversight, ASIC draws attention to the following developments regarding regulation of 'platforms' in the United Kingdom and New Zealand:

In August 2011, the United Kingdom's Financial Services Authority released its rules on platforms regulation following a review of this area in the context of its Retail Distribution Review. Its final policy, which covers platforms oversight and regulation, is available at: http://www.fsa.gov.uk/library/communication/pr/2011/067.shtml (note that the United Kingdom does not treat platforms as collective investment schemes);

and

In New Zealand, platforms and their providers are regulated by the Financial Market Regulator (http://www.fma.govt.nz/). The FMR's regulatory role is similar to that of ASIC in Australia. This website page describes their role and purpose in New Zealand http://www.fma.govt.nz/about-us/who-we-are/role-and-purpose/

Question 5 (Hansard p. 22)

Topic: Platform and administration entities

Senator SHERRY: [...] Given your interest in platforms, and administration entities are somewhat similar, and given their critical importance to obviously robustness and operation et cetera in the superannuation area particularly but in other areas, have you given any consideration to an examination of that area?

Mr Price: I cannot answer that question off the top of my head now but I am happy to take it on notice

Response

Administrators only require an Australian financial services licence (AFSL) where they provide financial services. The administration performed by those that do not have an AFSL do not fall directly within ASIC's jurisdiction.

The Australian Prudential Regulation Authority (APRA) has look through access to superannuation administrators through the outsourcing contract between the APRA-regulated trustee and their administrator, which requires the administrator to provide APRA access to their business. Superannuation trustees remain responsible for their fund's administration, even where that function is outsourced.

Responsible entities also remain directly responsible for the administration of managed funds, even where the administration function is outsourced. As part of ASIC's supervision of responsible entities, we monitor outsourcing arrangements and expect that they have adequate monitoring of their service providers, including administrators. Adequate monitoring would typically include regular reporting and independent review of the providers.

ASIC monitors and considers all breaches and complaints relating to the administration of an entity or function that falls within our jurisdiction, such as the administration of a managed fund or super fund. In these circumstances, ASIC may engage with both the superannuation fund trustee or responsible entity, as well as the administrator of the relevant fund, as required.

Question 6 (Hansard p. 23)

Topic: Procedures for a change of responsible entity

Mr FLETCHER: Is it the case that there is a requirement under the law for there to be a meeting of investors and a vote in favour of a change in the responsible entity?

Mr Price: In some cases, yes. Actually, I would prefer to take that question on notice. I think that is a fairly technical question.

Response

Where a responsible entity of a registered managed investment scheme (MIS) can change

A change in the responsible entity of a registered MIS is complex and may occur because:

the responsible entity wishes to resign - s601FL of the Corporations Act 2001.
the members have called a meeting and voted to remove and replace the responsible entity - s601FM
the responsible entity has ceased to meet the requirements of s601FA and ASIC or a member has made application to the Court for the responsible entity to be replaced – s601FN
ASIC or a member has made application to the Court to have a temporary responsible entity appointed to protect scheme property or the interests of members of the scheme - r5C.1.02 of the Corporations Regulations 2001.

Resignation

Where the responsible entity wishes to resign, the procedure for retiring is set out in s601FL. Essentially, the procedure is that if the retiring responsible entity has chosen a successor that meets the requirements of s601FA and that has consented to act as responsible entity for the MIS, the responsible entity must call a meeting of members to “explain its reasons for wanting to retire” and to allow members to “vote on a resolution to choose a company to be the new responsible entity”. Case law provides that there is no requirement that the notice calling the meeting must itself explain the responsible entity’s reason or reasons for wanting to retire; that explanation may wait for the meeting: ASIC v Wellington Investment Management Ltd [2008] QSC 243.

The resolution must be an extraordinary resolution if the MIS is unlisted, but need only be an ordinary resolution if the MIS is listed on ASX. An extraordinary resolution is a resolution that must be passed by at least 50% of the total votes that may be cast by members entitled to vote on the resolution (including members who are not present either in person or by proxy).

Responsible entities may apply to ASIC for relief from the obligation to hold a meeting to resign. ASIC considers each application for relief it receives on its individual merits. In considering whether the relief should be granted, ASIC generally weighs up a range of factors, including the costs of compliance and the potential disadvantages for investors.

ASIC has previously exercised its discretionary powers to grant relief where:

the retiring responsible entity and the proposed responsible entity are members of the same corporate group and as such the change will be unlikely to have a significant adverse impact on the administrative, custodial, asset management or operation of the syndicate; and
there are significant costs associated with holding a members' meeting which members indirectly bear if the retiring responsible entity is required to hold a meeting in circumstances where the practical change to the MIS is minimal. The retiring responsible entity has a right to indemnify itself from the assets of the MIS for all costs incurred in arranging and holding the members' meeting.

However, the responsible entity is still required to undertake a procedure to effect its retirement and the appointment of a new responsible entity under the instrument of relief. This type of relief requires the retiring responsible entity to advise members by notice of its intention to resign and the intended appointment of the proposed responsible entity. If a sufficient number of members believe a vote should occur on the resolution to choose a new responsible entity and advise the retiring responsible entity of this, it is required to arrange for a postal vote or convene a meeting to allow members to vote on the resolution to appoint the proposed responsible entity.

Removal

Members of an MIS are empowered to remove the responsible entity under s601FM or under provisions of the constitution.

If the members initiating the action nominate a replacement responsible entity that meets the requirements of s601FA and that has consented to act as responsible entity for the MIS, those members may call a meeting to consider and vote on the resolution to remove the responsible entity and a separate resolution approving the new responsible entity. However, in order to call such a meeting, there must be a written request to the responsible entity signed by members with at least 5%of the votes that may be cast on the resolution or at least 100 members who are entitled to vote on the resolution . The request for a meeting may be accompanied by a statement from the members, which the responsible entity must distribute if it meets certain criteria.

Again, the resolution must be an extraordinary resolution if the MIS is unlisted, but need only be an ordinary resolution if the MIS is listed on ASX

If the MIS ceases to have a responsible entity that meets the requirements of s601FA, a member or ASIC may apply to the Court for the appointment of a temporary responsible entity under s601FN. This will occur if the responsible entity is deregistered or changes type and ceases to be a public company, or if it loses its operating Australian financial services licence.

Alternatively, ASIC or a member may apply to the Court for the appointment of a temporary responsible entity if they reasonably believe that the appointment is necessary to protect scheme property or the interests of members of the MIS under r5C.1.02.

Question 7 (Hansard p. 23)

Topic: Change in responsible entity and ongoing liability

Mr FLETCHER: What is the consequence of a change in responsible entity for a party that may be wanting to take action against the previous responsible entity?

Mr Price: My recollection is that the liabilities of the previous responsible entity remain in place up until the time that they are replaced. But again, I would like to check that.

Response

The consequences depend on whether the party wishes to sue the former responsible entity in its capacity as the former responsible entity of the registered managed investment scheme (MIS) or in its own right.

Generally, a responsible entity will be sued in its capacity as the responsible entity of an MIS.

In its capacity as the responsible entity of the registered MIS

On a change of responsible entity of an MIS, the rights and liabilities of the old responsible entity in relation to the MIS generally become rights and liabilities of the new responsible entity under s601FS of the Corporations Act 2001. This means that a party could generally sue the new responsible entity in its capacity as the responsible entity of the MIS, even if the debt accrued prior to the change of responsible entity.

However, the following rights and indemnities do not transfer to the new responsible entity.

the former responsible entity’s right to fees for functions performed before the changeover – s601FS(2)(a)
the former responsible entity’s right to recover expenses incurred before the changeover -s601FS(2)(b)
former responsible entity’s rights, obligations and liabilities as a member of the MIS - s601FS(2)(c)
any liability for which the responsible entity could not be indemnified out of scheme property if it had remained as responsible entity - s601FS(2)(d)

These liabilities remain with the old responsible entity.

What is a liability in respect of which the old responsible entity could not have been indemnified is a complex legal question, but in general terms it is likely to include a liability for improper conduct. The aim of this provision is to enable the new responsible entity to readily take over the operation of the MIS while leaving the old responsible entity liable to members and creditors in relation to any conduct of that kind. Case law provides that the effect of this provision in relation to a debt entered into by the old responsible entity is that a creditor would not know whether it should sue the former responsible entity or the new responsible entity for its debt, unless it could determine whether the former responsible entity was entitled to an indemnity - Re Stacks Managed Investments Ltd (2005) 23 ACLC 1,647.

In its own right

It is always open to members or creditors to sue a responsible entity in its own capacity if a suitable cause of action exists. Whether a responsible entity will be liable will be a matter for the Courts to determine. This is the same irrespective of whether there is a change of responsible entity.

If a member or creditor decides to sue a former responsible entity in its own capacity, its solicitors should generally undertake an investigation about its ability to satisfy a decision against it prior to commencing the litigation. This is because the financial position of each individual responsible entity will vary.

A change of responsible entity could impact on the financial position of a responsible entity, however, this will not always be the case.

Question 8 (Hansard pp 23–24)

Topic: Notification to members of relief in case of change in responsible entity

Mr FLETCHER: One of the things I am interested in is whether, if an application is made—as I understand was the case with Centro—for a change of responsible entity, and the result of the relief being granted is that there is no need to go to an investors meeting, that at least theoretically impacts on the rights that would be available to investors; for example, to take action against a previous responsible entity. My question therefore is: is notice given to members that the responsible entity has sought this relief?

Mr Price: Again we have a regulatory guide that deals with natural justice, and you will need to forgive me but I cannot recall the exact number of that regulatory guide.

Mr FLETCHER: Take it on notice.

Response

Yes. If ASIC grants relief from the requirement in s601FL of the Corporations Act 2001 to hold a members' meeting, a condition of that relief requires that the responsible entity send a notice to members of its intention to resign and the intended appointment of the proposed responsible entity.

The notice to members must set out:

(1) the responsible entity's reasons for wanting to retire;

(2) information about the timing of the retirement and the manner in which that retirement must occur and where to obtain updates on this information;

(3) information that is material to a member in forming a view as to the choice of the proposed responsible entity;

(4) a statement that:

(a) if members who together hold at least 5% of the total value of the interests held by members or 100 members who would be entitled to vote if the proposal were put as a proposed resolution to a meeting, ask for a vote by giving written notice, the responsible entity will either arrange a postal vote or convene a meeting to vote on a resolution for the choice of the proposed responsible entity; and

(b) a reply paid address of the responsible entity to which the form may be sent.

The notice must also be accompanied by a form which can be ticked to ask for a vote; and

There is no similar requirement in s601FL for the notice sent to members calling a meeting to contain such content. In addition, case law provides that there is no requirement that the notice calling the meeting must itself explain the responsible entity’s reason or reasons for wanting to retire; that explanation may wait for the meeting: ASIC v Wellington Investment Management Ltd [2008] QSC 243.

Question 9 (Hansard, p. 24)

Topic: Interests of members of managed investment schemes in granting relief

Mr FLETCHER: Can I ask you to take on notice the question of whether—either in the specific instance of Centro, as reported in the press, or more generally—the practice that ASIC has of granting relief properly takes account of the interests of members of a managed investment scheme.

Mr Price: I am happy to take that on notice, but I would certainly suggest that third parties would have rights to challenge any ASIC decision if it did not take into account what is a relevant factor in making an administrative decision.

Response

ASIC considers each application for relief it receives on its individual merits.

In considering whether relief from the requirement in s601FL of the Corporations Act 2001 to hold a members' meeting for the responsible entity to retire and be replaced with new responsible entity should be granted, ASIC weighs up a range of factors. These included the costs of compliance, commercial benefits for the responsible entity, the policy behind s601FL and the potential disadvantages for members of the MIS.

There are significant costs associated with holding a members' meeting which members indirectly bear if the retiring responsible entity is required to hold a meeting in circumstances where the practical change to the MIS is minimal. The retiring responsible entity has a right to indemnify itself from the assets of the MIS for all costs incurred in arranging and holding the members' meeting. In these circumstances, ASIC often considers that, on balance, it is in the interests of members of the MIS to avoid the significant costs associated holding such a meeting.

ASIC always tries to reduce or eliminate the impact of a decision on third parties by imposing suitable conditions on the relief granted or by narrowly confining the scope of the relief. In the case of relief granted from s601FL, ASIC imposes a condition on the relief that requires the retiring responsible entity to advise members by notice of its intention to resign and the intended appointment of the proposed responsible entity. If a sufficient number of members believe a vote should occur on the resolution to choose a new responsible entity and advise the retiring responsible entity of this, it is required to arrange for a postal vote or convene a meeting to allow members to vote on the resolution to appoint the proposed responsible entity.

ASIC is required to afford procedural fairness to third parties who may be affected by a decision. Who is affected by a decision is a complex legal question that will depend on the circumstances surrounding the decision being made and how it affects the third party. A member of an MIS would not automatically be a person affected by a decision made by ASIC.

Even if ASIC determines people are affected by its decision, it does not necessarily have to consult with every person who may be affected by its decision and be entitled to receive notification of the decision once it has been made. ASIC would not generally consult with all of the members of an MIS in making a decision in response to an application for relief, as this would be impractical.

If the interests of a member of the MIS are affected or aggrieved by ASIC's decision, they may also have standing to challenge ASIC's decision in the Administrative Appeals Tribunal or Federal Court (respectively). Again, the issue of whether a member would have standing is a complex legal question that will depend on the circumstances surrounding ASIC's decision and how it affects the member. This question would be determined by the AAT or the Federal Court if a member was to make an application for review of ASIC's decision.

Question 10 (Hansard p. 24)

Topic: Contact address of Mr Maher (Gresham)

Mr FLETCHER: It has been put to me that there ought to be a public examination of Mr Maher but that a logistical difficulty is that the liquidators are unable to obtain his address. Is Mr Maher's address in the possession of ASIC and are you willing to provide it to the liquidators?

Mr Price: I will take that on notice.

Response

Mr Maher has provided a contact address to ASIC. He provided this information to ASIC on a confidential basis. There are statutory restrictions on ASIC giving out information provided to it in connection with the performance of its functions.

In the absence of consent or a legally enforceable demand it is not open to ASIC to give the liquidator Mr Maher's address. Mr Maher has declined to provide that consent. ASIC also recommended to Mr Maher that he approach the liquidator to discuss the issue.

Question 11 (Hansard p. 25)

Topic: Recovery of money

Mr FLETCHER: Given that investors have lost tens of millions of dollars, as we all know, and given that a problem with this case or this affair appears to be that everybody who might reasonably be expected to have funds against which action could be pursued turns out to have empty pockets or not to be in the jurisdiction, in the course of securing an enforceable undertaking from Mr Maher, formerly Mr Gresham, did ASIC give consideration to the issue of assets held by him and whether you could put your foot on them so that they did not mysteriously disappear from the jurisdiction?

Mr Day: I think that is the question we would take on notice.

Mr Medcraft: However, I just need to establish whether it is something we can comment on.

Mr FLETCHER: I understand.

Response

On information currently available to ASIC there appears to be little money available for recovery (under insurance policies or otherwise) from any of the participants, financial advisers or other relevant persons associated with the ARP Growth Fund, including Mr Gresham. ASIC has therefore not sought an asset preservation order or otherwise commenced civil proceedings to recover damages on behalf of ARP Growth Fund investors.

ASIC has been liaising with the liquidator of Trio Capital Ltd with the view to possibly providing funding for the purposes of examining Mr Gresham with the view to (among other things) tracking the flow of funds from ARP Growth Fund.

Question 12 (Hansard p. 25)

Topic: Trust Company and PPPST

Mr FLETCHER: [...] I have another question that I would like to ask coming out of the enforceable undertaking. You refer in the enforceable undertaking to the fact that the trust company did not approve changes to the investment policy that were proposed back in 2004 when the trust company was the trustee of Professional Pensions PST. The trust company was subsequently removed as trustee of Professional Pensions PST. Did ASIC receive any notification from the trust company at that time that it had concerns about the investment policy being pursued by Professional Pensions PST?

Mr Medcraft: I will take that on notice.

Response

ASIC was not notified by Trust Company that it had concerns about the investment policy being pursued by Professional Pensions PST. APRA is the primary regulator of pooled superannuation trusts and ASIC is not aware whether Trust Company notified APRA.

Question 13 (Hansard p. 26)

Topic: Senate order files

Senator BOYCE: [...] Given that we are on time, I have one more question. You would be aware of an article on February 16 in the Age again by your close friend, Mr West, Senator Sherry— which claims that ASIC is in contempt of the Senate. Would you like to comment on that?

Mr Medcraft: I think you are talking about the order in relation to files.

Senator BOYCE: Filing every six months or sending through your files every six months.

Mr Price: We obviously had a close look at that following the Michael West article.

Senator BOYCE: I imagine you would have.

Mr Price: We think our reporting against the Senate order has been consistent with our interpretation of the order but, following Mr West's article, we had a look at how various other agencies, including Treasury, Department of the Prime Minister and Cabinet and a variety of others, seek to comply with that order. Based on that research, we are looking at updating our processes and guidelines at the moment and, in particular, in light of the fact that we are largely moving away from paper based files to electronic management.

Senator BOYCE: Given the time, Mr Price, perhaps you could take that question on notice and give me a very detailed response to (a) the claim and (b) what you are doing in reaction to the claims.

Mr Kell: We can take that on notice.

Response

ASIC has considered the claim by Mr West that ASIC was in contempt of Senate by not releasing all relevant file titles given that there had been a noticeable reduction in the number of files released under the order since 2009. Under the Order, ASIC is required to produce a file list relating to its policy advising functions, but does not include internal administration or case files, or parts of titles that could disclose confidential or identifiable personal or national security matters. ASIC's file list reporting has been consistent with our interpretation of the requirements of the Order. The number of file titles reported is not a reflection of the amount of policy work undertaken or how policy is developed.

ASIC also conducted a review of the internal processes to meet Senate Order 10 requirements. The review identified a change in interpretation of the requirements of the Order. This occurred with a move from a hard copy file system to an electronic document management system, combined with a change of personnel responsible for the process, following an internal restructure.

The introduction of an electronic document management system in 2009 has increasingly reduced the number of physical records being created. This has impacted on the number of files and file parts being reported as:

Less file parts need to be created to manage physical records; and
The increase in records being managed electronically changed the way files and documents are created, used and managed.

ASIC considered the interpretation of the guidelines and the processes used in other agencies to report against this Senate order including Treasury, Department of the Prime Minister and Cabinet and a number of other agencies. We have updated our internal guidelines and implemented new processes that are more consistent with those used in other agencies.

The new process will:

Provide clearer instructions and guidelines for staff on what makes a file title, or part title, eligible to be exempt from being included on the Senate Order 10 file title list;
Identify file titles at creation stage if they are eligible to be exempt, or partly exempt;
Improve reporting from records systems on file titles to be included in the list; and
Include a quality assurance process to review file titles identified by users as being exempt or partly exempt. This process will also review the full list of titles to ensure that those released do not breach confidentiality or privacy requirements.

To support the new, process change initiatives are being introduced for users on file titling and managing information regardless of format. This will form part of ASICs compliance with the Government's digital transition policy.

Questions 14–17 (Hansard p. 26)

CHAIR: [...] There is still work here that we did not get to, particularly regarding the business names register and some further dimensions about financial literacy. I would particularly like to ask questions about additional areas of the responsibility that you have acquired and how things are going in that space, so expect some questions from us on that.

Question 14

Topic: Business names register

a. Have all states referred relevant powers to the Commonwealth in relation to the registration of business names?

Response

Yes.

b. Was the nationalisation of business names registrations part of the Australia-New Zealand Closer Economic Relations (CER) reforms and is similar legislation being passed in New Zealand?

Response

No.

c. Does ASIC see any further changes in the registration requirement and/or regulation of small businesses in relation to the objectives of the CER reforms and in ASIC's oversight role?

Response

No, our goal is to work with the NZ companies office (MED) over time to have greater integration of our services in relation to registry searching and company registration. There are no plans for law reform and work is subject to priorities and funding.

d. ASIC currently has oversight of companies, are there any talks of extending ASIC's powers of oversight to small businesses?

Response

Business names reforms already cover various sole traders and unincorporated bodies.

e. Has there been any further investigation into a potential conflict between the permitted use of ASIC's business names database, and reporting requirements under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)?

Response

Not at this time.

f. Will the new Small Business Commissioner have any role in arbitration should a conflict arise in the registration of business names and will ASIC have any regulatory interaction with the new commissioner?

Response

ASIC does not expect to have regulatory interaction with the new Small Business Commissioner with respect to business names, but will be very happy to liaise as appropriate. This is because ASIC's powers are to administer the register, and there is a right of appeal to the Administrative Appeals Tribunal as per normal processes. Some names applications also require ministerial consent.

g. What consultations has ASIC had with the Department of Industry, Innovation, Science, Research and Tertiary Education to ensure that the online registration system is working properly?

Response

The Department of Industry, Innovation, Science, Research and Tertiary Education is the program lead for reforms. Liaison is very close and regular via formal governance structures (such as the Steering Committee) and less formal mechanisms (such as daily and weekly meetings.

h. In November 2010, ASIC informed the committee that it is developing a workforce plan for the National Business Names Register to identify resource requirements for the first three years post commencement. Has the workforce plan been effective?

Response

Yes, the business names team is established and effective, in preparation for the commencement of the ASIC Business names registration function on 28 May 2012.

Question 15

Topic: Consumer Credit

ASIC told the committee in March 2011 that it was prioritising the development of the skills and expertise of its staff in consumer credit issues relating to the provision of credit services by unlicensed and unregistered persons. How have these staff developments progressed?

Response

The development of skills and expertise of ASIC staff about consumer credit issues has been a priority for ASIC prior to and since the commencement of the National Consumer Credit regime. Before to the commencement of the national regime, ASIC employed a total of 44 staff nationally, ten of which were recruited from the State and Territory agencies that had responsibility for the regulation of consumer credit. In addition to recruiting staff with existing skills and experience in consumer credit, ASIC staff have developed their skills through formal training and through industry and community engagement. These activities have provided ASIC with significant insight and understanding of the issues arising from the provision of credit services by unlicensed providers and has also informed ASIC’s regulatory responses to such conduct.

1. Formal training

Prior to the beginning of the National Consumer Credit regime, all ASIC staff were given formal training in the fundamentals of the new legislation. More specific training was provided to those teams with day-to-day responsibility for the regulation of the National Consumer Credit legislation.

A total of 67 training events were delivered covering topics such as the National Consumer Credit Code, Responsible Lending, Licensing, Deterrence, and Hardship & Debt Collection Practices. Since October 2010 credit training has become a business as usual activity with training delivered to staff according to need. ASIC continues to offer online modules to all new staff on the fundamentals of the consumer credit regime.

2. Industry and Community engagement

(a) Unlicensed / Unregistered surveillance campaigns

ASIC’s role in administering the national consumer credit regime includes receiving and investigating complaints about unlicensed businesses that engage in credit activities.

In addition, ASIC has undertaken proactive surveillance campaigns aimed at identifying businesses that engage in credit activities that are unregistered and unlicensed. These campaigns commenced in September 2010 with a focus on ensuring that entities advertising credit services were registered with ASIC. This was followed with a second campaign to identify entities involved in consumer credit without a licence.

As part of the unregistered surveillance campaign, ASIC checked almost 5,000 businesses which advertised credit services to establish whether they had registered with ASIC. Most businesses (94%) were found to have registered and follow-up action was taken in relation to the remaining 6%. In relation to the unlicensed surveillance campaign, ASIC has checked entities that applied for, but were not granted, a credit licence. A number of these are subject to follow-up action.

In order to conduct these campaigns, staff involved were provided specific training on the credit registration and licensing requirements.

(b) Indigenous Outreach Program and Credit Outreach Teams

ASIC's Indigenous Outreach Program (IOP) conducts outreach visits to Indigenous communities providing information to and receiving complaints from consumers about financial services including consumer credit. ASIC considers the work of the IOP especially significant with respect to identifying credit issues that are particularly unique to remote indigenous communities.

ASIC's Community Outreach Team (COT) is responsible for the development and implementation of consumer education initiatives to Australian consumers. A major focus of the COT is to work within the community to assist consumer advocates and consumers understand the regulation, rights and remedies pertaining to consumer credit and importantly to identify unregistered and unlicensed activity. As part of this work, the COT conducted a National Consumer Advocacy Roadshow that involved rolling out training in every state and territory to consumer advocates such as Financial Counsellors and Community Lawyers. Over 600 participants across the country attended the sessions.

This type of community engagement has assisted ASIC’s understanding of the issues that arise from the provision of credit services by unlicensed providers to vulnerable, disadvantaged and indigenous communities. Through these programs ASIC also has also developed a greater understanding of the issues that face the entities that offer assistance to these communities such as the not for profit sector, the consumer advocacy sector and legal services.

Question 16

Topic: Insolvency profession

a. Has ASIC increased its resources in the insolvency area?

Response

ASIC has adequate though finite resources devoted to the insolvency area. ASIC has a dedicated stakeholder team staffed with a budgeted 28 FTE's for the 2011 – 12 financial year to assist us regulate registered liquidators through compliance activities including proactive reviews of insolvency practices. level of 28 FTE's remains unchanged from the previous 2010 – 11 financial year. FTE levels for the 2008 and 2009 financial years were 22 and 26 respectively.

b. How many referrals has ASIC made to the Companies Auditors and Liquidators Disciplinary Board over the past year? How does this compare with referrals made in the previous 12 months?

Response

ASIC can refer appropriate instances of non compliance with the Corporations Act to the CALDB for both auditors and liquidators.

ASIC referred one matter to the CALDB in both of the 2009/10, and 2010/11 years with one matter finalised in the 2011/12 year.

It should be noted that the CALDB is but one option available to ASIC to assist in dealing with liquidator compliance or taking enforcement action. Other options include agreeing to enforceable undertakings, court action or taking administrative action for certain breaches of the Corporations Act such as having inadequate insurance or failing to lodge an annual statement.

c. How many complaints has ASIC referred about liquidators and administrators over the past 12 months?

Response

ASIC's Insolvency Practitioner Team referred 11 matters to the Deterrence Team in the 12 months to 31 March 2012. We cannot reveal the names of the matters referred as investigations remain ongoing.

Question 17

Topic: Financial literacy

a. In June 2010, the committee raised with ASIC the question of what populations need attention when targeting financial literacy activities. ASIC was to discuss the matter with the Financial Literacy Board in March 2011[1]. What was the outcome of these discussions?

Response

The National Financial Literacy Strategy (available at www.financialliteracy .gov.au) sets out the populations that will be targeted by the financial literacy initiatives set out in the Strategy. Some of these are very broad categories and some are specific targeted groups.

The specific targeted groups are those groups that are most in need of financial literacy assistance: that is, retirees and pre-retirees, young people, Indigenous Australians, women and others over-represented in the lowest financial literacy quintiles or excluded from traditional avenues for financial information and advice.

The broader categories are all Australians that have or can potentially access financial products. The Strategy makes it clear that in targeting those broader groups, it will focus on:

the areas with the greatest potential to achieve lasting generational change; and
the financial issues and products that are poorly understood and whose misuse or non-use can cause the greatest harm.

These priority areas were approved by the Australian Government Financial Literacy Board as part of its overall endorsement of the Strategy.

ASIC has numerous initiatives aimed at the targeted groups listed above. For example:

for retirees and pre-retirees, we have targeted content on the MoneySmart website (such as information about investing basics, ensuring their super is on target, retirement income planning, specific high risk products commonly sold to this group such as CFDs and hybrid notes; and calculators such as a retirement planner, a reverse mortgage calculator, and a budget planner), publications such as our recent booklet Financial Decisions in Retirement which focuses on financial decisions at the point of retirement, our earlier publication on reverse mortgages and our Investing Between The Flags campaign (booklet and seminars);
the website also has dedicated content and publications for each of the other population segments identified above, including under 25s (using web content, video and social media, and on issues such as leaving home, studying, university debt, buying a car, mobile phones and starting work), women (dealing with their most important financial issues such as separation and divorce, superannuation and retirement) and the Indigenous community (for example on paying for funerals, book up, door to door sales, and getting help with money);
ASIC also has a credit outreach team and an Indigenous outreach team that each work with many of those excluded from traditional avenues for financial information and advice, and who may lack access to the Internet. These outreach teams work in partnership with other agencies such as the community welfare sector, consumer advocates, FaHCSIA, Centrelink, the Dept of Immigration and Citizenship and the Dept of Health and Ageing, to disseminate their messages to the most vulnerable consumers. Recent outreach team work has included a campaign on mortgage stress and a money management kit for newly arrived migrants, developed as a resource for settlement workers who work with newly arrived communities. Their current focus is on projects for youth in transition and for the elderly.

b. Can you advise the committee about how the National Financial Literacy Strategy is progressing?

Response

Implementation of the National Financial Literacy Strategy is progressing well. Progress on key initiatives under the Strategy is summarised below.

The Strategy has four pillars, namely:

i. Education through schools and other pathways;

ii. Providing trusted and independent information, tools and ongoing support;

iii. Recognising the limits of education and information and developing additional innovative solutions to drive improved financial wellbeing and behavioural change;

iv. Working in partnership with the many sectors involved with financial literacy, measuring our impact and promoting best practice.

ASIC is implementing and/or participating in a range of initiatives under each of these broad headings, as set out below.

Education through schools and other pathways:

ASIC has successfully lobbied for financial literacy to be included in the new Australian Curriculum being phased in over the next few years. The first phase will cover financial literacy aspects in the Mathematics, English and Science disciplines.

Helping Our Kids Understand Finances

ASIC is implementing the Helping Our Kids Understand Finances (HOKUF) initiative in partnership with state and territory education authorities over 2012/13. The project will deliver face-to-face professional learning, linked to the Australian Curriculum, for 6,000 teachers in Australian primary and secondary schools by the end of 2013. The professional learning will build teachers' capacity to integrate consumer and financial literacy education into the Australian Curriculum, as referred to above. A 'MoneySmart Teacher' package is being developed that will include units of work for teachers as well as guidance and support for parents. Drafts of the primary professional learning package are being reviewed by a reference group of representatives from all education jurisdictions and other key stakeholders.

ASIC also has a financial literacy website for teachers: www.teaching.moneysmart.gov.au. Content of the site will be progressively extended over 2012-2013 as resources developed under the HOKUF project are uploaded. A range of online and digital resources are being developed that will support the consumer and financial literacy content in the Australian Curriculum and help teachers engage students in 'real world' financial literacy contexts. Units of work developed and trialled under the indigenous Milba Djunga ('Smart Money') website project are also being revised to align them with the Australian Curriculum (see www.teaching.moneysmart.gov.au for a link).

Financial literacy in vocational education and training

ASIC is partnering with the Australian Taxation Office, Innovation and Business Skills Australia (IBSA - the national skills council for the financial services industry) and Group Training Australia (GTA) to develop and trial two new MoneySmart competencies. Both competencies will be freely available and self-assessing online modules. They will be trialled by GTA through their 35,000 apprentices.

The first competency, Being MoneySmart, is a Certificate III apprentice trade level competency. It will cover a financial health check, personal money management, personal tax, insurance and superannuation, and next steps such as using trade skills as an asset for future opportunities. The second competency, Being MoneySmart in Business, will be a Certificate IV licensing level competency. It will cover establishing a small business, being a contractor, business planning, managing business finance (including credit and debt management) and business requirements and compliance (tax, super and insurance).

Providing trusted and independent information, tools and ongoing support:

Research tells us there are widely differing levels of financial knowledge across the population, some financial products and decisions are less well understood than others and people have different preferences about how and from whom they want to receive information. In order to be effective, financial literacy efforts must respond to these differences.

MoneySmart website

The MoneySmart website is a key plank of the Strategy. Since launch in March 2011 MoneySmart has had over 1.8 million unique visitors; and over 2.3 million overall visits. It averages over 150,000 unique visitors per month. The site has around 300 pages of content, with information available in 26 languages. There are 26 calculators and tools, including 5 mobile calculators.

MoneySmart's monthly e-newsletter goes out to 20,000 subscribers, and 2,000 external sites link to the site. MoneySmart also uses social media to help promote its content. It has over 1,300 Twitter followers and over 800 Facebook fans, and reaches on average around 40,000 people via Twitter each month. MoneySmart's many videos available via YouTube have been over viewed over 41,000 times.

In late 2011 MoneySmart won the award for best Government Website at the 2011 Australian Web awards. It was also one of only 10 sites out of 200 investor protection sites ranked by IOSCO that was rated "outstanding" and given a 5/5 rating.

Publications, radio, outreach

As noted above, the Strategy acknowledges that people have different preferences about how they want to receive information. It also explicitly recognises that not everyone has Internet access, so we also ensure that we push our materials out by other means such as print, radio and face to face.

For example, the MoneySmart team manages more than 70 publications that can be ordered for free by calling ASIC’s Infoline on 1300 300 630 or downloaded from the website. Around 25,000 hard copy publications are distributed per month, both to organisations and individual consumers. There are publications on credit, debt, investing and super, as well as more complex topics such as hybrid bonds, debentures, cap guaranteed products and CFDs.

We also run radio campaigns on particular issues for specific audiences, such as community radio segments for Australia’s culturally and linguistically diverse (CALD) and Indigenous communities on issues such as credit, debt and book up; and our outreach teams do regular face-to-face presentations on money management issues to people who are excluded from traditional avenues for financial information and advice and/or who do not have web access.

Developing additional innovative solutions to drive improved financial wellbeing and behavioural change:

The Strategy recognises that financial literacy is not just about increasing knowledge of money matters and financial products, but actually helping and empowering people to take action to achieve greater financial wellbeing. The end goal is behavioural change, so the Strategy must look beyond education and information provision.

Thus one of the key principles of MoneySmart is to provide reliable personalised money guidance tools that are free, readily accessible, independent and of high quality, designed to engage people and motivate them to take action. They help people set goals, act on the guidance and stick with their plan over time.

The MoneySmart site has 26 calculators and tools that highly interactive and personalised, so as to maximise return visits. They include 5 mobile calculators in a Smartphone app that has been downloaded by 85,000 people so far. Users can log in and save and retrieve their results for 13 calculators including the budget planner, savings goal calculator, mortgage switching calculator and retirement planner.

In terms of our progress to date in prompting people to take action, our first survey of site users (done in August 2011) showed that 82% rated the site as useful and 39% as very useful, and 91% of users said they had taken action as a result of visiting the site.

Additional tools planned for release this year include a 'money health check' that will help people identify the areas where their finances are not in order, and the top 5 actions they should take; and a Spending Tracker phone app. We are also working on upgrading our calculators so they will work on iPads and other tablets.

Product suitability

The Strategy also acknowledges that, especially in a market characterised by increasingly innovative, complex and high-risk products, education programs alone are not sufficient to improve behaviour and alternative or additional strategies are needed. Thus ASIC is entering the debate about the suitability of certain products for retail investors, and whether it is appropriate that products such as for example CFDs, CDOs and hybrids can be freely sold to all. We also continue to reinforce the message: ‘If you don’t understand it, don’t buy it’.

Working in partnership:

MoneySmart Week

The Australian Government Financial Literacy Board has established a non-profit company to organize an annual MoneySmart Week, to be held this year from 2-8 September. Over 50 industry and community and government groups are contributing to the event. ASIC is supporting MoneySmart Week by lending its MoneySmart brand to the initiative, building a MoneySmart Week website and acting as Secretariat for the four teams of volunteers working on different aspects of the initiative. A key objective of the Week is to promote partnerships between government, community organisations and corporates. The main call to action this year will be for people to do MoneySmart’s money health check.

Financial Literacy Community of Practice

ASIC hosts monthly meetings via video conference of the Financial Literacy Community of Practice (CoP). The CoP promotes open dialogue, partnership and networking on financial literacy and is a valuable avenue to share information and learn from others. There are over 400 external participants, of whom around 60-100 attend each month. Speakers and topics covered are varied and cover issues such as Indigenous financial literacy, issues affecting the most vulnerable sectors of the community, current international and Australian research work and results of programs run by various agencies. Attendees come from all over Australia and New Zealand and include representatives from the community, education, financial services and government sectors.

Financial Information Service seminars

Last year ASIC offered an investor education program, 'Investing Between the Flags', in partnership with the Dept of Human Services' Centrelink Financial Information Service officers. 'Investing Between the Flags' is targeted at beginner investors and covers the basics of how to invest (risk and return, diversification, asset allocation), as well as how to manage investing risk in a way that suits an individual's risk tolerance and investment goals. Program resources include web content on MoneySmart, a print booklet and a 90-minute face-to-face seminar. We are hoping to repeat this seminar program this or next year.

Australian Defence Force

ASIC has formally partnered via a Memorandum of Understanding with the Australian Defence Force Financial Services Consumer Council. Through this partnership ASIC has helped develop a range of financial literacy resources in print and online. ASIC's Chairman also writes a monthly article in the service newspapers where he provides financial guidance and money tips for ADF members.

c. How does ASIC target the educational assistance it provides to Australian consumers and investors?

Response

This question can be read two ways – either how we identify what issues to target, or what sorts of channels we use for our education work. We respond to both aspects below.

ASIC uses a range of information and research to identify what issues to target in our educational assistance, for example:

research and intel gathered through the face to face liaison work done by ASIC's Credit Outreach team and Indigenous Outreach team;
intel gathered by ASIC's Infoline and call centre staff;
complaints gathered through ASIC's Misconduct and Breach Reporting area;
feedback gathered from users of its MoneySmart website, through the 'feedback' button on every page of the site;
commissioned market research about the MoneySmart website;
the input of ASIC's Consumer Advisory Panel, which helps us identify the issues causing real problems for consumers and investors, including vulnerable consumers who may not contact us;
industry intelligence received through our regular industry liaison work;
the results of the regular ANZ surveys on Adult Financial Literacy in Australia and other externally available research sources; and
regular systematic input, via both written reports and quarterly meetings, from both external dispute resolution (EDR) schemes, Financial Ombudsman Service and Credit Ombudsman Service Limited, about issues that consumers are complaining to those schemes about. This input highlights both systemic issues that may affect an industry sector and/or issues affecting a specific licensee; and comprises both quantitative reports about numbers of complaints received by EDR schemes, and qualitative commentary about issues encountered.

ASIC also uses a range of targeted channels for our education work, to ensure that we communicate with each audience sector using the channel that best suits them, for example:

for older Australians we ensure that we provide print publications on topics they have most interest in, such as retirement, superannuation and particular products such as reverse mortgages;
for our culturally and linguistically diverse (CALD) audience, we use radio segments on ethnic and community radio;
for consumers who consult intermediaries such as financial counsellors, legal aid centres, Centrelink or settlement workers, we provide print publications that these intermediaries can give their clients on issues most relevant to them, such as credit, debt and basic money management; and
for users of social media, we promote our MoneySmart messages on Twitter, Facebook and YouTube, as mentioned earlier.

The MoneySmart site will only be effective in improving people’s financial wellbeing if people use it; so we use a range of strategies to bring it to their attention. For example we actively encourage other organizations to link to our site, and about 28% of our traffic comes from those referring sites. We also we work hard to get MoneySmart listed as high as possible in search engines such as Google, since this is how most people search for information; and we estimate that 44% of our traffic comes from unpaid listings.

Finally we have a complementary strategy, in cases where our ad is not prominent in unpaid searches, to run targeted ads about specific topics via Google Adwords to bring relevant content to the attention of consumers seeking that information. About 11% of MoneySmart traffic comes from Google Adwords. We do this because for some topics MoneySmart will not be prominent in organic searches, and it is important to provide people with independent guidance and help on those topics. For example, a search for 'how to get rich quick' will swamp people with moneymaking schemes and potential scams; so we want to ensure MoneySmart is also among the search results. Similarly, a search for 'credit problems' will lead people to, among other things, commercial debt consolidation services; so we want to ensure they also receive MoneySmart information on how to manage debt.

d. The committee notes ASIC's recent launch of multilingual financial resources. What has been the response to these resources?

Response

The response to ASIC's multilingual financial resources has been very positive. Throughout March 2012, 12 training sessions were delivered to 330 community settlement workers nationally about how to use these resources with their clients. The workers who attended will go on to train their colleagues, so more than 600 workers in total will know how to use the resources. Community settlement workers will use our resources with almost 14,000 newly arrived humanitarian entrants every year and many more will be educated through the Settlement Grants Program every year.

Comments made by community settlement workers about the resources include:

"This information is perfectly suited to newly arrived people as it has been written in a way that is easy to understand and on topics that are extremely relevant to them".
"I wish these resources existed earlier".
"This is the best resource I've seen about money management".
"This is such a comprehensive resource that would be beneficial for all Australians".

A formal evaluation is currently being undertaken which will take account of additional feedback from community settlement workers who have used the resources with clients.

The Department of Immigration and Citizenship is looking to make further use of ASIC's resources in their Detention and Community Detention programs; and the Adult Migrant English Program and Language, Literacy and Numeracy Program teachers have expressed a wish to use the resources in their current teaching programs which reach thousands of students nationally each year. Workers who deliver the Australian Cultural Orientation (AUSCO) program overseas to refugee and humanitarian visa holders preparing to settle in Australia have also chosen to use our resources in their program.

Our multilingual community settlement workers kit is also available on the MoneySmart website, allowing many more people to access it Since early March when the resources were launched, there have been over 1400 visits to the "other languages" page of MoneySmart, and over 1200 visits to the Money Management Kit on MoneySmart.

e. What activities is ASIC undertaking to educate trustees of self-managed superannuation funds?

Response

ASIC works with the ATO in a number of ways to educate trustees of self-managed super funds.

For example, the ATO and ASIC produced a fact sheet Is self-managed super right for you? with key questions to ask if considering starting an SMSF. The questions cover important issues such as whether the fund is strictly for retirement benefits only, whether the person considering an SMSF has the requisite time and skills, whether the benefits will be worth the costs, and how switching to a self managed fund will affect any current super. The fact sheet is available at http://www.ato.gov.au/content/downloads/n13556-05-2005_w.pdf

and the media release at http://www.asic.gov.au/asic/asic.nsf/byheadline/05133+Four+key+questions+about+self+managed+super+funds?openDocument.

ASIC and ATO also have a joint publication Thinking about self-managed super, which can be downloaded from both MoneySmart and the ATO website at:

https://www.moneysmart.gov.au/superannuation-and-retirement/self-managed-super

http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00182491.htm

There are three other related ATO publications that SMSF trustees can access from MoneySmart which provide SMSF trustees with essential information on SMSFs, namely:

Setting up a self-managed super fund
Running a self-managed super fund
Winding up a self-managed super fund.

The MoneySmart website also has online content with links to other organisations (including the ATO and the Self Managed Super Funds Professionals' Association of Australia); see:

https://www.moneysmart.gov.au/superannuation-and-retirement/self-managed-super

ASIC also contributes regular articles to the ATO's e-newsletter for SMSF trustees, SMSF News. ASIC's articles focus on a variety of topics including investing within SMSFs. Recent contributions have been about the risks of overseas property investing, fixed interest, exchange traded funds, the risks of hybrid securities and protecting yourself against online trading scams

f. In its November 2011 ASIC oversight report the committee recommended that ASIC obtain empirical evidence of the resources allocated to its educative activities and the outcomes of these activities. What is ASIC's response to this recommendation?

Response

ASIC engages in a broad range of educational and financial literacy activities which have, since we were given responsibility for financial literacy at Commonwealth level, increasingly become part of our business as usual; and the work that contributes to financial literacy is integrated into the activities of various teams. Where possible we record the allocation of resources to each activity, however not all our education activities are discrete, have separate budgets or can be related to quantitatively measurable outcomes.

Examples of the larger blocks of work are the MoneySmart website, consumer publications, the credit outreach team and the MoneySmart schools program. Progress and outcomes of this work are set out in the responses to the questions above. Some of these are funded by discrete budget allocation – for example the Helping Our Kids Understand Finances initiative. Other education work is undertaken or contributed to by staff in numerous teams across ASIC and its resourcing cannot be readily isolated.

Our outcome measures for education work are both qualitative and quantitative. Examples of current MoneySmart outcome measures include:

Surveys of internet users - awareness of MoneySmart, number of people using the site, demographics, whether they found it useful, whether they took action to improve their finances as a result;
Analytics of traffic on MoneySmart website – number of visitors, most popular pages, feedback;
Publications – number of publications distributed; and
Advertising for MoneySmart – impact on traffic to MoneySmart website.

The Helping Our Kids Understand Finances (HOKUF) initiative also incorporates systematic testing and evaluation of key components of the work. For example the units of work developed for the indigenous Milba Djunga ('Smart Money') website were extensively trialled and evaluated; and drafts of the primary level professional learning package are currently being reviewed by a reference group of representatives from all education jurisdictions and other key stakeholders. We will also measure the number of teachers receiving professional training and the number of schools participating in the pilot MoneySmart schools program. ASIC will regularly publish relevant information about its educational activities and their outcomes on www.financialliteracy.gov.au.

Finally, ASIC is also supporting the international PISA (Programme for International Student Assessment) Financial Literacy Assessment, which will establish a first international benchmark of the level of financial literacy and financial behaviours of students when they finish the compulsory Australian school curriculum.

The inclusion of consumer and financial literacy in PISA 2012 and PISA 2015 will provide data and analytical tools to assess gaps and needs in consumer and financial literacy and evaluate the efficiency of educational initiatives in this area in Australia. This data in turn will contribute to informing an evidence-based approach for policy development and allow for international comparisons on consumer and financial literacy levels and financial behaviours of young people.

Navigation: Previous Page | Contents