Additional Comments by the Australian Greens
1.1
The Australian Greens agree with the vast majority of recommendations
and direction taken by the committee's inquiry into the performance of the
Australian Securities and Investment Commission (ASIC).
1.2
It is important to note that the inquiry's recommendations call for an
increase in activity by ASIC across their roles and responsibilities. This
inquiry report comes after the recent Federal Budget which cut funding to ASIC.
The Government should implement most of the recommendations in the report and
ensure ASIC is appropriately resourced.
1.3
The Australian Greens are keenly interested in the results of the
Government's scoping study into privatisation of ASIC's company registry. The
Greens will not support any registry model which limits transparency and makes
it more difficult and expensive to search a company’s shareholders and
directors and in the case of public companies, access financial details in
annual returns loans and offer documents.
1.4
The Australian Greens disagree with recommendation 41 concerning the
commissioning of an inquiry into the current criminal and civil penalties
available across the legislation ASIC administers. This inquiry into the
performance of ASIC has been extensive and it is clear from ASIC's evidence
that they believe penalties are insufficient. On 20 March 2014, ASIC released a
comparison of penalties available to ASIC and those available to its foreign
counterparts, other Australian regulators and across the legislation ASIC
administers. It concluded that:
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while ASIC's maximum criminal penalties are broadly consistent
with those available in other countries, there are significantly higher prison
terms in the US, and higher fines in some overseas countries for breaches of
continuous disclosure obligations and unlicensed conduct—for example, the fine
for individuals for unlicensed conduct in Australia is $34,000, whereas in
Hong Kong it is $720,000; in Canada it is $5.25 million; in the United
States it is $5.6 million; and in the United Kingdom there is no limit on the
maximum fine;
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there is a broader range of civil and administrative penalties in
other countries, and the penalties are higher (see Table 23.1);
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the maximum civil penalties available to ASIC are lower than
those available to other Australian regulators and are fixed amounts, not
multiples of the financial benefits obtained from wrongdoing; and
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across ASIC's regime there are differences between the types and
size of penalties for similar wrongdoing (for example, ASIC noted that
providing credit without a licence can attract a civil penalty up to ten times
greater than the criminal fine for providing financial services without a
licence).[1]
Recommendation 1
1.5
The Australian Greens believe a new inquiry across the current criminal
and civil penalties is not needed; instead the government should immediately
consult with ASIC and bring forward legislation that strengthens Australia’s
civil and criminal penalties which at minimum should bring them into line with
global benchmarks.
Senator Peter Whish-Wilson
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