The banking royal commission’s hearings on the superannuation sector will examine the role of primary regulators the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA), which could identify regulatory gaps, according to a financial services consulting firm.
“It will be interesting to see the separation of authority and responsibility between the two primary regulators and assessing whether that arrangement is still broadly appropriate – are we getting good coverage or are there any gaps in having two regulators?” QMV legal and risk principal consultant Jonathan Steffanoni told a media briefing in Sydney yesterday.
“The distinction between what ASIC and APRA do is interesting to look at – APRA’s mandate calls for financial stability of the financial system and how it operates, whereas ASIC is focused more on how the market operates, so they take very different lenses to the same industry.”
Steffanoni said a single regulator across both these areas would face a steep learning curve as ASIC and APRA cover the financial services industry from very different angles.
He noted while there was a place for both bodies and having multiple influences in superannuation regulation, if gaps are identified, reform is to be expected.
“The royal commission has heightened evidence-gathering powers so they may be able to obtain insight to gain a greater understanding of issues which they may already be aware of and that may identify areas for reform which make their way into recommendations,” he said.
“But also one of the main focuses of the royal commission is to look at misconduct as well, so where there’s been practices and behaviours which are illegal and in some cases potentially criminal, so it’s not just a policy review process.
“This has a much broader focus and it’s something that shouldn’t be taken lightly.”
