Responsible Ministers

At 30 June 2020, the Minister responsible for ASIC was the Treasurer, the Hon. Josh Frydenberg MP.

Parliamentary Committees

ASIC is accountable to Parliament through the following Parliamentary committees:

• Parliamentary Joint Committee on Corporations and Financial Services
• Senate Standing Committee on Economics
• House of Representatives Economics Committee.

Correspondence with members of Parliament

ASIC receives correspondence from members of Parliament both directly and indirectly through requests from Treasury.

We aim to respond to 100% of correspondence within 28 days of receipt. In 2019–20, we received 311 letters and emails from members of Parliament and finalised 302. We responded to 93% of this correspondence within 14 days and 99% within 28 days.

Financial and operational oversight

ASIC is a non-corporate Commonwealth entity under the PGPA Act, which primarily governs our use and management of public resources.

The PGPA Act also requires ASIC to prepare a corporate plan covering our purpose, environment, performance, capability, and risk oversight and management for the budget forward estimates period.

ASIC’s Corporate Plan 2019–23 was published in August 2019.

ASIC’s Interim Corporate Plan, to address the impact of the COVID-19 pandemic, was published in June 2020.

The Auditor-General audits our annual financial statements on behalf of the Parliament.

Implementation of Royal Commission recommendations

The Royal Commission provided its final report to the Government on 1 February 2019. On 4 February 2019, the Treasurer released the Government’s response to the Royal Commission recommendations.

We have remained focused on a range of initiatives we began before or in response to the Royal Commission’s recommendations, and we are taking action on all Royal Commission recommendations directed at ASIC.

We have published regular updates on our actions to implement Royal Commission recommendations, including in February 2020: 20-047MR ASIC update on enforcement and regulatory work.

Details of our actions are set out in Chapters 1 and 2.

Judicial decisions and decisions of administrative tribunals

There were no judicial decisions, administrative tribunal decisions, or decisions by the Office of the Australian Information Commissioner in 2019–20 that have had, or may have, a significant impact on ASIC’s operations.

Parliamentary Joint Committees

During 2019–20, ASIC testified before the Parliamentary Joint Committee on Corporations and Financial Services and provided answers to Questions on Notice.

ASIC made submissions to the following Parliamentary Joint Committee inquiries:

• Parliamentary Joint Committee on Corporations and Financial Services – Inquiry into the regulation of auditing in Australia
• Parliamentary Joint Committee on Corporations and Financial Services – Inquiry into litigation funding and the regulation of the class action industry.

Senate Committees

During 2019–20, ASIC testified before the Senate Economics Legislation Committee and provided answers to Questions on Notice. ASIC also made a submission to the Senate Select Committee on Financial Technology and Regulatory Technology.

House of Representatives Committees

During 2019–20, ASIC testified before the House of Representatives Standing Committee on Economics and provided answers to Questions on Notice.

The role of the Commission

The Commission is ASIC’s governing body and is responsible for achieving ASIC’s statutory objectives as set out in the ASIC Act. ASIC’s Chair is ultimately responsible for the duties of the accountable authority contained in the PGPA Act, which form part of the executive responsibilities of governing ASIC.

The Commission is responsible for ASIC’s strategic direction and priorities. ASIC’s Executive Directors are responsible for the day-to-day management of ASIC’s work.

In 2019–20, ASIC continued its program to reform its governance, structure and decision-making processes. As set out in Chapter 1, ASIC has introduced an accountability and governance framework in order to support the Commission in effective, efficient and impartial decision making.

Commission meetings take place twice a month and may be convened more regularly as required. The Commission also meets as a team on a weekly basis to provide early direction or guidance on issues, or to consider urgent matters.

The Commission sets ASIC’s strategic priorities and organisational performance measures, allocates resources in line with these priorities and approves and monitors team business plans.

Commissioners are appointed by the Governor-General, on the nomination of the responsible Minister. The Minister may nominate only those people who are qualified by knowledge of, or experience in, business, the administration of companies, financial markets, financial products and financial services, law, economics or accounting.

Commissioners are appointed on fixed terms that may be terminated only for the reasons set out in section 111 of the ASIC Act. The Remuneration Tribunal sets Commissioners’ remuneration, which is not linked to their performance.

The ASIC Act requires Commissioners to disclose to the Minister direct or indirect pecuniary interests in corporations carrying on business in Australia, businesses in Australia, interests regulated by ASIC, or expectations, understandings, arrangements or agreements for future business relationships.

Chris Savundra, General Counsel, is the primary source of legal advice to the Commission, providing legal counsel to the Commission on major regulatory and enforcement matters. Other independent legal and accounting experts also advise on specific matters.

The Commission delegates various powers and functions to Executive Directors, Senior Executive Leaders, Regional Commissioners, and employees reporting to them, to ensure that ASIC’s business is carried out efficiently and effectively. Delegations are reviewed regularly and the Commission requires its delegates to act in accordance with policies and procedures approved by the Commission.

The Commission held 32 meetings in 2019–20. The Commission Enforcement Committee met 17 times, the Commission Regulatory Committee met eight times, and the Commission Risk Committee met five times in 2019–20.

Additional information on ASIC’s governance is published on our website.

Audit Committee and audit services

The Audit Committee operates independently of management and plays a key role in assisting the Chair to discharge his responsibilities for the efficient, effective, economical and ethical use of Commonwealth resources. The Committee does this by providing independent assurance to the Chair on ASIC’s financial and performance reporting, risk oversight and management, and system of internal control. ASIC’s Audit Committee Terms of Reference are available on our website.

The Committee reviewed ASIC’s 2019–20 financial statements and provided advice to the Chair and Commissioners on the preparation and review of financial statements before the Chair signed them. The Committee met four times during the year, supplemented by one special meeting.

Table 8.1.1 Audit Committee meetings, 2019–20

Table 8.1.2 Remuneration of independent Audit Committee members, 2019–20

Geoffrey Applebee is a chartered accountant and company director with significant financial, business and community experience.

Peter Achterstraat AM is the NSW Productivity Commissioner and has held a number of senior NSW State Government appointments, as well as being a former Deputy Commissioner of Taxation with the ATO.

Timothy Montgomery is a senior information technology executive for a separate Commonwealth entity and has significant information technology experience within an Australian Government setting.

Lisa Woolmer is a chartered accountant and member of a number of audit and risk committees across the Commonwealth, Victorian state, and local government sectors.

The internal appointee, Cathie Armour, is a Commissioner of ASIC.

Internal audit services are provided by internal audit employees from ASIC’s Internal Audit team, supported by specialist private sector internal audit providers as needed. The Australian National Audit Office provides external audit services. Senior external and internal audit representatives attend Audit Committee meetings.

Peter Achterstraat AM
Chair
Audit Committee
August 2020

Advisory panels and committees

ASIC takes a consultative approach to addressing harms and emerging developments in Australia’s financial system.

As part of ASIC’s strategic change program, we have enhanced our advisory panel processes to bolster their efficiency and ensure that we are effectively engaging with our stakeholders to gain a deeper understanding of industry and consumer developments, consult on policy matters, and identify threats and harms in the sectors we regulate.

ASIC Business Advisory Panel

ASIC’s Business Advisory Panel facilitates consultation with the business community about ASIC’s registry and licensing services, with an emphasis on small business. It advises on strategic direction, as well as operations and improvement initiatives, with a focus on assessing the impacts on business.

Panel members are drawn from a wide range of business, industry and professional organisations. Each member represents an area of relevant experience and expertise.

The Panel met twice in 2019–20. Themes of engagement across the year included the Government proposal to modernise business registers, the introduction of a Director Identification Number, and the impact of the COVID-19 pandemic on the registry’s small business customers. The Panel also provided feedback on the experiences of businesses and agents using our registry services.

ASIC Consultative Panel

The ASIC Consultative Panel was established in 2020, replacing the External Advisory Panel, to provide ASIC with a more flexible and responsive approach to external engagement.

The Panel enables ASIC to consult on proposed regulatory changes; provides intelligence on the external environment, including market conditions; and identifies threats and harms in the markets we regulate. Panel members are senior representatives from the academic, consumer, industry, legal and regulatory sectors and are appointed in their personal capacity.

Panel members may be called upon to consult on emerging issues as they arise and will meet as a group at a plenary meeting at least once annually.

In 2020, a subset of Panel members met once to discuss emerging threats and harms in the sectors ASIC regulates. Due to the disruption caused by the COVID-19 pandemic, the first formal meeting of the full Panel will occur later in 2020.

Australian Government Financial Literacy Board

The Australian Government Financial Literacy Board was established in 2005 as a non-statutory body that provides independent and strategic guidance to the Government and ASIC on financial literacy and capability issues. The Board met twice in 2019–20 and discussed issues such as ASIC’s engagement in the formal education sector, as well as the work of the Indigenous Outreach Program.

The terms of all members of the Board expired on 21 January 2020.

Consumer Advisory Panel

The Consumer Advisory Panel (CAP) was established in 1999. It advises ASIC on current issues affecting retail investors and consumers in the financial services and wealth management industries, and informs ASIC’s surveillance, enforcement, policy and financial education initiatives. The CAP meets three times a year.

This year, the CAP focused on implementation of the Royal Commission law reform agenda, ASIC’s enforcement priorities and litigation outcomes, and significant research reports, including Report 632 Disclosure: Why it shouldn’t be the default.

The CAP contributed to ASIC’s strategic priority identification process and maintained its strong focus on financial products and services that lead to poor consumer outcomes, including in relation to superannuation and life insurance, buy now pay later arrangements, payday lending, debt management firms, mortgage broking, timeshare memberships, and insurance claims handling, particularly after this year’s bushfires.

It also maintained a policy focus on IDR policy settings, remediation, financial advice, and the implementation of ASIC’s product intervention powers and the upcoming issuer and distributor obligations.

The CAP also advised ASIC about the consumer impacts of the COVID-19 pandemic and on CAP members’ priorities in responding to the pandemic.

Corporate Governance Consultative Panel

The Corporate Governance Consultative Panel was established in 2020 to enable ASIC to gain a deeper understanding of developments in corporate governance practices and emerging issues in this area. It replaced the previous Director Advisory Panel.

Members of this Panel comprise listed company directors, industry association representatives, institutional investors and academics.

The Panel met once in 2019–20 to discuss the key regulatory measures adopted in response to the COVID-19 pandemic, as well as key corporate governance challenges in the pandemic environment, including ASIC’s action to maintain equity market resilience, temporary insolvency relief for financially distressed businesses, and ASIC and ASX measures to assist companies with equity raising during the pandemic.

Digital Finance Advisory Panel

The Digital Finance Advisory Panel (DFAP) was established in 2015 to help inform ASIC’s fintech and regtech approach and to advise on engagement with the sector.

The members of DFAP are drawn from a cross-section of the fintech and regtech communities, academia and consumer organisations. DFAP also has active observer members from public sector and regulatory agencies, which facilitates dialogue between industry and the public sector.

The establishment of DFAP has helped foster a network of domestic departments and agencies dealing with innovative businesses, which has promoted a coordinated approach to financial innovation and regtech.

DFAP met three times in 2019–20 and advised on topics such as the ramifications of, and opportunities in the wake of, the COVID-19 pandemic; developments and issues related to crypto assets and initial coin offerings in Australia; and the implementation of reforms such as the consumer data right and the new payments platform, with a focus on what this means for the fintech and regtech sectors.

External Advisory Panel

The External Advisory Panel was established in 2009 to help ASIC gain a deeper understanding of developments and issues in the financial services industry. The Panel met once in 2019 and discussed emerging threats, challenges and opportunities involving the Australian economy, consumers and industry. As part of ASIC’s strategic review of its advisory panels, this year the External Advisory Panel was replaced by the ASIC Consultative Panel.

Financial Advisers Consultative Panel

The Financial Advisers Consultative Panel was established in 2017. Its members are practising financial advisers who are skilled in insurance, superannuation (including SMSFs) and digital financial advice. The members sit in a personal capacity.

The Panel met three times in 2019–20. Issues discussed included the use of ASIC’s product intervention powers, law reform arising from the Royal Commission, and ASIC’s ongoing work in relation to unmet advice needs, life insurance, fee disclosure statements and renewal notices.

Markets Advisory Panel

The Markets Advisory Panel was established in 2010. Its members are drawn from the financial services industry and have extensive experience in retail markets, institutional banking and asset management. The Panel advises on ASIC’s approach to its responsibilities for ongoing supervision of the Australian market, as well as on broader market developments.

The Panel met five times in 2019–20. Issues discussed included the impact of the COVID-19 pandemic on markets and financial services firms; CHESS replacement; technological, operational and cyber resilience; activist short selling; internal market making for actively managed funds; and retail investor harms, including the application of the product intervention power.

Disciplinary or registration panels

The panels listed below have disciplinary or registration functions and assist in our regulatory decision making.

Financial Services and Credit Panel

The Financial Services and Credit Panel (FSCP) makes decisions about whether to ban individuals from providing financial services or engaging in credit activities. Matters are referred to sitting panels drawn from the FSCP. Each sitting panel consists of two experienced industry participants from the financial services or credit sector and an ASIC staff member.

The FSCP regime, which operates alongside ASIC’s existing administrative decision-making processes, is reserved for matters we consider are appropriate for peer review because of their significance, complexity or novelty. No matters were referred to the FSCP during 2019–20.

Liquidator Registration and Disciplinary Committees

Applications for registration as a liquidator, or to vary or remove conditions imposed on a liquidator’s registration, and potential disciplinary action against registered liquidators are referred to committees convened by ASIC.

Each committee consists of an ASIC delegate who chairs the committee, a registered liquidator chosen by the Australian Restructuring, Insolvency and Turnaround Association (ARITA), and a person appointed by the Minister, as set out in sections 20–10, 20–45 and 40–45 of Schedule 2 to the Corporations Act.

During 2019–20, ASIC referred 21 applications for registration as a liquidator to committees convened by ASIC. ASIC registered 17 liquidators following committee decisions that they should be registered, including four people who had applied for registration in 2018–19. Of the 21 applications referred during 2019–20, eight applicants were registered by ASIC, one applicant was in the process of being registered by ASIC (but not registered during the period), five were registered by ASIC with conditions, one was not registered, and the outcomes of the remaining six applications are yet to be determined.

During 2019–20, ASIC received three applications from liquidators to vary or remove conditions attached to their registration. The applications were referred to committees convened by ASIC for consideration. One committee decided to remove a condition imposed on the liquidator’s registration and ASIC implemented that decision. One committee decided not to vary the conditions imposed. The outcome of the remaining application is yet to be determined.

During 2019–20, four disciplinary committees considered matters referred by ASIC. Two committees decided to cancel liquidator registrations and ASIC implemented those decisions. One committee decided to impose conditions on the registration of a liquidator and ASIC implemented the decision. One committee was not able to make a decision because the Federal Court cancelled the liquidator’s registration before the committee’s decision was made.

The register of liquidators and a summary of disciplinary actions can be found on the ASIC website.

Markets Disciplinary Panel

The Markets Disciplinary Panel (MDP) is a peer review panel engaged by ASIC to make decisions about whether infringement notices should be given to market participants for alleged contraventions of the market integrity rules. It consists of part-time members with extensive market or professional experience. Matters are referred to the MDP by ASIC as an alternative to bringing civil proceedings.

During 2019–20, the MDP issued infringement notices in respect of two matters:

• Finclear Execution Limited (Finclear) paid a $70,000 infringement notice in connection with a pre-arranged transaction that the MDP considered to have resulted in the market for the shares not being fair and orderly. The MDP was also of the view that Finclear had not acted in accordance with its client’s instructions by entering into a transaction that was not made in the ordinary course of trading.
• Credit Suisse Equities (Australia) Limited (Credit Suisse) paid a $75,000 infringement notice in connection with transactions that the MDP considered were not made in the ordinary course of trading and were not in accordance with instructions of Credit Suisse’s clients.

The infringement notices issued by the MDP are published on the MDP Outcomes Register on the ASIC website. Compliance with an infringement notice is not an admission of guilt or liability, and the market participant is not taken to have contravened subsection 798H(1) of the Corporations Act.

ASIC's people

ASIC continues to attract and retain highly skilled employees who are instrumental in ensuring that we carry out our regulatory functions and achieve our regulatory goals.

As noted in Chapter 6, from 1 July 2019, ASIC is no longer part of the Australian Public Service (APS). The Treasury Laws Amendment (Enhancing ASIC’s Capabilities) Bill 2018, passed on 17 September 2018, amended the ASIC Act to remove the requirement for ASIC to engage staff under the Public Service Act.

As at 30 June 2020, ASIC had a total of 1,940 employees.

Table 8.1.3 ASIC employees (FTE), by location, 2019–20^1,2,3

Table 8.1.4 Combined totals by gender and employment type, 2019–20

Table 8.1.5 ASIC employees (FTE) by stakeholder team, 2019–20

Most of our staff are employed under the ASIC Enterprise Agreement 2019–22, which is ongoing

Table 8.1.6 Industrial arrangements for ASIC employees as at 30 June 2020¹

Table 8.1.7 Salary ranges per annum

We continue to provide our people with the opportunity to receive an annual performance bonus.

Table 8.1.8 Performance payments, 2019–20, by classification

Table 8.1.9 Remuneration paid to key management personnel (KMP) in 2019–20¹

Table 8.1.10 Remuneration paid to senior executives in 2019–20¹

Table 8.1.11 Remuneration paid to other highly paid staff in 2019–20¹