The Association of Superannuation Funds of Australia (ASFA) has used a submission to the Treasury on Financial Services Regulation to criticise the approach sometimes adopted by the Australian Securities and Investments Commission (ASIC).
Responding to a proposal paper issued by Treasury, ASFA has recommended some key changes to the approach adopted by ASIC, including that the regulator, where possible, provide up-front guidance clearly separate from any enforcement activity.
It said that past experience had demonstrated that enforcement action taken by ASIC could unnecessarily add complexity and cited circumstances where superannuation funds had entered into voluntary undertakings the details of which had led to confusion in the industry.
“In both instances, there was considerable confusion as to whether these voluntary undertakings reflected general ASIC standards or were in response to a specific set of facts or circumstances,” the ASFA submission said.,
“ASIC has been unclear and at times contradictory on this matter. As well, ASIC should be selective in its use of enforceable undertakings given the negative publicity that such undertakings invite,” it said.
ASFA’s submission said that some funds had also indicated that ASIC could sometimes take a confrontational approach and that when initiating dialogue on a matter of concern might threaten the use of an enforceable undertaking when a simple discussion could serve to clarify a matter of concern.
“While a more measured approach from ASIC has emerged in recent months, ASIC must be crystal clear as to the status of such enforcement activity,” the submission said.
It said that ASFA also believed that ASIC should coordinate its policy and enforcement staff to ensure internal consistency.
