Australia’s long-criticized corporate watchdog should be split into two after “comprehensively” failing to take action against white-collar criminals, a Senate committee report said on Wednesday.
The 20-month-long inquiry found that the Australian Securities and Investment Commission’s (ASIC) scope was too broad for it to be effective and efficient. It described the agency’s culture as “very sick.”
The government should consider splitting its functions between a companies regulator and a financial conduct authority, the report said, noting that ASIC seemed more focused on managing its reputation.
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“It is clear ASIC has failed,” said Senator Andrew Bragg, who also chaired the Senate Economics Committee, which delivered the final report after a 20-month long inquiry.
Bragg, a Liberal Senator, said in February there were too few criminal convictions for breaches of corporate law. “For some people, Australia is a haven for white-collar criminals,” he said.
On Wednesday he noted that successive moves to expand the regulator’s remit ended with it having “the widest [ambit] of any corporate regulator in the world.”
‘Whistleblower protection provisions needed’
The ASIC did not immediately respond to a Reuters request for comment. But the government-funded ABC News said it sent a statement saying it would “take time to consider” the report’s findings.
“ASIC is in court almost every day pursuing wrongdoing and in the last 12 months alone launched around 180 new investigations,” it was quoted as saying.
”ASIC is already working with Treasury to act on the recommendations from the Financial Regulator Assessment Authority’s review of ASIC’s effectiveness.”
Besides splitting the ASIC, the report also made 10 other recommendations. These included amending the whistleblower protection provisions to include compensations and incentives for those who make a “substantial” disclosure.
“These measures, if adopted, would provide Australians with the protection and confidence which is sadly absent,” Bragg said.
However, he admitted the committee’s recommendations were unlikely to be adopted in the current term of government, which ends in May next year.
- Reuters with additional input and editing by Jim Pollard
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