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Frydenberg lays down the law to regulators

30 April 2021 7:09AM

Treasurer Josh Frydenberg announced the appointments of a new chair and deputy chair of the Australian Securities and Investments Commission yesterday, taking the opportunity to reiterate his theme that regulators must support government policies and aims, not pursue their own agendas.

The new chair is Joseph Longo, a corporate lawyer who is currently senior adviser at Herbert Smith Freehills. He was previously general counsel at Deutsche Bank in London and Hong Kong for 17 years.

Longo has worked at ASIC before, serving as national director of enforcement. He will start his five-year term on June 1, replacing James Shipton.

The new deputy chair is Sarah Court, who has been a commissioner at the ACCC since 2008.

Before working at the ACCC, she was a senior executive lawyer at the Australian Government Solicitor. She replaces Daniel Crennan.

Announcing the appointments, Frydenberg said the government would issue ASIC with a new Statement of Expectations.

He said the statement will make clear “that the government expects ASIC to support Australia’s economic recovery from the COVID-19 pandemic”.

Frydenberg has had a bee in his bonnet about regulatory independence for some time, seemingly uncomfortable with the Hayne royal commission recommendation that regulators be empowered to make sure financial institutions obey the law.

Last year he said: “Regulators must pursue their mandates in a manner that is consistent with the will of the parliament.”

He has also said: “There need to be mechanisms to hold them [regulators] to account. It is the parliament that determines who and what should be regulated. It’s the role of regulators to deliver on that intent, not to supplement, circumvent or frustrate it.”

He signalled his intent last year with a bill that largely removes responsible lending rules from the National Consumer Credit Protection Act. His view is that ASIC’s administration of responsible lending has become too prescriptive, too technical and too time-consuming for borrowers and lenders.

And in December the government introduced a bill amending the Competition and Consumer Act, transferring Consumer Data Right rule-making from the ACCC to the Treasurer.

In yesterday’s statement, Frydenberg said the government would introduce legislation to establish the Financial Regulator Assessment Authority, which will conduct two-yearly assessments of the effectiveness and capability of ASIC and APRA.

“The FRAA will be tasked with assessing the effectiveness and capability of ASIC, so as to assist the incoming chair in ensuring ASIC is operating effectively and consistent with the government’s Statement of Expectations.”

 

 

 

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