ASIC chief flags culture focus – The Australian

The corporate regulator will place a sharp focus on financial culture in the year ahead, according to its boss, with insights into the behaviours of investors and gatekeepers central to the body meeting its objectives.

ASIC chairman Greg Medcraft made the comments in his opening remarks to the Parliamentary Joint Committee on Corporations and Financial Services this morning.

“For gatekeepers, the three key behavioural drivers are culture, incentives and deterrence,” he said.

“In respect of culture, boards and management play a critical role in setting the culture of firms.

“If we find a firm’s culture is lacking it is a red flag that there may be broader regulatory problems.”

Mr Medcraft said ASIC will be addressing culture not just in markets but in financial service more widely, as well as looking to assess the link between culture and conduct. The regulator will provide more detail when it publishes its 2015-16 strategic outlook in late August.

In his opening remarks, Mr Medcraft also reiterated his support for the government’s capability review of ASIC, which is itself linked to the government’s consideration of a Murray inquiry recommendation that ASIC’s regulatory activities be funded by industry.

“The Murray inquiry also recommended each of the financial regulators undergo periodic capability reviews and that in light of the significant changes recommended for ASIC’s funding, tools and powers, that we be the first regulator to undergo a capability review,” he said.

“Looking at our current position, we consider we are effective and efficient within the resources we have.”