ASIC more 'reactive than proactive': Kirk

by Adam Smith22 Feb 2012

ASIC's Greg Kirk has conceded that much of the watchdog's activity must be "reactive".

Speaking to the ASIC Summer School in Sydney, Kirk, the regulator's senior executive leader of deposit takers, credit and insurers, said ASIC's limited resources meant much of its enforcement action had to stem from reacting to consumer complaints.

"Our enforcement action is more often than not going to be arising from complaints, so it's more likely to be reactive than proactive," he said.

However, Kirk said ASIC's proactive enforcement would largely focus on "high risk" sectors the watchdog deemed likely to see non-compliant activity.

"My team has much more opportunity to be proactive, so the next step for us is to try to pick a few areas we feel are high risk," he said.

Kirk pointed to the regulator's recent reviews of payday lenders and low-doc brokers. He said ASIC had chosen the sectors because they were deemed high risk.

"We found a relatively good acknowledgement of awareness of the requirements. There were procedures that needed to improvement in both sectors, but we thought both - particularly payday lenders - had come a long way in 12 months," he said.

Kirk reiterated his earlier vow that low-doc lenders would be next to come under the regulator's scrutiny. He said ASIC would also turn its eye to leased goods providers, an area which had been subject to a wealth of consumer complaints.

"We're doing work at the moment on small leased goods providers. We've had lots of complaints there, and we thought that was justification for looking right across that sector. They don't seem to have a good understanding of the requirements, and there's been a lot of past avoidance activity," Kirk said.

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