While evidence points to regulation’s negative effects on industry, the Australian Securities & Investments Commission (ASIC) has said that a broad picture approach is needed to draw out the benefits that such regulatory guidance provides.
At the ASIC Regtech Showcase in Sydney yesterday (18 September), ASIC commissioner John Price said that despite the Productivity Commission’s 2006 findings that regulation introduces costs and impedes innovation, it was more prudent to consider the benefits businesses received.
Price set forth these views while answering a question by Australian Broker
on regulatory burden felt in the broking community.
“Regulation exists for a reason, be it environmental or consumer protection or financial stability so my speaking point when I speak to people is that regulation is not bad. Bad regulation costs the community, but good regulation actually delivers for the greater good.”
The answer to this question was more than just black or white, he added, and needed to be expanded into more than just looking at whether regulation overall was bad.
“You’ve always got to look at the individual regulation and work out whether it’s benefiting the community or if it’s costing the community.”
It is important for private enterprises to realise that there are some benefits to regulation, Price said, especially since it helps create trust.
“Trust is something that’s very important. If you want to have a market, you’ve got to have trust. Regulation tech can help breed that.”
During the event, Price appeared on a panel alongside PwC partner Kristin Stubbins, Westpac chief compliance officer and group general counsel Rebecca Lim, and APRA general manager of data analytics Katrina Ellis.
Stubbins said that while she agreed that compliance and regulation at a system level are very important, she also did not want to detract from the fact that regulation was a difficult matter for businesses to deal with.
“I do think it’s important to acknowledge that small businesses and medium sized businesses have a lot of regulatory burden. But regulation and regulatory reporting for our system is critical so I think they’re two separate points.”
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