• Spotlight with Greg Tanzer

    Greg Tanzer

    This edition, the spotlight is on Greg Tanzer, Commissioner at the Australian Securities and Investments Commission (ASIC).

    ASIC is Australia's corporate, markets and financial services regulator. It contributes to Australia's economic reputation and wellbeing by ensuring that Australia's financial markets are fair and transparent, supported by confident and informed investors and consumers. ASIC is a partner agency in Project Wickenby.

    What is your vision for ASIC in the short term future, particularly from the perspective of a whole-of-government approach to fighting tax and financial crime?

    We are focused on three strategic outcomes, and these basically summarise our role as an organisation. Our first strategic outcome is confident and informed investors and financial consumers. This can be split into three parts: education, gatekeepers and consumer behaviour.

    ASIC's second strategic outcome is fair and efficient financial markets. This can be split into three parts: market supervision, market competition and corporate governance.

    Our third strategic outcome is efficient registration and licensing.

    Delivering these outcomes goes a long way to achieving the broader goals of Project Wickenby. The scope for tax crime is vastly limited where the markets operate fairly, efficiently and in a transparent manner and where the gatekeepers of those markets are accountable for their actions.

    The financial system is growing in complexity, especially with rapid advances in technology. This presents a challenge to all regulators and increases the imperative for ASIC to respond swiftly and decisively to instances of misconduct.

    ASIC has taken a number of actions as part of the Project Wickenby taskforce, the most recent resulting in the guilty plea of a former mining executive to charges of insider trading.

    What specific capability does ASIC bring to Project Wickenby?

    ASIC plays an important regulatory role in the task force. We consider whether to investigate matters where there may have been a breach of the corporation's legislation, particularly in respect of directors' duties, the publication of misleading financial information, and lack of timely and accurate disclosure or market manipulation.

    We also enforce the law relating to the participation in international arrangements regarding breaches of laws relating to financial markets and corporations, amongst other things.

    How does ASIC's work with international organisations, foreign regulators and law enforcement agencies help with the challenges faced domestically?

    ASIC's regulatory surveillance and deterrence work increasingly requires information and evidence to be obtained from overseas. ASIC also assists foreign regulators by obtaining information and evidence in Australia for their investigations. ASIC is a signatory to the International Organisation of Securities Commission (IOSCO) multilateral memorandum of understanding and also several bilateral memoranda of understanding and other international agreements. These documents outline the relationship between the signing parties with regard to mutual assistance and the exchange of information for the purpose of enforcing and securing compliance with the respective laws and regulations of the signing authorities.

    As the former Secretary General of IOSCO, I am well positioned to understand the importance of developing policy and standards at the global level to tackle issues domestically and across borders.

    Adding to that expertise and understanding, ASIC's Chairman, Greg Medcraft, was recently appointed Chairman-elect of the IOSCO Board, with his term to begin when the current chairman, Masamichi Kono, steps down in March 2013.

    A practical application of ASIC's work with foreign regulators and law enforcement agencies is recent action against a company incorporated in the British Virgin Islands and operating from Hong Kong. ASIC obtained interim orders in the Federal Court restraining the company from disposing of, or exercising any votes or other rights attached to, 15 million shares that it holds in an Australian listed company.

    ASIC alleges that the company holds the shares on behalf of another party who has concealed their interest from the Australian share market. This has resulted in inadequate market visibility on the true ownership of the shares in question and is contrary to disclosure requirements under the Corporations Act. It is a typical example of the type of conduct that the Project Wickenby task force aims to prevent - that is, the use of certain secretive financial arrangements which have the potential to compromise the integrity of Australia's financial markets.

    The Federal Court action was taken by ASIC in line with its broader, continuing focus on maintaining fair and efficient financial markets. ASIC is continuing its investigation into matters associated with this company's shares and is progressing its application in the Federal Court.

    What do you think will be the biggest challenge for ASIC into the future, and how will it meet these challenges?

    ASIC has consistently articulated three key challenges that we need to meet to achieve our strategic outcomes, as described earlier.

    Our first challenge is ASIC's growing regulatory perimeter. We estimate that funds under management in the superannuation sector will rise from $1.3 trillion to nearly $3 trillion over the next decade and then to $5 trillion by 2030. More products, more investors and more money to invest increases value to the economy and capital for exchanges, but it also increases the overall level of risk in the financial system.

    Our second challenge, as discussed earlier, is the growing complexity in the financial system. Advances in technology have led to increasingly complex financial products, information channels, and financial markets. Technology is advancing at a rapid rate and the complexity it brings also increases risk in the system.

    The final challenge is for ASIC to leverage its resources and be proactive, because it is through proactive regulation that we build resilience in the system.

    Stakeholder engagement, surveillance, education and guidance are central to being proactive and maintaining confidence in Australia's financial system.

      Last modified: 22 Nov 2012QC 28311