New ASIC taskforce to simplify ‘legislative porridge’

ASIC chair Joe Longo has launched a simplification taskforce to untangle Australia’s complex web of regulations which hinder consumer justice and add compliance costs to business.

ASIC chair Joe Longo. Picture: Aaron Francis / The Australian

Australia’s complex web of regulations unnecessarily hinder consumers in their quest for justice and saddle businesses with compliance costs, says ASIC chair Joe Longo, who has launched a new simplification taskforce.

The Simplification Consultative Group’s role will be to identify how the Australian Securities & Investments Commission can more efficiently and effectively administer the law.

“I want this group to reinvigorate national discussion about complexity,” Mr Longo told ASIC’s annual forum in Sydney.

It comes as the corporate watchdog takes a deep dive into the superannuation industry following allegations that Cbus mishandled $20m worth of death and disability claims.

“As a regulator, our experience is that simplicity means enforceability,” Mr Longo said.

“That’s good for consumers and investors – they get justice and outcomes – and it’s good for businesses, who get clarity about what’s required of them.”

Australia does not do “simplicity well”, he said, highlighting that federal parliament passes between 150 and 200 bills a year.

This has been graphically referred to as “legislative porridge”, he said.

“The result of all this is an often dizzying web of connections, references, and definitions.

“The mosaic of complexity also impacts consumer issues – including how we combat scams, predatory lending and unfair contracts. It makes it more likely that Australians lose out on the intended benefits of worthwhile reform.”

Mr Longo said the current legislative environment makes it harder for consumers and investors to identify and enforce protections and rights; affects the productivity of businesses; and hurts consumers by increasing the risks of non-compliance.

“Complexity is a clear and present danger to our work as a law enforcement agency,” he said, noting that “simplicity makes it easier to follow the law, for consumers to be protected by the law, and for regulators to enforce the law”.

ASIC chair Joe Longo. Picture: Aaron Francis / The Australian

The new taskforce will begin in the first quarter of 2025, with members – drawn from the ranks of consumer advocates, business leaders and industry groups – to be announced in the New Year. “The focus has to be making the most difference as quickly as possible for consumers and investors, for businesses large and small and for directors,” Mr Longo said. “Although ASIC is just one agency, we have one of the broadest remits of any law enforcement agency. This means the way ASIC interprets and administers the law puts us in a unique position to help address the complexity we all face.”

He said effective regulation should not be an anchor holding Australia back. “If we continue on the path we’re on we will undermine how effectively consumers and investors can exercise their rights, and we risk a chilling effect on productivity and innovation as businesses struggle to decipher and anticipate regulatory requirements,” he said.

Mr Longo said he wanted the taskforce to build on the success ASIC had already had with improving efficiency, including how the watchdog develops guidance, uses its compulsory information gathering powers, and engages with stakeholders.

“While the focus of this regulatory simplification work will start with ASIC, through this process I expect we will gain insights and ideas for new mechanisms that can provide more analysis and recommendations for reform,” Mr Longo said. “Ultimately, we want to establish a consensus about what needs to be done, to ensure we tend towards simplicity for future regulatory development and implementation.”

Mr Longo said simplifying the system would not be an easy task, but he pointed to ASIC’s other regulatory and enforcement firsts – including the first court-imposed penalty for greenwashing, for example, and the first infringement notice issued to a market operator, the ASX.

“We also took down more than 7300 investment scam and phishing websites,” he said. “We highlighted shortcomings in the way lenders provide financial hardship support. And we’ve continued to address emerging regulatory challenges, including in relation to sustainable finance, crypto assets, and artificial intelligence technologies.”