Australia: ‘Big Bang’ — The Implications

Date01 March 1999
DOIhttps://doi.org/10.1108/eb025925
Pages79-82
Published date01 March 1999
AuthorGeorge Gilligan
Subject MatterAccounting & finance
Journal of Financial Crime Vol. 7 No. 1 International
INTERNATIONAL
Australia: 'Big Bang' The Implications
George Gilligan
The purpose of this paper is to provide some reflec-
tions on the Australian experience of 'Big Bang' reg-
ulatory reform. The analysis is confined to the recent
legislation passed on 1st July, 1998 and the reform
processes that fuelled these regulatory innovations.
AUSTRALIA'S NEW FINANCIAL
REGULATORY SYSTEM
First, it is sensible to name the major statutes and
briefly describe the most significant changes that
they bring as a regulatory package. The relevant
Acts which received Royal Assent on 29th June,
1998 and came into operation on 1st July, 1988 arc:
Australian Prudential Regulatory Authority Act
1998
Authorised Deposit-Taking Institutions Supervisory
Levy Imposition Act 1998
Authorised Non-operating Holdings Companies
Supervisory Levy Imposition Act 1998
Financial Institutions Supervisory Levies Collection
Act 1998
Financial Sector Reform (Amendments and Transi-
tional Provisions) Act 1998
Financial Sector (Shareholdings) Act 1998
General Insurance Supervisory Levy Imposition Act
1998
Life Insurance Supervisory Levy Imposition Act 1998
Payment Systems (Regulation) Act 1998
Retirement Savings Account Providers Supervisory
Levy Imposition Act 1998
Superannuation Supervisory Levy Imposition Act
1998
Company Law Review Act 1998
Managed Investments Act 1998
Taxation Laws Amendment (Company Law
Review) Act 1998.
Fourteen new statutory instruments is a pretty hefty
addition to the regulatory landscape and is part of
the juggernaut which is corporate law reform in
Australia. An integral part of the corporate law
reform process has been the ongoing Corporate
Law Economic Reform Program (CLERP), which
is discussed in more detail below.
The major feature of the new Australian financial
regulatory model is that it is a tripartite approach to
financial regulation, which has established:
(1) A single prudential supervisor, the Australian
Prudential Regulation Authority (APRA),
which has responsibility for the supervision of
banks,
life and general insurance companies and
superannuation funds. Other deposit-taking
institutions such as building societies, credit
unions and friendly societies are transferring to
APRA supervision from state-based control
during 1998. It is important to remember that
Australia has a federal system of government,
which has obvious ramifications for its regula-
tory systems.
(2) The Australian Securities Commission (ASC)
has become the Australian Securities and Invest-
ment Commission (ASIC). ASIC is responsible
for consumer protection and market integrity
across the financial system, including responsibil-
ity for investment, insurance and superannuation
products.
(3) The Reserve Bank retains responsibility for
monetary policy and the maintenance of finan-
cial stability, including the stability of the pay-
ments system.
The reforms introduced by the 14 new statutes repre-
sent a mini Big Bang, which the chairman of the
ASIC,
Mr Alan Cameron believes will have '... a
more significant impact on the market place than
did 1 January
1991'.1
The 1991 reforms had estab-
lished the ASC as Australia's first national regulator
of the securities industry, when the ASC assumed
and consolidated the regulatory responsibilities of
the various state-based Corporate Affairs Commis-
sions (CACs). The major difference between ASIC
Page 79

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT