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Economics Legislation Committee
10/04/2019
Estimates
TREASURY PORTFOLIO
Australian Securities and Investments Commission

Australian Securities and Investments Commission

[17:31]

CHAIR: Welcome, Mr Shipton and all the officers of ASIC. Thank you very much for joining us here this evening. Mr Shipton, you've got an opening statement but you are happy to table it?

Mr Shipton : Yes, Chair, if that's okay with you.

The statement read as follows—

Introduction

• Good evening Chair.

• On behalf of my colleagues, thank you for the opportunity to appear before this committee.

• Along with Deputy Chairs Daniel Crennan QC and Karen Chester, also joining me are Commissioners Danielle Press and John Price.

• Commissioners Cathie Armour and Sean Hughes apologise for being unable to appear tonight.

• We also have Executive Directors Greg Kirk, Michael Saadat, Tim Mullaly and Warren Day tonight. Our Chief Financial Officer, Emily Hodgson, also joins us.

Maintaining the momentum and the fairness imperative

• The Royal Commission has now finished. However, ASIC’s work in maintaining the momentum for reform and improvement in the financial services sector continues.

• As you know, ASIC’s focus is on making Australia’s financial system a fair, strong and efficient one for all Australians.

• And notably those three words - fair, strong and efficient - resonate well with a long-standing obligation of financial institutions under the Corporations law --- to act efficiently, honestly and fairly.

• Financial institutions now must embrace and embed in everything they do concepts of fairness for there to be meaningful cultural change in the industry.

• We welcome the Government's announcement of $400 million in additional funding to give effect to ASIC’s goals. We also welcome the Federal Court receiving $35 million to extend its jurisdiction to corporate crime. These are important building blocks for the enhancement of our regulatory work.

• The additional funding allows ASIC to:

o Give effect to our 'Why not litigate' enforcement strategy since it will allow us to significantly increase the number of

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cases we pursue and accelerate the speed of court-based enforcement outcomes;

o use the full extent of our new powers and penalties;

o embed and expand our new supervisory approaches ; and

o play our part in implementing the Government’s package of reforms and our new obligations and responsibilities following the Royal Commission. Importantly, this includes a proposed expanded role for ASIC to become the primary conduct regulator in superannuation.

• As mentioned, we are accelerating our court-based enforcement outcomes driven by our 'Why not litigate?’ stance. By way of update - from February 2018 to March 2019:

o there has been a 15% increase in the number of ASIC enforcement investigations;

o a 65% increase in enforcement investigations involving the big six (or their officers or subsidiary companies), and

o a 129% increase in wealth management investigations.

• Also, yesterday we released ASIC’s biannual overview of enforcement outcomes, priorities and cases during the period 1 July 2018 to 31 December 2018. With permission Chair, I seek to table that document.

• Deputy Chair Crennan can elaborate on our enforcement statistics further.

• ASIC also welcomes the recent passage through Parliament of key financial services reforms contained in the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation introducing:

o a design and distribution obligations regime for financial services firms; and

o a product intervention power for ASIC.

• We note this passage received extremely broad support in the Parliament.

• Together these new powers will enable ASIC to take more proactive action to improve standards and achieve fairer consumer outcomes in the financial services sector.

• Before I close, I would like to also briefly address some commentary to the effect that consumers are finding it harder to obtain credit, and that somehow the responsible lending obligations are contributing to this. This is not true.

• We have been administering the credit laws that have been in place for nearly a decade. These laws are eminently sensible, and there have been no changes to the core responsible lending obligations since they were first enacted. Nor has there been any change to our advocacy that lenders put these legal principles into practice reasonably and fairly. We understand house prices have fallen in some areas, and as a result fewer consumers are seeking finance. However, as the Governor of the Reserve Bank recently noted, this ‘demand side’ factor appears to be the principle contributing factor to current market conditions.

• It is also important not to confuse our new enforcement posture with responsible lending laws. Australians need to have confidence that fundamental consumer protections are being enforced. ASIC has been reviewing industry practices for many years, and particularly since 2016 - and well before recent changes in market conditions - we (alongside APRA) have observed much improved lending standards.

• I will also highlight here that because the laws are principles-based they are adaptable to changing technology. New data sources such as open banking will be a game changer: they will make it much easier for lenders to verify consumers’ financial situation. Against this backdrop, ASIC has recently commenced a public consultation to update our guidance on responsible lending. The responsible provision of credit is critical to the Australian economy.

Conclusion

• In closing, I would like to reiterate what I have said recently - meaningful change is the ultimate responsibility of financial institutions. Financial institutions must respond responsibly to the challenge.

• Chair, lastly I would also like to recognise that this is ASIC’s last Estimates with Senator John Williams. Over the years, ASIC has had much engagement with Senator Williams - some of it particularly robust. But that has been, in the end, very fruitful for ASIC as Senator Williams has been a true advocate of a fair, strong and efficient financial system for all Australians. Thank you Senator for your service and all the best for the future.

• Chair, we are now ready to take your questions.

CHAIR: Thank you. Senator Williams.

Senator WILLIAMS: I welcome everyone from ASIC. This is probably the last time I will see you at estimates. That's not your fault! Mr Price, complaints have come to my office about a company called Henry Morgan. People are fearful that they are losing their investments et cetera. Do you know anything about Henry Morgan?

Mr Price : Henry Morgan and associated companies are known to us. In fact, not so long ago, there was a series of takeover panel applications where we made various submissions. We have an interest in the Henry Morgan group of companies in relation to various other matters, and we are making inquiries about those companies at the moment.

Senator WILLIAMS: All right, I will leave it at that. Mr Shipton, you would be aware of an inquiry we have just completed into the franchising industry. Recommendation 4.2 of the inquiry report states:

Recommendation 4.2

4.76 The committee recommends that the Australian Competition and Consumer Commission, the Australian Securities and Investments Commission and the Australian Tax Office, conduct investigations into the operations and dealings of Retail Food Group, its former and current directors and senior executives and companies and trusts they own, direct, manage or hold a beneficial interest in, with regard to matters including, but not limited to, the Australian Consumer Law, the Franchising Code of Conduct, insider trading, short selling, market disclosure obligations (including related party obligations), compliance with directors' duties, audit quality, valuation of assets (including goodwill), and tax avoidance.

You are familiar with that recommendation?

Mr Shipton : Yes, I am.

Senator WILLIAMS: Has ASIC taken any action in regard to that as yet, or are you preparing to look at the situation?

Mr Shipton : We are certainly looking at the situation. My colleague Commissioner Price has further detail on this that he can expand on.

Mr Price : We certainly take those recommendations from the Parliamentary Joint Committee on Corporations and Financial Services very seriously. We are treating those as a report of misconduct. Mr Day's team is looking into those issues at the moment. Our focus, of course, is limited to the matters that are within our jurisdiction—related party transactions, market matters, directors duties and audit issues—but we certainly have a range of inquiries underway in respect of those issues that were referred to us from the Parliamentary Joint Committee on Corporations and Financial Services.

Senator WILLIAMS: Senator Ketter was on the committee with me. I'm sure he would agree with me that the witnesses know that the previous management were not impressive to the committee—if I can put that in a rather smooth way. Mr Shipton, I have one further question. How do you see resources and funding for ASIC?

Mr Shipton : Very positively. We are grateful for the government's announcements of funding towards ASIC moving forward. This is a significant increase. This will allow us really to focus in on those initiatives that I mentioned earlier relating to our enforcement posture and the creation of the Office of Enforcement that my colleague Deputy Chair Crennan can speak to if there are further questions. We can also start work on expanding our new supervisory approaches. Very importantly, there are a number of recommendations coming out of the royal commission and indeed the government and indeed other parliamentary committees—as you mentioned earlier, Senator—that will allow us to take on additional responsibilities which are expected of us by the parliament and, importantly, by the community.

Senator WILLIAMS: Goodo. Good luck in the future. I hope you do your job well and I hope you're successful in cleaning up the bit of a mess, as I can call it after the Royal Commission. You're very familiar with it. I just wish you well in the future.

Mr Shipton : Madam Chair, with your indulgence, may I just make a remark to Senator Williams?

CHAIR: Please.

Mr Shipton : Senator, thank you very much for your ongoing oversight of ASIC over many years and your commitment to the community and ensuring that we have a fair, strong and efficient financial system for Australians. Your work and advocacy has been significant. Importantly, you've held this organisation and this agency to account, and we are a better agency because of you and your colleagues on committees like this. Thank you very much, Senator.

Senator WILLIAMS: Thank you very much.

Senator Seselja: Wacka, I doubt you'll be asking me questions tomorrow, so can I just, on my own behalf and the government's behalf, echo those comments but also particularly wish you well in your retirement, mate, back on the farm. I hope you have some great times. I really honour the work you've done over many, many years fighting for the underdog, for your community and for regional Australia. So well done, mate.

CHAIR: Hear, hear!

Senator WILLIAMS: Thank you, Minister. I appreciate it very much. Good luck, everyone.

CHAIR: Thank you.

Senator KETTER: Good luck to you, Senator Williams. Senator McAllister will lead off for us.

Senator McALLISTER: At the last estimates, I had an exchange with Ms Armour, who I think is not here today.

Mr Shipton : Unfortunately, she had to send her apologies. She is overseas on business.

Senator McALLISTER: That's okay. You may be able to assist in any case. She gave evidence. She said:

There is a law we administer that actually does require that—so we could bring action if there is a misleading statement made to the ASX.

We were talking about the disclosure obligations of companies. Which part of the act was she referring to?

Mr Price : There are a range of provisions that deal with misleading or deceptive statements, under both the Corporations Act and the ASIC Act. Section 1041H of the Corporations Act, from memory, is one example. There are provisions in the ASIC Act around section 12, although I can't recall the exact numbers. If you're talking about prospectuses, there are specific provisions there if you're thinking about continuous disclosure announcements.

Senator McALLISTER: That is exactly what we were discussing.

Mr Price : For continuous disclosure announcements, there are various provisions around section 674 and 675 of the Corporations Act. Again, that's off the top of my head. I'd need to go away and check it.

Senator McALLISTER: Thank you. At the time, Ms Armour undertook to provide advice about the penalty range associated with the breach of those obligations—both the civil and criminal penalties available. I wonder if ASIC can provide that information now.

Mr Crennan : I can provide some of it. Section 674(2A) is the provision that captures the individual contravener. It's actually entitled 'an offence', but it's both civil and criminal. Section 674(2) is the provision which captures the entity, and that's a civil penalty provision. Section 675 is the section which captures a non-listed entity, so an entity that is public but unlisted. That's actually administered by ASIC in the sense that—unlike 674 and 674(2A), where the disclosure is required to be made to the ASX—because these companies are not on the ASX, they make it to us and we publish it. So that's the way that part of the act works. I haven't got it with me; I apologise. As for the penalties, I would have to take that on notice as to the quantum of the maximum penalties. We may be able to dig that out now.

Senator McALLISTER: As part of that discussion last time we were discussing the Helloworld scandal. At that time they had made one statement to the ASX, which was titled 'Clarification of media reports'. They made that statement on 20 February. Since that time they've made two more statements in relation to the matter. There was one on 21 February titled 'Statement from Helloworld Travel CEO Andrew Burnes' and then 'Corrections and statement of regret' in The Sydney Morning Herald and The Age on 25 February—so, a series of disclosures. At the time Ms Armour gave evidence that the committee would follow-up with Helloworld to ascertain the accuracy of the statements they had made, which at that time was only the first of those three statements. Did that follow-up happen?

Mr Price : Yes, it did, and there were, of course, the media reports to which you are referring—that the US ambassador may have used his position to help Helloworld to win a government contract. That was the allegation. Both the US Ambassador and Helloworld publicly refuted the claims and the media outlets subsequently acknowledged inaccuracies in their initial reports and expressed regret in respect of those inaccuracies. We did make inquiries into the veracity of the claims. We examined trading in Helloworld shares and we reviewed market disclosures in respect of the first announcement and we have not found any evidence of misconduct. In respect of the subsequent announcements that you have mentioned this evening, I would like to take some further advice from ASIC staff about whether we looked at those subsequent announcements that you have identified.

Senator McALLISTER: Essentially, your inquiry involved an examination of the public statements and an examination of the share movements around the time of the statements. Are there any other elements of the investigation, in terms of how you go about such an inquiry?

Mr Price : What we typically do is look at trading data. We'll look at various information that's been provided to the market. We may on occasion speak with the market operator. We may exercise compulsory notices to obtain documents, where we think that is necessary. It really depends on the facts and circumstances of each case. I would rather not go into the particular detail of what we have done. One particular thing, though, I did want to clarify: I think I said earlier that the media reports were that the US ambassador may have used his position to help Helloworld. Of course, I was referring to the ambassador for the US, not a US citizen—just as a point of clarification.

Senator McALLISTER: Thanks, Mr Price. Just in terms of the process, this is a precursor to formal inquiries. You have a kind of hierarchy of investigations internally in terms of your compliance practice? Could you step me through that?

Mr Price : Whenever we receive a report of misconduct, there are a variety of paths that we can take. When we are talking about market misconduct, often we would liaise with the market operator—in this case that's ASX. We would consider whether or not we need to utilise compulsory powers. If we do need to utilise compulsory powers, there are a range of provisions we can do that under. We can consider in some cases setting up an investigation under section 13 of the ASIC Act, which provides us with the ability to utilise additional compulsory powers. Sometimes that's necessary and sometimes it's not. As a matter of course with these sorts of things, we'd also typically have a look at trading data. We get real-time feeds of trading and other data from a variety of sources and we use both computerised means and also human judgement to indicate whether there are any unusual aspects in the trading in respect of those matters. It really does depend on the case. As you mentioned, we have a hierarchy of powers and we tailor those, as needed, in each particular case.

Senator McALLISTER: Did you use any of your compulsory information gathering powers in this instance?

Mr Price : I'd prefer not to go into that detail at this stage, but I'm more than happy to take that question on notice.

Senator McALLISTER: Did you seek assurance from Helloworld that their statement to the ASX was accurate?

Mr Price : Again, I'm happy to take that question on notice.

Senator McALLISTER: Did Helloworld provide ASIC any assurances that their statements were accurate?

Mr Price : Again, on the exact detail of how we conduct this type of work, it's atypical for us to get into that level of detail, but, if the question is provided on notice, we can consider what information we can provide.

Senator McALLISTER: Did you ask for documents from Helloworld?

Mr Price : Again, I don't want to get into the detail of particular instances, but it's not uncommon for us to seek documents or obtain documents from various firms subject to inquiries.

Senator McALLISTER: Did you interview anyone?

Mr Price : I'll take that on notice.

Senator McALLISTER: The CEO?

Mr Price : I'll take it on notice.

Senator McALLISTER: Is ASIC undertaking any further inquiries in relation to this matter?

Mr Price : Not at this stage. As I say, we've obtained a range of information and we've reviewed a range of documents. At this stage, that's not indicating any misconduct. Of course, if there's other information that we do not have or have not had access to or there are fresh allegations, we're always happy to review that as part of the work we do.

Senator McALLISTER: I was going to ask you the same thing: have there been any other statements provided to ASIC or to the ASX that have not been made public?

Mr Price : Not that I'm aware, but, again, I'd like to take that on notice.

Senator McALLISTER: If there have been, could they please be tabled?

Mr Price : Again, if I could take that on notice, that'd be good.

Senator McALLISTER: Has ASIC prepared a written report into this matter?

Mr Price : An internal report; an external report—what are you considering?

Senator McALLISTER: Any written report, internal or external, in relation to this matter.

Mr Price : Again, I'd like to take that on notice, if I may.

Senator McALLISTER: Could that please be tabled?

Mr Price : Again, I will take that on notice. In tabling written documents, there can be various issues around public interest, and I think it's important we consider those.

Senator McALLISTER: Thanks, Mr Price.

Senator SINODINOS: The public interest here is to smear the company. Let's be quite open about that. That's why this matter is being reheated in this way in this chamber.

Senator McALLISTER: Senator Sinodinos, I think it's in the public interest—all of the matters in relation to Helloworld. If you don't think so, that's a clear difference of opinion between you and me, but that's just a gratuitous political comment. I asked some pretty straight questions. Mr Price has given a range of indications that he's taking things on notice and has explained the reasons why he is doing that. I haven't contested that or sought to make a fuss about it. I don't know why you would.

CHAIR: Thank you, Senator McAllister. I have a couple of questions. I'm not entirely sure where I should direct them, but, when we last saw you at estimates, you still had something of a wish list of legislation to be passed. Since that time, we've seen the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill passed, which gives you new disgorgement powers and strengthens penalties. We've seen the design and distribution obligations and the product intervention powers passed. I wonder whether you could give us the Reader's Digest version of how they make your lives that little bit easier in the tasks that you have been set out to do.

Mr Shipton : Thank you for the question. I will start and then hand over to some of my colleagues, who can speak to some of the new powers and penalties with greater specificity. But, taken together, these new powers and penalties, combined with the budget, are very powerful and will enable us to be more effective and efficient in our regulatory output. We have been long advocating for these powers and long advocating for these penalties, so they are very welcomed. I will acknowledge that I understand that they had overwhelming support in the parliament, and we are very grateful to the parliament for the support of these various pieces of legislation.

Perhaps I could just focus in for a second on the penalties. It is very clear to us that we need to provide meaningful deterrents for illegal, wrong and unfair behaviour in the market. For us to have effective and meaningful deterrents we need meaningful penalties. The penalty in particular around the fair, honest and efficient provision of section 912A of the Corporations Act is a cornerstone provision. Prior to these amendments, prior to these new acts, there was no penalty for that important provision. There was no penalty for that cornerstone provision to enable or require honest, efficient and fair conduct of financial services businesses in Australia. We now have meaningful deterrents; we now have meaningful penalties, and part of our enforcement priority moving forward will be to pursue cases of this nature.

The design and distribution powers, the product intervention powers: these are really important tools that we've been looking at that have been utilised overseas for quite some time. They will allow us to more directly and more quickly intervene when we see detriment happening in the market to consumers. Now, 'detriment' is a legal word that I personally believe connotes issues of fairness, and fairness is something that we believe should be a priority for the entire financial system. But I'm going to pause there and perhaps ask my colleagues Dan Crennan and Greg Kirk to supplement.

Mr Crennan : I might just make a few remarks on the penalties. Without indulging in an exegesis as to general deterrents, I think it's well understood that higher levels of financial penalties and longer terms of custodial sentences are important in affecting general deterrence. If they're not used, of course, that effect diminishes. In terms of 912A, as Mr Shipton says, that does contain cornerstone obligations owed by those that benefit from having an Australian financial services licence to the consumers of those services and therefore to all citizens of Australia. It has been in the legislation for some years—I think 14, off the top of my head—that that particular obligation, the fairness and efficiency and so on, has been subject to some judicial observations in recent years. We have brought some cases when coupled with other contraventions that warrant the case going to court, because there's not much purpose in bringing a 912A case when there's nothing to seek other than a declaration, using public funds to do so. However, Justices Beach, Foster and Gleeson, all of the Federal Court, have in recent years—and very recently—made the observation that it's a composite obligation. So, those three words need to be read together. They are simple English words, and they express simple human concepts.

There is work being done on explaining that further, perhaps. There seems to be an indication from the regulated community via the media that fairness is difficult to understand. I won't make any rude remarks about that narrative. However, Justice Beach certainly says that this is a very simple human concept and should be very easy to understand. The notion that that legal obligation, which has been in the legislation for well over a decade, wasn't important to those it was designed to regulate or designed to be observed by, because there was no consequence, is quite revealing. That is why the penalties bill was so important to us—because now there are consequences, and quite significant civil penalty consequences. Moreover, with 912D, the obligation to report, that is no longer only a criminal consequence; it's a civil penalty. So, you're dealing with a different burden of proof, and that also assists us greatly.

I won't take up too much more time, because there are a lot of other amendments, but I should also make the observation that the recent passing of the member outcomes bill in relation to superannuation will become quite important to us if recommendation 6.4 by the royal commission is implemented, thereby making us a conduct regulator of the CIS act. The reason that is very important is that, firstly, that is our bread and butter, so to speak. That is part of the purpose of ASIC's existence, and it's a very significant part of our operations—that is, conduct regulation. We have very limited ability under the current SIS Act to engage any regulation of that particular regulated community. With the introduction of that bill, for the first time, civil penalties will attach to sections 52 and 52A. Section 52 is the trustee obligations. Section 52A is the director of the corporate trustee obligations. There are also cornerstone obligations that include, for example, acting in the best interests of the beneficiaries—in other words, members. They lacked any penalties. Now they have a civil penalty, which means, particularly under section 193, they will incur penalties if they're contravened.

Secondly, under certain factorial scenarios where there has been dishonesty—and there are a few other locutions of how this section is engaged—in section 202 of that act, they will be criminal offences. This is a very significant seismic change in terms of the legislative framework where the regulators will be acting. With APRA, if we are a co-regulator, so to speak, we will also be the conduct regulator of those very significant sections which have recently also passed.

CHAIR: So that could mean that trustees of superannuation funds that have been consistently—I know I'm wading into Ms Chester's previous life—underperforming are potentially up for not just civil penalties but criminal penalties. Is that what you're saying?

Mr Crennan : The underperforming may not warrant the criminal penalties. The criminal penalties only get engaged in the in extremis fraudulent examples where a third party, for example, is deliberately benefiting contrary to the interests of the members. That's one scenario. I should also say that many of the trustees are AFSL holders in any event, so if we do become a conduct regulator they may very well be facing 912A cases and sections 52 or 52A cases. So there will be a great legislative tool kit for us as a regulator to use in the superannuation space if that recommendation is implemented.

CHAIR: And trustees of persistently underperforming superannuation funds will fall under your 'why not litigate' mantra.

Mr Crennan : One would hope so, if we become a conduct regulator. I'll hand over to Ms Chester to elaborate, but we do have the machinery that is possible to go after a persistently underperforming fund. However, if we become the conduct regulator of the SIS Act, it'll be more fit for purpose.

Ms Chester : That's correct. Us having those powers under the SIS Act is a game changer for ASIC in terms of being the conduct regulator and introducing for the first time true deterrence conduct regulation in the super space. The persistence underperformance, given that some robust methodology was well established by the Productivity Commission, does see the way clear as to how that can be demonstrated. The key point is that we can get enforcement action underway before that other legislative change occurs to the SIS Act under section 912A, particularly now that there's meaningful penalty attached to it, given that most superannuation trustees hold an AFSL. If you hold an AFSL under that provision of the Corporations Law, you have the obligation to act fairly, honestly and efficiently in the provision of those services. That's what was intimated more recently at the AFR Banking & Wealth Summit but, in an ideal world, doing it under the SIS Act gives us much more muscle to be able to help the government weed out the persistent underperformance that is causing members great harm. That's the lens we'll be bringing to this, informed by both the royal commission and the work of the Productivity Commission. Where is the greatest harm to members, and how does that relate to misconduct so we can take some good cases forward for that deterrence effect?

CHAIR: Thank you. I know we haven't quite got into the design distribution obligation or the product intervention powers. I don't know whether you want to—

Mr Crennan : I'd ask Mr Kirk that. Both those new obligations are things that ASIC's advocated for for some time. I think starting during the financial system inquiry something that was recommended then are very important changes in terms of the overall toolkit for ASIC as a regulator. They really are part of shifting the focus from the Wallis inquiry settings, which were all about disclosure and which assumed the remedy to any problem in the financial system was either better or more disclosure. Really, the focus in the design and distribution obligations becomes much more a focus on those manufacturing products and then distributing them to really target them towards those sectors of the market that they're appropriate for and not to target them to people who they're not suitable for or, to do scattergun or just market Wide Bay as if it's really only a product suitable for particular people in particular circumstances.

So that broad obligation is a very important one and a big shift in terms of responsibilities on industry. Given the significance of that change, they're given a two-year transition period so there's time for industry to adjust and look at how they're going to meet the obligations in terms of the appropriate identification of the target market for their products and then how they would guide distribution towards that target market.

The second provision, which is the product intervention power, is something more directly given to ASIC and, again, that moves away from a focus on disclosure to giving ASIC a broad flexible tool to address failures in the market and problems that are arising, despite the fact that disclosure's taking place, where there are adverse outcomes for consumers and to address them in a flexible way. Sometimes that might still be improvements in disclosure but, in other instances, it might be other changes to the way the product is marketed or in the most severe cases that I think are probably relatively rarely the banning of the sale of the particular product.

CHAIR: The impression that I have now is that in the last 12 to 18 months ASIC has been given the resourcing, the enforcement powers and every tool that is now required in order to do the job ahead of you, which, I might add, is a substantial one, particularly post Hayne royal commission. Before I turn over to Senator Ketter, can you tell me whether there is anything more that you need specifically in your toolkit in order to undertake your duties.

Mr Shipton : Thank you for that summary. Yes, we feel in a very confident position moving forward for the task ahead. We now have a mantra in our organisation and our agency of just getting on with it. That's going to be a core priority because there is community expectation that we need to get on with our important regulatory work but, as my deputy chair colleagues have highlighted, there are a number of proposals that are coming out of the royal commission that have come out of the Productivity Commission that we would very much like to work with parliament on, moving forward.

I would also make a pitch, which is a recommendation which has been taken up, I believe, by government and others, as to the extension of the BEAR agreement, the accountability regime for executive officers into the world of conduct. Just by sheer force of numbers, the proposal will capture and make accountable tens of thousands of men and women in finance who hold important positions and they will be accountable under the law under the proposed extension of the BEAR regime. So that is something that I would highlight as an important next step, and of course we very much look forward to working with parliament into the future and with committees like this into, hopefully, getting meaningful and effective legislation before you.

CHAIR: Thank you, Mr Shipton. Senator Ketter.

Senator KETTER: Mr Shipton, firstly, can I just quickly get an update from you on the work by ASIC in respect of the aftermath of the royal commission, particularly what progress has been made on the referrals made by the royal commission to ASIC for investigation of potential criminal offences. The last report I received at the end of February said you were prioritising 13 referrals from the commission and your enforcement team was investigating a further 12 matters that featured as case studies. What's the latest?

Mr Shipton : Before I hand over to my colleague executive director Tim Mullaly, who is the executive director responsible for our royal commission referral's response, let me just start by saying there is a body of work that we are doing in relation to the royal commission both by way of policy and by way of other regulatory outcomes. But your specific question is in relation to both the referrals, as I understand it, and also case studies that were mentioned in the royal commissioner's report, which are indeed being prioritised, and I shall ask my colleague to supplement.

Mr Mullaly : Currently in that project, there are now approximately 90 investigations afoot. Since September, that's an increase of 45 investigations and, since this time last year, it's about 129, 130 per cent increase in the number that we had on at that time, so it is a significant amount. There are currently 14 matters in litigation with six of those being civil penalty matters, two of those are criminal matters and then there are six administrative banning matters, four of which are appeals before the Administrative Appeals Tribunals or the Federal Court. We've got two other matters that we've referred off for action, one being a criminal matter and one being an administrative banning matter, and then 60 matters that are under investigation and they are at different stages.

Senator KETTER: I was interested specifically in the referrals from the royal commission?

Mr Mullaly : They are being assessed to see whether or not those matters need further investigation or they are in fact under investigation, so those are the referrals from the royal commission.

Senator KETTER: Just again, how many are there?

Mr Mullaly : My recollection was that there are 13 matters that we got from the final royal commission report, and then there were, as mentioned, 14 or so case studies that we identified. You need to understand it's a big body of work. We're getting breach reports that come in and we're getting other matters that we're identifying ourselves through surveillance work or through the investigations that we're doing that touch upon matters that were raised at the royal commission or relate to some of the parties that were before the royal commission, and that's all part of this sort of body of work. We're prioritising those matters that we think need to be prioritised for their seriousness for the outcomes that we'll get. We've said on previous occasions that some of the matters that were referred to us out of the royal commission would not result in penalties per se because of the nature of the allegations made. We're weighing those up against matters where we will either get civil penalty or potentially criminal matters.

Senator KETTER: At what stage of an investigation with these referrals is the financial service provider made aware that they are under investigation?

Mr Mullaly : That will depend on the nature of the investigation but, generally, pretty early we will serve compulsory notices on those entities and those notices will indicate the nature of our inquiries or investigations and they'll have an understanding at that point.

Senator KETTER: And how many of the investigations have reached that stage?

Mr Mullaly : I would say, at a minimum, of those 90, 76 approximately. There are 14 or so matters out of that 90 that are in a form of pre-assessment, pre-investigation stage. We're looking at other material that's available to us to determine what our next steps would be.

Senator KETTER: And have all the relevant financial service providers been contacted to notify them that they are under investigation?

Mr Mullaly : I couldn't say, without going and looking at each and every investigation, whether or not they've received notices. But, as I say, of the investigations within the wealth management project, I would imagine, approximately 75 would have been given some form of notification because the investigations have progressed to some extent.

Senator KETTER: And given the degree of public interest in this issue, with the work of the royal commission being carried on, do you have a target as to when you wish to finalise these referrals, at least to the extent of deciding whether or not to proceed with criminal prosecution or civil action against the relevant entities?

Mr Mullaly : Not in relation to all of them. We haven't set those sorts of targets in relation to all of them. We recognise that there's a significant public interest in us finalising our work as quickly as possible, but the matters of this nature have varying degrees of complexity, which sometimes makes it difficult to say we will have it done by a particular date. For example, as has been in the public domain, we've got a significant investigation in relation to fees for no service arising out of the conduct at AMP. We would have liked to be further progressed in relation to that, but we had to go through a civil case in relation to AMP around the production of information that they claimed LPP on. Those sorts of things inevitably delay us getting to the end result. Setting targets can sometimes be frustrated by that sort of action, but we do like to prioritise matters, and we do have in place a prioritisation exercise which is aiming to get a number of matters finalised by mid-May and a further number by 30 June this year.

Mr Shipton : If I may supplement that, the commission, as the lead governance body of this agency, takes a tremendous amount of interest in the progress of these cases. So we have a governance structure that sits on top of this important work which is monitoring not just the speed but also the efficiency and the effectiveness.

I'd also pick up on something that my colleague mentioned, which is the terms of engagement, as it were, by some of the entities that we are investigating. I think it's very important that they act fairly and responsibly, because, of course, that is our intent as well.

Senator KETTER: Thank you for that. I want to move on to another matter.

Mr Mullaly : Just for the record—because I know it came up last time—at the moment there are approximately 70 FTE working solely in relation to this project. I think last time it was somewhere around 45. So we're trying to ramp it up. I should also say that is supported and supplemented by external resources—external law firms, barristers et cetera. That includes staff from a range of teams within ASIC. Within financial services enforcement, there are about 131 FTE that are available to work on these matters. So we try to keep it pretty flexible, with an agile sort of approach to it. We recognise there's a public interest in getting it done, and we're trying to get it done as quickly as we can. 'FTE' refers to full-time equivalent.

Senator KETTER: Thank you. Mr Shipton, I want to move on to another matter, which was some recent media commentary which was quite extraordinary. It was reported that there were some unnamed senior bankers who claimed that ASIC is on a frolic, and I note that you took vehement exception to that. It appears that some of these people don't get it. So why do you think these senior bankers have made this comments?

Mr Shipton : Thank you for the question, because it raises an important point. To clarify and to be fair to the unnamed senior banker, though, he or she didn't use the word 'frolic.' I think that was an expression I used, saying that we're not on a frolic. But the point that you make is nonetheless an important one.

I have a couple of observations, if I may. I actually calculated the number of days between the final report of the royal commission and these press reports, and it was less than 50. It was very disheartening that, within 50 days of this very important document and almost universal support for the direction of travel within it, we were getting this resistance and pushback. My colleague Deputy Chair Crennan has made some very useful remarks about how we expect the industry to engage constructively with us in relation to these enforcement matters. We are not saying for one second that they should abandon their legal rights, but there is a scope for constructive engagement when we come to our investigations and our court based enforcement actions.

It is very disheartening, and I was very quick at my first public remark to call out that these comments are ultimately unhelpful and destructive, because they do not represent the constructive engagement that we want to have. It also reflects, I think, a mindset in some, not all, segments of the financial services industry that they do not realise that there is a trust deficit and a need for them to prioritise fair outcomes for consumers and also to make our financial system just better and stronger.

There is also a risk that, with the royal commission coming to an end, some of these segments of resistance, these pockets of resistance, will see it as business as usual. You can have our assurance on behalf of our agency—and I'm sure I speak equally for our peer regulatory agencies—that our intent is to carry on the important work of making sure that we do make the financial system a fair, strong and efficient one and impress upon the leaders of the financial system that they need to prioritise fairness, they need to prioritise honesty and they need to prioritise constructive engagement with regulators and, indeed, parliamentary committees.

Senator KETTER: I note that even Ms Bligh from the Banking Association said in this article:

I don't doubt there are people at those senior levels who are saying those type of things.

Let's assume it is middle management where the issue is predominant. Do you think there is sufficient understanding within the chain of command in the banks about the significance of the cultural and compliance reforms that are necessary to prevent this misconduct from occurring again?

Mr Shipton : I think it is work in progress, Senator. I think your question is very astute, because it is work in progress. There are hundreds of thousands of people who work in finance, and we need to get a message through to all of them that, if they are doing their job fairly, if they are working within the guidelines that are set appropriately for them in financial institutions, they have a very noble and important job to do, which does benefit society, which does benefit the community. What we need to do—and this is what we are actively doing in our agency—is constructively engaging with the senior leadership group about the importance of cascading down throughout their organisations and through their organisations the importance of constructive engagements with regulators, the principles of fairness and honesty, and putting the consumer and the customer and the system first.

I'd also highlight—and this an area that we're going to be expanding in the future—that our close and continuous monitoring program has been very effective because it has started to engage with that middle management rank, with that cohort, not only at the senior management rank but throughout the system. We want to expand that because we want the message to get through to middle management and, indeed, everybody throughout the organisation that, ultimately, ASIC is an organisation that wants to put fairness back into finance. We want that message to cascade through organisations, and we're going to do what we can by that engagement at the senior level. We're going to do that by our engagement through close and continuous monitoring. We're having hundreds of meetings now with middle management that we didn't have to the same degree of intensity before. Importantly, as I mentioned earlier in my comments about the extension of BEAR, the extension of BEAR into conduct will attach to tens of thousands of people in finance. Having them accountable and having them realise that they're accountable will be a very strong net positive for that cultural challenge that you rightly highlight.

Senator KETTER: Just coming back to the royal commission referrals again, Mr Mullaly, are there any documents that you can table about the timetable or targets for when you'd like to reach particular milestones in relation to any of the matters referred by the royal commission—for example, targets for when you'd like to have made the decision on whether to litigate?

Mr Mullaly : I'd have to take that on notice to see what documents might be specific to that.

Senator KETTER: Thank you.

Mr Mullaly : I'm not sure that we've prepared a document of that type.

Senator KETTER: That would be good. I've got two other areas I'd like to explore. Ms Chester, I'd like to turn to some of the comments you made at the AFR summit on 26 March. There was some media reporting about those. Firstly, can you tell me whether you prepared any speaking notes or papers in preparation for your appearance?

Ms Chester : Yes, I did.

Senator KETTER: What were the points that you wanted to communicate at the summit?

Ms Chester : They sort of expanded on the comments I made earlier—that is, the royal commission and the government's response to the royal commission have asked ASIC now to be the lead conduct regulator with respect to superannuation. So it was reminding folk that in being that strategic conduct regulator we will bring the lens of member harm. It was revisiting the good evidence base that we could draw upon from the work of the royal commission and the work of the Productivity Commission to remind folk of what that member harm was and what the primary areas of concern remain and to also signal that ASIC was stepping up to that plate immediately. As intimated before, there are some current provisions of the corporations law, now with meaningful penalties attached, that we can use if we would like to get that enforcement action underway before the more important and fulsome legislative reform through the SIS Act.

Senator KETTER: I'm just interested in what discussions you had prior to 26 March with other ASIC staff on what you were about to say. Did you speak to Mr Shipton?

Ms Chester : Mr Shipton was aware that I would be talking about super through that lens, and I of course had some internal discussions with fellow commissioner Danielle Press before she went overseas and a couple of other colleagues in the wealth management area that specialise in super.

Senator KETTER: And you conveyed to those other ASIC colleagues this comment, 'We are looking to litigate if a fund has a persistently underperforming product or they themselves have consistently underperformed over the long term'? That's a matter you discussed with ASIC colleagues beforehand?

Ms Chester : Yes. I think it was clear from earlier work by both the royal commission and the Productivity Commission that an area of members' best interest is clearly being breached if a superannuation fund has knowingly or unknowingly persistently underperformed—and we're talking about over the long term—their own portfolio benchmark by 50 basis points. There is an issue then. There could be other elements of misconduct that could be attached to that underperformance—related parties, for example, or trustee directors not discharging their duties—but, for us, that was a clear area of member harm where we would want to be seen to be deterring any of that related misconduct either under the corporations law before the other legislative reform occurs or ideally once the SIS Act legislative reform has taken place.

Senator KETTER: Did you speak to Mr Crennan beforehand?

Ms Chester : Yes, I did.

Senator KETTER: What was the nature of the conversation? Was it about that specific point about looking to litigate?

Ms Chester : Yes.

Senator KETTER: I think you mentioned you had spoken to Ms Press and Mr Price?

Ms Chester : No, I don't recall any discussions with Commissioner Price.

Senator KETTER: Did you speak to your media, corporate affairs or government relations team?

Ms Chester : When we're looking at doing panel addresses at a forum like the AFR Banking & Wealth Summit, we of course have discussions internally for several reasons. One is to make sure that everyone is on the same page in terms of what we're going to be saying at these forums. But, secondly and particularly, we're in the world of pre- and post-legislative reform. We have had some legislative reform to the Corporations Act which now means that there are meaningful penalties attached to 912A and there is a prospect that we could pursue enforcement action if we were to identify an appropriate superannuation fund or trustees where there is persistent underperformance over the longer term and there might be some other misconduct attached to that. These are all the sorts of things that we would normally talk about before we made such speeches. It's then a separate matter to internally go through our governance structures, which Chairman Shipton referred to before, to decide which matters we would look to pursue with which parties.

Senator KETTER: Did you speak to anyone in APRA before your appearance at the AFR summit?

Ms Chester : We do, as a matter of professional courtesy, give our brethren a heads-up in terms of what we're looking to say at a high level. I was also very cognisant that member Rowell was speaking the next day and early in the morning.

Senator KETTER: So you spoke with Ms Rowell about this particular issue prior to your comments?

Ms Chester : I had a high-level discussion with Ms Rowell about the nature of the comments that I was looking to make on the panel, if the planets did align and I got appropriate questions on the panel to be able to respond along those lines.

Senator KETTER: Did you have to clear any of your final speaking notes before appearing at the AFR summit?

Ms Chester : What do you mean by 'clear'?

Senator KETTER: Was there an approval process for the speaking notes that you used for the AFR summit?

Ms Chester : The clearance process was: my notes were fact checked following the discussion, so folk knew what direction I was heading in with the commentary I was looking to make. But they were fact checked by two of the specialist people in the super team to make sure that what I was saying, particularly with respect to the legislative issues, was correct.

Senator KETTER: Okay. Mr Shipton, what's the normal process in circumstances where ASIC leaders are appearing in public, in terms of being cleared to make certain comments?

Mr Shipton : Well, as Deputy Chair Chester was referring to, we consult with each other when it comes to the matters which we're going to speak to. I will make an observation that there is a structural difference between a panel, which is Q&A—and my observation of these types of panels, question-and-answer panels, is that they have a life of their own, and comments that may be prepared in advance aren't necessarily deployed when you get up on the stage—and speeches at a different level. So we consult as a commission, as the deputy chair mentioned. We've also put in place a structure whereby we review what speeches or public forums we are engaging in in the future, and we have a discussion in and around messages and the points that we want to deploy, particularly in speeches and, if we get an opportunity, during panels. That is a process of collegiality and engagement. And we also, as I said, have a structure whereby we capture and note what types of speeches or public engagements are coming, so that we can actively monitor them.

There is a chain of command in our organisation. There is a hierarchy. Executive directors will consult with sponsoring commissioners, when it comes to engagements by staff and my colleagues, on technical matters and, if there are messages that need to be cleared, they would be cleared or ventilated through that chain of command and the governance structures that I mentioned.

Senator KETTER: Okay. The normal processes of clearing comments: you're saying that they were followed in this particular situation?

Mr Shipton : Yes, I believe that they were followed. There was consultation. You must remember, again, that I spoke at this particular conference. What I did was to circulate my remarks, or draft remarks, with the commissioners. I actively sought input from my fellow commissioners and colleagues as to what messages we wanted to take across.

As I said, when it comes to panels—Deputy Chair Crennan was also in a panel at that particular conference—we did discuss and confer about the important messages that we wanted to impart to the industry and the sector about the types of matters that we would pursue in the future. But I do want to underline and reinforce what Deputy Chair Chester said: that should in no way be taken to fetter the governance structures and arrangements that we have in place when it comes to the pursuit of specific and actual matters. It's very important for us to get the message out—which I believe we did—that this and other areas are a focus into the future because we do want to highlight the importance of fair outcomes to members and superannuation funds. We do want to highlight the importance of fairness full stop, and so we use these opportunities to impart messages. But again I do underline that this isn't going to fetter, constrain or take away from the important governance structures that we have in relation to the commencement of actual proceedings against a superannuation trustee in this case or any other individual corporation or entity.

CHAIR: We are due to take a dinner break at 6.30, and I know that Senator Sinodinos has some questions. I'm happy to put the remainder of my questions on notice. I'm wondering how long you think you might have?

Senator KETTER: I have a couple more questions on this point and then I do want to ask Mr Price my traditional questions about Mr Palmer! He can probably reel off the answers from memory, so I don't think I'll be more than 10 minutes or so.

CHAIR: I'm quite happy to push on then.

Senator KETTER: Mr Shipton, very quickly, what's your view on ASIC's role in taking action on underperforming funds, noting that APRA also has a role here? I'm just interested in how Ms Chester's comments stand up against those views.

Mr Shipton : Of course I support Ms Chester's comments. She also supplemented that, when we would be thinking about a particular action, we would be looking at the body of conduct. Underperformance is one example of what we believe to be unfair conduct and, because it's unfair conduct, we want to call it out. The way we see it is that consistent underperformance is about real people's life-savings. It's real people's retirement, and we want to put trustees on notice that they need to be taking this particular aspect very seriously. Now, again, I want to reinforce that there are processes and procedures before we take on a particular matter. We'd have to look at the whole body of evidence, the whole book of conduct—its level of seriousness, its egregiousness, how much harm has resulted—before we pursued an action. That is the context and, I think, a really important context that these remarks, which I support, should be seen in.

Senator KETTER: All right. Thank you for that. Let's turn to Mr Palmer. Mr Price, can you update us as to where ASIC is in relation to the investigations of Mr Palmer and Queensland Nickel, particularly in relation to allegations of shadow directorship?

Mr Price : I think it was fairly recently—late February, from memory—that I provided the last update. I don't have a material update for you further at this stage. I would note, not in relation to the mineralogy matter but in relation to the Palmer Leisure Coolum matter, that the Brisbane Magistrates Court has listed criminal proceedings for a mention on 23 June this year, although that date may change.

Senator KETTER: Okay. Are criminal charges or further civil action being further considered by ASIC?

Mr Price : In relation to the mineralogy matter, all options are on the table. As I said, in relation to the Palmer Leisure Coolum matter, criminal proceedings were commenced in relation to Palmer Leisure Coolum Pty Ltd and Mr Palmer, as a director of that company.

Senator KETTER: Are there any new allegations that you have started following up on?

Mr Price : No; nothing.

Senator KETTER: So nothing further?

Mr Price : Nothing new at this time.

Senator KETTER: Can you say if you've spoken to Mr Palmer himself or Mr Mensink, as part of your investigation so far?

Mr Price : As mentioned, I think, in late February, it's probably not appropriate to go into that level of detail. But we have spoken to a number of people in relation to those matters.

Senator KETTER: You indicated previously that you were considering a new range of possible offences that Mr Mensink may have committed. Is there any update on that?

Mr Price : There is no material update at this stage.

Senator KETTER: Finally: is there any update around attempts to extradite Mr Mensink from Bulgaria?

Mr Price : I'd prefer not to comment on that.

Senator KETTER: Thank you very much.

Senator SINODINOS: Your opening statement mentions the fact that you have recently commenced a public consultation to update your guidance on responsible lending. I just wanted to get some elaboration on why that was the case and what the objectives were.

Mr Shipton : I will start the response and then hand over to my colleague Michael Saadat, the executive director of financial services, who is leading the consultation. One important point to note is that this consultation process on responsible lending has been in the works for quite some time because of changes in technology and expansion of the market. The fact that, I believe, the responsible-lending laws have been in existence now for 10 years and that they are principles based has triggered and catalysed a consultation process to update the guidance to account for changes in technology, more information being available, open banking developments and best practices that we have seen, and also, for that matter, practices that we would deem as unfair. That's the context in which we started the consultation. I will quickly add—I do think it's important, because it's in my opening remarks: I do believe that the responsible-lending laws are a fundamental backstop of fairness and protection to borrowers, and, also, a very prudent practice that should be applied responsibly and fairly by the lenders. With that, I'll hand over to Mr Saadat.

Mr Saadat : I don't have a lot to add. The consultation process started shortly after the final report of the royal commission was released. We are still consulting at the moment. It's a very significant piece of regulatory guidance for ASIC. It covers the provision of all consumer credit in Australia, not just mortgages—so it covers credit cards, personal loans, et cetera. Because the law is principles based, providing guidance from ASIC is quite important for the industry so that it understands what our expectations are. The guidance hasn't been updated for a couple of years, although we have done a number of reviews. We felt it was timely, now that the royal commission's final report is out, to commence a process to consult with the industry and other stakeholders, and bring our guidance up-to-date as necessary.

Senator SINODINOS: The statement makes reference to your approach, because it's principles based, adapting to new technology, and it refers particularly to open banking. How do you see open banking impacting?

Mr Saadat : We think it's potentially a very significant development for the responsible-lending obligations. The obligations require that lenders make reasonable inquiries into a borrower's financial situation and then take reasonable steps to verify the borrower's financial situation. What open banking will do is allow lenders to collect very granular information about a borrower's financial situation. Using technology and the APIs that will be in place under the open banking framework, they will be able to collect and analyse that information very quickly and efficiently come to a decision about whether a proposed loan is suitable for a customer. Traditionally what lenders have had to do is collect paperwork from consumers to varying degrees, and this will replace the need for that inefficient process. What our guidance proposes to do is recognise the role that things like open banking and other data sources can play in fulfilling your obligations to make reasonable inquiries and take reasonable steps to verify the borrower's financial situation.

Senator SINODINOS: Will it eliminate, for example, the need for consumers to be making estimates for various categories of their expenses? In other words, will it get to the point where you will have very individualised information about a person's income and expenses?

Mr Saadat : That's correct.

Senator SINODINOS: And that information will be collated from what sources?

Mr Saadat : The way that the open banking framework, as proposed, will work is that parties that have access to the APIs that are in place to allow information to be extracted from somebody's transaction account, credit card, mortgage—that information will be able to be shared in a secure and safe environment so that consumers can authorise the transfer of that information about their spending habits, and the lender can then analyse that information and determine whether a proposed loan would be affordable for that consumer.

Senator SINODINOS: And if a consumer doesn't give that consent it would immediately send a signal to the potential lender that there's a concern?

Mr Saadat : I think there might be a transition as open banking rolls out more broadly across the country. It will be new to many consumers initially, so some consumers might be wary about consenting to the transfer of their data. But we think that, within a short period of time, it will be become well-established, much like many of the other technologies that have come through the financial system. ASIC will certainly play a role in providing guidance to consumers through our MoneySmart website. A third of Australians visit that website, so it's a very valuable source of information, and it will help industry with that transition.

Senator SINODINOS: Thanks. I have one final question, and it's for the chairman. It goes to the issue of public comments made by you, the deputies and other members. I assume the rule that you follow and the rule that your deputies and others follow is that, when speaking in public or on panels, you're expected—and certainly I think politically we would expect—to be frank and fearless in the advice that you give. Is that right? Is that the approach that you take?

Mr Shipton : Absolutely. We need to be very direct and clear as to how we see that the financial system could be improved, and providing direct, frank and fearless guidance on a range of different issues is absolutely fundamental to what we do. We need to send important messages. These messages are very deliberate because they're sending a message to the industry to reform itself. They're sending a message as to the areas that we believe that reform, improvements and fairer outcomes need to take place. We make these types of comments strategically all the time. In many respects we try and use forums like today's to send the important messages about where our concerns are.

It would be a great outcome, and I believe that the industry has a capacity—whether they are willing and able to do so is another matter—to ensure that they put fairness first and that they pursue the culture that Senator Ketter was referring to and the fairness outcomes that we all want throughout an organisation. In many respects, the heavy lifting has to be done by the financial services providers, full stop, across the entirety of the sector, in every area. There needs to be a tremendous amount of heavy lifting.

I will highlight something that was made very clear in the royal commission—the first line of responsibility for the fairness, efficiency and honesty of the financial system rests with those entities and people in the financial system. We're being very strategic and direct about how we believe the system could be fairer, more efficient and more honest.

CHAIR: We had an indication from another senator that they had questions, but they haven't shown up. I'm are acutely aware—

Senator SINODINOS: That's their problem.

CHAIR: It is their problem. I think that we might have to place further questions on notice. Thank you very much to representatives from ASIC for joining us today and for staying late. I think the committee will adjourn until tomorrow morning. Thank you, Hansard. We're back with the ACCC and APRA tomorrow morning.

Committee adjourned at 18:44