Association calls for review of ASIC’s powers in response to PwC reforms
The SMSF Association supports proposed reforms to broaden information-sharing provisions for regulators but has called for ASIC’s powers to be reviewed.
The SMSF Association (SMSFA) has broadly welcomed proposed reforms announced by the government in response to the PwC tax scandal including information-sharing provisions relating to professional associations.
In its submission, the SMSFA said proposed reforms to allow the ATO and Tax Practitioners Board (TPB) to disclose information to professional disciplinary bodies about legal or ethical misconduct by members will improve disciplinary processes for both regulators and professional bodies.
The draft bill amends the Taxation Administration Act to enable a taxation officer to disclose protected information in relation to acts or omissions by a person to a prescribed professional disciplinary body where the taxation officer reasonably suspects those acts or omissions may constitute a breach of the prescribed disciplinary body’s code of conduct or professional standards.
The disclosure must be for the purpose of enabling or assisting the prescribed disciplinary body to perform one or more of its functions.
It similarly amends the TASA to allow a TPB official to disclose official information to professional disciplinary bodies.
The SMSFA said the TPB is a highly engaged regulator with a good history of working with professional associations.
“[These changes] will strengthen the relationship and improve the disciplinary processes for both parties,” it said.
Given that professional associations are not statutory bodies, the association said Treasury should include protections for professional associations, their board, employees and disciplinary committee or panel members when considering disciplinary matters where information is shared between the SMSFA and the regulator in good faith.
The submission noted that the proposed information-sharing provisions relating to to professional associations have been modelled upon powers available to ASIC pursuant to the Australian Securities and Investments Commission Act 2001 subparagraph 127(4)(d)(i).
The SMSFA said the government should consider undertaking a review of the powers afforded to ASIC.
“Whilst these powers are available to the regulator, they do not appear to have been adopted in practice. When matters are referred to the regulator, there is often no further communication. Nor is information shared by the regulator on matters relevant to professional association disciplinary action for members,” the submission said.
The SMSFA said a more interactive and proactive relationship with ASIC would better serve the objectives of both parties and “enhance consumer protection through enhanced information sharing, enabling more timely disciplinary action”.
It also called for a review of the associations listed in the Australian Securities and Investments Commission Regulations 2001 Regulation 8AA.
“ASIC’s broad regulatory remit must be considered and the reach that will have across a range of professional associations,” it said.
In relation to proposed changes to extend the time for investigations by the TPB, the SMSF Association said it understood that complex matters need time to be adequately investigated and where applicable, commence proceedings.
However, the association said the extension of time should not allow investigations or proceedings to become drawn out.
“To be just and proportionate, matters must be addressed in a timely manner and as soon as is practicable,” it said.
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