Parliamentary Joint Committee on Corporations and Financial Services chair Bernie Ripoll told delegates at last week's Institute of Actuaries of Australia conference in Sydney that ASIC was never going to be able to prevent the calamity of Storm in its present structure.
"In the lead-up to Storm Financial's very spectacular collapse it was audited and had been compliance checked by ASIC and got through with flying colours," Ripoll said.
"There was not necessarily anything wrong with the organisation as it stood on paper, or in its systems, or the checks and balances that go with determining whether or not the organisation was meeting its obligations under law."
His comments seem to suggest Storm was merely a casualty of the global financial crisis.
While this theory has been echoed by Storm company reports, it seems strange Storm's collapse did not trigger a domino effect of advice firm meltdowns.
At no stage in the weeks or months following Storm's collapse did any other advice firm buckle under the stress of the poor markets.
Perhaps a number of small firms have felt there was no other choice available than to sell to a larger group, though none have come out of the woodwork with such a public fall from grace as Storm.
Though, perhaps I'm speaking too early on this matter. ASIC and the FPA are yet to announce their Storm findings, so there may still be fallout.
Interestingly though, Ripoll and the parliamentary joint committee are reviewing the role and responsibilities of the corporate regulator.
News of this review comes less than a year after the regulator announced the findings of its own internal review.
In May 2008, ASIC chair Tony D'Aloisio announced the outcomes of a strategic review that would prepare ASIC for current and future challenges.
These changes include the establishment of 17 teams that will include representatives from the financial services industry, including retail investors, consumers, investment managers, investment banks, superannuation funds and financial advisers.
As a result, four ASIC divisions will be abolished. Additional resources will also be directed to the supervision of brokers and exchange-traded products.
Depending on how far back Ripoll and the committee intend to go when reviewing ASIC, it may raise serious questions about the validity of an internal review.
Could it be that ASIC missed something in its review that the committee may soon find?
