Appearing before a Senate Economics References Committee public hearing in Sydney yesterday, Mr Tregillis was asked by Liberal Senator David Bushby how he thought the operations of ASIC could be improved.
Mr Tregillis framed his comments by saying any changes to the operation of ASIC must be tailored to the Australian market.
But that said, ASIC could benefit from similar powers as those enjoyed by the UK's Financial Conduct Authority (FCA), according to Mr Tregillis.
“[When the FCA] is concerned about compliance [it doesn't have to] wait until there is a breach – it can actually require that an expert do a review and report back to the regulator,” he said.
While he acknowledged this kind of power can be “double-edged”, Mr Tregillis said it is a “proactive mechanism” – and particularly useful if the regulator lacks resources.
“[It could be used for issues] that fall short of a breach, but where there is a concern about a compliance culture,” he said.
ASIC currently uses enforceable undertakings for these types of issues, said Mr Tregillis – but “the threshold for that is quite large” and they require constant visits from regulator.
Requiring a company to appoint an independent expert before there is evidence of a compliance breach can save the regulator time and money, he said.
But there is a downside too, he added.
“In the UK some of the smaller firms find those special purpose reviews a bit complicated and a bit expensive,” said Mr Tregillis.
The Australian system could also learn from the UK when it comes to complaints that affect an entire 'class' of people, he said.
“[ASIC and FOS] find it difficult when there is a firm with multiple complaints – we have to deal with everyone individually. It takes time, and that causes people frustration,” said Mr Tregillis.
“In the UK they have a system where the regulator can put in place a consumer redress scheme that is equivalent to an enforceable undertaking, but slightly different,” he said.
Asked about the lines of communication between the regulator and the ombudsman by the committee, Mr Tregillis said FOS meets with ASIC at least quarterly.
“We provide a very detailed report to ASIC on the nature of the complaints and the type of complaints on a quarterly basis,” he said.
While FOS doesn't name the financial services providers involved in complaints, Mr Tregillis revealed the “top institutions” haven't stood out in terms of large numbers of complaints.
“To put it in context, we looked at 26,000 complaints [last year]. About 3.5 per cent of our total complaints relate to financial planning and investment issues,” he said.
Mr Tregillis was an ASIC commissioner before he was appointed the chief ombudsman of FOS in 2011.
He spent eight years as the deputy managing director of the Monetary Authority of Singapore, and has also conducted reviews of the Canadian and UK regulatory systems.
