A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission to the Asian and Oceanian Stock Exchanges Federation 30th AOSEF General Assembly & Working Committee Meeting, 29 March 2012, Sydney.
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Three key challenges in the years ahead
I've been speaking recently about ASIC's three key challenges that we need to meet in achieving our three strategic outcomes.
Briefly, these are:
- First challenge: ASIC's growing regulatory perimeter.
- It is estimated that funds under management in the superannuation sector will rise from $1.3 trillion to nearly $3 trillion over the next decade and then $5 trillion by 2030.
- More products, more investors and more money to invest increases value to the economy and capital for exchanges, but increases overall risk in the financial system.
- Second challenge: Complexity in the financial system is growing.
- Advances in technology have led to increasingly complex financial products, information channels, and financial markets. Technology is advancing at a rapid rate and the complexity it brings also increases risk in the system.
- I'll talk more about this in a moment.
- Third challenge: The final challenge is for ASIC to leverage its resources and be proactive, because it is through proactive regulation that we build resilience in the system.
- Benjamin Franklin once said, 'an ounce of prevention is worth a pound of cure'.
- Stakeholder engagement, surveillance, education and guidance are central to being proactive and maintaining confidence in Australia's financial system.
These three key challenges need to be met in achieving our 3 strategic outcomes.
I've raised these three challenges because it puts in context the increase in complexity in technology and the financial markets. It's one of the top three challenges that ASIC faces, and one that I'm sure you're quite aware of in your own business.