By Rishav Chatterjee
(Reuters) -Australia's corporate watchdog should be split into two after "comprehensively" failing in its role, including by not taking action against offenders and focusing more on managing its reputation, a months-long Senate inquiry found on Wednesday.
The Australian Securities and Investments Commission's (ASIC) scope was too broad for it to be effective and efficient and the government should consider splitting its functions between a companies regulator and a financial conduct authority, the Senate Economics Committee report said.
"It is clear ASIC has failed," said Senator Andrew Bragg, who also chaired the Senate Economics Committee that delivered the final report after a 20-month-long inquiry.
Besides noting the ASIC had "comprehensively failed" and suggesting to split the regulator, the report made nine other recommendations to "provide Australians with the protection and confidence which is sadly absent," Bragg said.
The ASIC is already working with the Treasury to act on the recommendations but it will take time to consider the report, a spokesperson for the watchdog said.
Treasurer Jim Chalmers has not officially responded to the report and did not immediately respond to a Reuters request for comment.
The Senate committee recommendations included recording how the ASIC handles reports of alleged corporate misconduct and setting up a searchable public register of civil or criminal outcomes that arise from those reports, much like the U.S. Consumer Financial Protection Bureau.
"Too often, ASIC fails to respond to early warnings of corporate misconduct and does not routinely use the full extent of its powers to achieve strong enforcement outcomes," the report said.
"This approach fails to deliver justice to the victims of corporate crimes, undermines economic productivity and does not deter future poor behaviour."
The report also recommends making it a legislated objective to maintain high levels of transparency into an investigation into any wrongdoings by companies and the enforcement outcomes.
It also recommended amending the whistleblower protection provisions to include compensations and incentives for those who make a "substantial" disclosure.
The reality remains that corporate law is under-enforced in Australia, the report said.