New ASIC appointments confirm shift to “express investigation” approach

Treasurer Josh Frydenberg has named Joe Longo as the new ASIC Chair, and Sarah Court as a new Deputy Chair.  The two appointees replace the outgoing Chair James Shipton, as well as Deputy Chair Daniel Crennan, who both stepped down in relation to investigations into inappropriate expense payments.

Longo is currently a senior adviser at Herbert Smith Freehills in Perth where he specialises in contentious financial regulatory issues.  He was formerly a General Counsel for Deutsche Bank, as well as National Director of ASIC’s Enforcement Division.  Court is currently a Commissioner at the ACCC, where she oversees the competition regulator’s enforcement and litigation program.

He has form as a practical operator, not just a bureaucrat, in other words. Exactly what ASIC needs.

The appointments should therefore be seen as a welcome development for the vast majority of financial services providers and advisers who adhere to the substance of the financial services laws in Australia.

For those that don’t, the backgrounds of the appointees shows ASIC is serious about rolling out its new “express investigation” approach to enforcement, an “enhancement” of its previous “why not litigate?” focus following the Hayne Financial Services Royal Commission.

“Express investigation” has been described by current Deputy Chair Karen Chester as being lighter but more impactful, quick and more cost-effective, and based on cooperation where possible.  It involves the regulator at the earliest opportunity setting out its concerns to, and seeking the cooperation of, the entities involved.  If this doesn’t work, ASIC will press on with its investigation, but will focus on harmful misconduct, not harm-free process breaches.

Court’s appointment also fits with ASIC’s increased activity in the competition space, which was typically the realm of Court’s former employer, the ACCC.  ASIC is currently conducting a review of competition in the $3 trillion funds management industry, with the final report due in June 2021.

We welcome the new appointments and look forward to seeing worthwhile changes in ASIC’s approach accordingly.

Mackay Chapman are high-stakes regulatory, financial services and complex dispute lawyers. Please get in touch if we can be of assistance.

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