In a submission to the Financial System Inquiry, International commercial law firm K&L Gates has been highly critical of the regulatory approach of financial services in Australia.[more…]
The US-based firm K&L Gates who merged with Middletons’ in 2013 has outlined that there are “inconsistencies that have obscured the law” and “ the law governing financial services has become excessively complex and technical.”
In its submission it has stated that there are, “regulator overlaps, inconsistencies in enforcement and successive regulatory modifications have lead to pervasive uncertainty in the financial services industry.”
The submission highlighted the most over-used and misapplied legislative instruments are ASIC Class Orders and ASIC Regulatory Guides which they describe as being, “utilised to create entirely novel regulatory regimes for specific categories of financial products and financial service providers.
The submission questions whether the Australian funds management industry’s international competitiveness is being hampered by the “current regulation of companies and trusts” and stated that, “the regulation and operations of companies under the Corporations Act is insufficiently flexible to provide any incentive for Australian funds to be structured as a company.”
It was also outlined in the submission that it was a “disadvantage for Australian fund managers competing in a global marketplace populated by fund managers that are able to offer investors multiple investment vehicles in a variety of different legal structures” and recommended that “corporations law is amended so as to allow funds to be set up in Australia, either as funds or unit trusts, depending on the preferences of the relevant stakeholders, as has recently been implemented in Hong Kong.
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