ASIC boss Joe Longo calls for law reform amid fears current legal mess failing to protect consumers

Australia’s top corporate cop Joe Longo is pushing for reform of the country’s tangle of company and finance services laws, warning of unnecessary burdens and failures to protect consumers.

The Australian Securities and Investments Commission chair said it was becoming increasingly clear that the “breadth and ambition of legislation and regulation is having real-world impact on businesses”.

Mr Longo said the “mosaic of complexity” was also affecting consumers — including ASIC combatting scams, predatory lending and unfair contracts.

He pointed to new laws coming out of Canberra dealing with artificial intelligence, cryptocurrencies and mandatory climate disclosure for business adding to the complexity.

Complexity made it harder for business to understand their rights and their obligations and the current direction was undermining the functions of hidden agency.

“Simplicity means enforceability — that is good for consumers and business,” Mr Longo said.

He made the comments while unveiling plans to create a consultative committee made up of consumer advocates, business leaders, directors and industry groups to grapple with legal simplification.

Their task would be to identify how ASIC could more efficiently and effectively administer the law and “how the levers and guidance available to ASIC can be more helpful”.

Mr Longo, a former Perth lawyer, unveiled his push at ASIC’s annual forum in Sydney on Thursday where the agency’s bosses are updating industry players, advisers, politicians and other regulators on their concerns and priorities for the year ahead.

At last year’s conference in Melbourne he warned that “we’re all navigating complex, even uncharted waters”.

Mr Longo said on Thursday that his crew was “navigating those waters with overly-complex tools”.

“Everything was designed for a specific circumstance,” he said.

“But no tool was designed with all the others in mind. Perhaps the single biggest challenge of how effectively regulation can advance and protect the interests of the community and business is its complexity.”

First mapped out in the late 1980s as States handed powers to the Federal Government, Australia’s Corporations Act involves a morass of defined terms, sections written in dense legalese and cross-references that have confounded some of Australia’s finest legal minds.

The Australian Law Reform Commission released a report in January calling for sweeping reform of an “unnecessarily complex legislative framework” and what it described as “an incoherent legislative hierarchy” where “ anything could be anywhere”.

The commission found that excessive prescription in the Corporations Act obscured “fundamental norms”.

Mr Longo said the time was right, with opportunities to look back over three decades of changes to corporations law and the report of last decade’s banking and financial services royal commission.

“Addressing this issue is now more important than ever — not just for this generation but for generations to come,” he said.