The event was held in Perth on 19 June.
Mark Pownall: Thank you for that, and welcome as well, Joe.
Joe Longo: Thanks, mate.
Mark Pownall: Just a quick agenda for today. Just a reminder about Slido for your questions. I am going to lean into those. There's plenty to talk about. And I'm going to test Joe a little bit on the early days and how he got to where he is, before we get into some of the things that are going on in the world of ASIC today. Joe, back in Perth, I'm imagining with your WA roots you didn't coincide this trip with the Rugby League State of Origin last night?
Joe Longo: I do have to admit that that was brought to my attention this morning. But I gather it's not publicly known, at least I would have thought [inaudible] as to who won and who participated. But, yeah, I do acknowledge it was a very important gathering [inaudible]. A big one.
Mark Pownall: So you went through that brief tracing of your career. I think you started life, your corporate life here, your career here. How did you end up in that sort of corporate world, the legal field that you ended up in there? What was the drive for that?
Joe Longo: I was very lucky to move in the late '80s when West Australia went through the period known as [inaudible]. And I'd just come back from the US and was working at a start-up company. And the Bond Group collapsed. There was a Royal Commission. For quite a long period of time, I was doing a lot of what we now call white-collar defence work. And I just found it utterly fascinating. It was very complex. I got to work with such a wide range of people, some very senior practitioners from all around the country. And it sort of opened my eyes to a world that I found it very interesting.
And in those days - these days, we're much more comfortable talking about it, but in those days, you're either a corporate or commercial lawyer, or you're a criminal lawyer. But from the late '80s on, those fields merged. And so today, we have a lot of expertise in that field. So I got another chance to go to the Australian Securities Commission as a consultant, having done defence work. And so it's been a - that's how it all started. I was very grateful for that opportunity.
Mark Pownall: And, of course, one of your headline clients, I suppose, back in the day, was Alan Bond. Did you work closely with him, or what sort of things were you doing with him?
Joe Longo: Well, when the Bond Group collapsed, I was in the litigation part of the firm. And you can go read the history for yourselves, but the Bond Group, and Mr Bond in particular, had a number of issues to deal with. And so, in my case, I ended up doing a couple of [inaudible] for him. He was acquitted after the second one. I did some Royal Commission work with him. So I did work closely with Mr Bond for a little while in that capacity. And, as I say, I got the opportunity to learn so much and be exposed on a very wide range of complex issues. And looking back, and you sort of wonder how you got through it, but you always get through.
Mark Pownall: And what did you think you - what did you find you were really good at, at that time? What were those people looking and calling you for, and what were you really - what was your true skill set?
Joe Longo: I've often wondered about that. Look, life's a bit like that, isn't it, for all of us? There's an opportunity to [inaudible]. And I came back from Perth in my late 20s, in 1988. It was an opportunity to be a partner of this great law firm. And then the world fell apart. I mean, [inaudible], and the Bond Group collapsed, and the Royal Commission. All of a sudden, the whole landscape changed very significantly. A lot of ordinary people suffered during the period, [inaudible] recession.
And so you just sort of step up, you know. You get the opportunity, and I was just very fortunate to have it. But as I say, I think it's all about learning. It's about being curious, and being open to other people's views, and being part of a team. I think it's as basic as that.
Mark Pownall: And the change - that's Parker & Parker.
Joe Longo: Yes.
Mark Pownall: Were you there when it changed, when Freehills was merging [inaudible]?
Joe Longo: No, by that stage, I think I'd gone to the [inaudible] as a litigation consultant. Because Parkers was part of some other grouping, and then up into the mid-late '90s, they did the Freehills thing.
Mark Pownall: [inaudible].
Joe Longo: Yeah.
Mark Pownall: And what did that feel like? What was the process to go from the defence side over to the investigative side?
Joe Longo: Not much of a process. I think this is something I often get asked about, and I think about it a lot. I've always felt a curiosity and ambition to do different things. In fact, I was talking to some of the young lawyers yesterday in the office, and encouraging them to do private and public work. So my background's in law, so that's the area I know most about. And so I just think it's a good experience, being in a professional environment [inaudible] environment, to move around a bit. And so if you get the chance to work for a regulator on the public sector, and you're interested in doing that, do it. And then if you get the chance to do the private sector opportunity, you should do that too.
So I've been very lucky. I've been a little bit of a risk taker, but I've been lucky that that's been my journey, and that reflects my personality and emphasis. There are a lot of people who stay in one sector or the other, and they're very successful. But I think in terms of public administration and regulation in general, I think it's in the public interest that we attract people into that work that have a diversity of background.
Mark Pownall: Yeah. Look, I'm probably too early to ask this question, but how hard was it to attract top-level to ASIC, for instance? Were you unusual when you did it, or was that normal?
Joe Longo: Back in the '90s or now?
Mark Pownall: Well, yeah, well, both.
Joe Longo: I'm not sure they were beating a path to the door in 2021, doing the current job. But I'm constantly amazed at the quality of the people we attract. Now, clearly, in some sectors, it's a lot more competitive, but I'll give you an example. We're about to hire someone who's an astrophysicist. She's literally a rocket scientist. She'll be in charge of our data efforts. She was at ASIC before, I think it's part of her journey, and she's come back to us. She's got a PhD and she's studied in the US and the UK. I'm really excited about having her on board.
We have a lot of people like that who come to us because they're very interested in - I was very interested in the opening remarks by the Vice-Chancellor of the - that's ASIC. Data, the digital transformation, innovation. To actually give practical content to those objectives, you've got to have the right people. You have the right culture, and if I may say so, the right leadership. It's got to come from the Commission. It's got to come from the top to say, you know what? We're going this way now, and we're going to help you go in that direction.
I think it's a huge mistake, and I feel very strongly about this, and I talk about this as an existential risk for ASIC, but if we don't embrace technology and data and really get on top of that, then we will be irrelevant, probably within the next five years, 10 years.
Mark Pownall: Very quickly. I'm going to circle back to that, but just looking again back at your career. You have a lot of offshore experience, banking area, all that sort of stuff. What did you learn from that experience? What are the things that were different? And both different law and different jurisdictions, if you know what I mean?
Joe Longo: I think that people often focus on the technical stuff, what the rules are. But as the years went by, the roles I had were really problem-solving. And so it's not about your technical ability, although it helps to have some sympathy for the law, but I invariably had good people to work with. So what I learnt was just the range of problems and issues I had to deal with, and the cultural significance.
My standard view was that getting the law right wasn't really the hardest part. Because working for Deutsche Bank, we had access to excellent external lawyers, and we had a very good internal legal department as well. So the legal and technical part of solving problems, OK, complex, significant, but not the hardest part. The hardest part is very often people. It's culture, it's uncertainty, it's emotion. It's people feeling defensive of whether they've done the wrong thing, and the impact of whatever went wrong on the reputation of the bank.
So I think over the years, I really learnt a lot just through that, just through working with a wide range of people. And some of the cultural differences are really quite significant and interesting. If you want to try to solve a difficult issue in Japan, it's very different to solving a very similar issue in India, or South Korea, or China, or indeed Australia. And after a while, I sort of got used to navigating. But the key is being open, being respectful, being curious. If you do those things, then that's [inaudible]. That's why I think I survived as long as I did.
Mark Pownall: And I'm imagining some of those ideas would be the same as the role you have today, where you're dealing with corporates, you're dealing with government.
Joe Longo: Well, I think the challenge for a regulator, when I took on the job, clearly ASIC was on the back foot in a number of issues, and there's not much purpose served today trying to go over the history. But there's no doubt when I started, ASIC was on the back foot. And what I said to the staff in day one was that I wanted a confident, modern, ambitious regulator.
And so what does that mean? It means you're not risk-averse, you're not bureaucratic, you have ideas, you have imagination, and you have the confidence to say to the market, you know what, we need to start worrying about private-public market. Or, you know what, we have a regulatory complexity issue.
So I think a modern, confident, ambitious regulator gets the data bit right, we can come back to that. But in the end, it has to have a presence in the economy that builds confidence and says, you know what, this regulator's got something to say. It's not going to get everything right, but they're there, they have a view.
The other big - lots of [inaudible], but another one, and I'm constantly doing this, is that we can't be everywhere all the time. So part of the challenge for me and the Commission and everyone else at ASIC is to say, well, you know what, regulation's about choices. So we have limited resources, there are a lot of problems to look at, potentially.
And so in the end, part of my challenge and responsibility is to be able to say to people, well, here are our five priorities for the next two years. Here are the 10 problems we're going to focus on. Here's why we think they're the right problems and the right priorities. They reflect all the consultation and engagement we do with the community, with human groups, industry associations, governments, academia. And then it's on us what those choices are.
But if you go about it in a transparent way, hopefully you get it right most of the time. And if you don't, then tell us. You think I'm spending the wrong amount of resources on solving the wrong problem? Well, then tell me. I don't go into this intentionally to waste public resources. So that's really the key.
So I always wake up every morning thinking, are we making the right choices? Are we focusing on the right problems? Are we talking about them in a way that's actually helpful to all Australians, literally? So the work we're doing in superannuation, that affects everybody in this room. The work we're doing in private-public markets, that affects everybody in this room, whether you might understand it or not. Because what do you think is happening in the private markets? It's superannuation money. It's insurance money. So I think they're the sort of my broad approach.
Mark Pownall: And obviously you've come to that view here after, well, we're hearing sort of in hindsight after a few years of [inaudible], when you took that job, was that your brief, or was that something you had decided?
Joe Longo: I felt that way from day one. No one told me anything. You can't take on a job like this, if I may say so, without having some idea of what it is you want to do, what you think the problems are. It just doesn't work that way. So when I was appointed by the then-Treasurer, Josh Frydenberg, he took a bit of a bet. Never had a person from Perth before. But I went through a process. So did my deputy, Sarah Court, who was there at the ACCC. Went through a process, and I got the job. I never expected - this I think I can be really frank about - I didn't expect anything in [inaudible]. The window opened, and my wife and I discussed it, and so I had a go. Then I was appointed.
Clearly there were issues at ASIC, and so the expectation was that I would be able to, with Sarah Court, the two of us were appointed on the same day, we'd be able to turn the agency around. And I think that's what's happened. But we're all different. We all have different personalities and different leadership styles. But I came into the job exactly as I am now, with the way I've become, sort of changed after 40-odd years.
Mark Pownall: But it's a very public role.
Joe Longo: That's right.
Mark Pownall: And you weren't particularly a public person before. Were you ready for that side of things?
Joe Longo: Well, I was a very public person in the '90s. So I had - you're right, at Deutsche Bank I had a lot of other issues to deal with, but one of them wasn't worrying about the public part of it. But when I was at ACCC between '96 and 2001, I regularly did media, print and TV. In those days, the Head of Enforcement, well, he was the [inaudible] of enforcement. But I had to learn that.
I remember when I first moved to Sydney to do the enforcement job. Like all good lawyers at the time, I disdained the media. I'm a lawyer, the media's irrelevant. Anyway, I'm just going to focus on being an enforcement person. And I'll never forget the head of - I'm not sure what you would call the role at the time - there was an Irish woman, really highly intelligent, exceptional person. And she sort of literally went [inaudible] and said, "Look, [inaudible] matter. You've got to have media training. You will return my phone calls [inaudible]."
So again, it's a learning opportunity. So when I got the job, I was really focused on understanding what the hell I got myself into, technically, with the whole range of enforcement work. Several hundred people around the country doing it. So that was really my priority. But what I learnt in the first few months was, it wasn't just that. You have to be able to communicate what you were doing to the community, and indeed to your own people. So over the years, I've sort of had to learn that, yeah.
Mark Pownall: Four years in, a lot going on. What sort of keeps you up at night? Is it driving ASIC, or is there particular matters you think are important?
Joe Longo: I try to sleep. There's a lot to be said for sleeping. So my first priority at night is sleeping. If I don't sleep, there's always something going on. Look, I think a lot of the points have sort of come up. If I was to step back right now, what's worrying me, and a lot of people, there's nothing original in what I'm about to say, is just we seem to be living in a pretty shocking time, geopolitically. We look at what's going on in the US. We look at the Israeli- Iran situation, which is just the most recent thing. We can talk about Ukraine. We can talk about Gaza. We can talk about a whole range of issues in Africa.
And here we are in Australia, and in Western Australia, we're very lucky. But we're not immune from these global developments. We remain a highly attractive place to invest. We're regarded as a sophisticated economy, great rule of law, strong institutions. So I suppose what I worry about is, how is what we've got, what's the risk of all that being disrupted? And I think that risk is increasing.
So whether it's cyber, I think of all the issues, cyber seems to me to be the toughest. Because we all can acknowledge hacking, a cyber incident. But if something really awkward happens in that area, it can get pretty bad pretty quickly. And so I worry about that. So I know a lot of resources go in, at Commonwealth level, and at ASIC and APRA, the Council of Financial Regulators, a lot of work goes into cyber security.
And another reason for that is, there's a link to geopolitical risk. So if things are going wrong over there, it distracts businesses in the community. And in the meantime, bad actors, that sort of makes it easier for them, it creates opportunities for them, because people are distracted. So I think broadly speaking, I worry about that. That broad issue, I think is something we all need to be very conscious of.
And finally, AI has been mentioned a couple of times. I think there's a lot to talk about there. I'm still trying to understand AI and its implications, but I think the stakes there are pretty high.
Mark Pownall: Yeah. So it's about resilience in the economy, isn't it?
Joe Longo: Yeah.
Mark Pownall: Just going to actual matters at hand.
Joe Longo: Yeah.
Mark Pownall: I mean, I think the most recent one, you're reviewing the ASX. So what's the concern there? Could that have happened earlier?
Joe Longo: Well, the Australian Stock Exchange, as we all know, is an absolutely critical feature of our economy, and it has a really interesting history. It's one of the first exchanges in the world to be self-listed, to get your head around that. So they're an entity that's listed on itself. That happened a long time ago, in the late '90s, early 2000s. And it's, for most practical purposes, a monopoly. And we are very, we as an economy, as a community, very reliant on ASX being operationally resilient and reliable.
Now, when I first got the job, I said a moment ago, I had views. And one of them was, and I made this clear to ASX at the time, but they had too much light touch regulation, is the way I would put it. And I thought there were issues there at the time, based on my own judgement and experience. The Commission looked at that, and that year, a few months after I was appointed, we imposed an additional licence [inaudible].
Then they had their CHESS problems, which required them to provide, for the first time, expert reports on the Corporations Act that got audited, sort of summarising some of the things we've done the last four years. We sued them for misleading the market. That's an allegation that's going to go to trial at some point. You'll recall in February '22, everything's fine with CHESS, and then it wasn't. And so, that case is all about misleading the market. It's not about the benefits or the strengths of the underlying technology.
And in the meantime, the Reserve Bank is also getting increasingly concerned about ASX's culture and resilience from a financial stability point of view. So when you really step back, the key regulators are us and the Reserve Bank.
The other development is that last year, finally, we've got competition in clearing and settlement legislation and market infrastructure legislation, that had been recommended by the Council of Financial Regulators some time ago. So we've been pulling levers for quite a while.
And so, my first point would be, I think it would be seen as a disproportionate overreaction to launch the kind of inquiry we launched on Monday, three years ago. I think there's no way I think that would have been a sensible thing to do. And it wasn't necessary.
I think it became necessary because of what happened in the last four years. We had the outage last December, which led to an investigation. And we've got these various other matters; CHESS abandonment. So it was the cumulative effect of these incidents. And the other thing is, there are some - I can't talk too freely about this, because some of it's confidential - but we're constantly engaging and engaging with market participants, both domestically and internationally, and with the Reserve Bank, and we've reached the point where we say, you know what, it's just not working. We're not getting the progress that we should be seeing right now.
Now, I hasten to say that there hasn't been no progress. I mean, under the newly-appointed chair, David Clarke, and under Helen Lofthouse, the CEO, clearly there's been a lot of work done. But it's my job, it's the Commission's job, to step back and say, is this good enough? And the answer is no, it's not.
And so for the first time, we've started this inquiry. We plan to announce the panel that will be leading the inquiry in a few weeks' time. It's a very ambitious inquiry. And I think the ASX has said they'll be cooperative. I see a lot of upside for the ASX. And I see a lot of upside for the public interest. Because in the end, you want to be able to get up every morning and know that the ASX, the major banks, the major superannuation funds, they're all functioning properly, and they're resilient, and they're delivering. That's my job. Get the system right. So that's the thought. That's all.
Mark Pownall: And I suppose this discussion was titled 'Private Capital with Public Consequences' so it's part of that. But you've also been talking a lot about private capital, private markets. What's driving that conversation? And how much - I mean, the ASX is more the public side of the markets, isn't it?
Joe Longo: Yeah, that's right. I think what I say to people is that the public - we're all more comfortable in the public markets. We sort of understand share trading. We can see it as it's liquid. So me included, talking about public markets, is sort of something we can do fairly easily.
But what we've noticed, and we started this work a little last year when we published our market cleanliness report, and based on some discussions I had internationally and domestically, it became apparent that there's a big story happening in the private markets.
And I say a big story - there was enough going on there based on my discussions and the work the team was doing to say to ourselves, we really need to do a deep dive here. And so we started doing some more roundtables, and that led to the discussion paper this year in February. And I've really been struck by the [inaudible], that this is getting international attention. We're getting phone calls from the major [inaudible] around the world saying it's really interesting work.
So the point is, we're seeing concern in the public markets, so-called de-equitisation, where people are saying, oh, I don't [inaudible]. What's going on there? Our national pride has been undermined. There's something wrong with us if we're not having more listings. I'll come back to that. So where is the money going?
And in the US in particular, the growth of the private markets has been really huge. In Australia, we've gone - this is all in the discussion - but we've gone from a relatively low base, but over the last two or three years there's been a very dramatic 5% increase in investment. Now we think there are lots of issues, but I'll just touch on a couple of them. One of them is data and transparency.
So one of the whole point of private markets is they're private, they don't really know what's going on, not from a regulatory point of view. So we've got a data transparency challenge. And my guess is that we've probably underestimated the size of the private market. So we're doing some work on that.
And secondly, we're doing surveillance work on a number of private credit entities, or providers [inaudible]. And we also commissioned a piece of work, a research piece, that we'll publish in August by two market experts on private credit. So the private markets increasingly are becoming a source for raising capital, and it's also interesting to retail.
So what I've said to people is that I'm not going to rush in and regulate and be prescriptive. But I think it is in the public interest for us to understand what's going on in the private markets, and to make sure everybody else understands it. Do you realise what sort of money is available? Do you realise what sort of transactions are occurring, what sort of risks are being taken?
So early days, but we do expect to - we've seen some grubby behaviour in the private credit space, which we're in the middle of the surveillance, but we're already seeing some behaviours around valuations, disclosure of confidence and governance that concern us.
Now whether that can be dealt with under existing law, that may very well be the case. I think the critical question for most of that sector who are trying to do the right thing, that's always my starting point, people doing the right thing, is that we could very well end the year with some publication of what we might call better practices, standards or expectations that we will develop in the industry. So I'm hoping by the end of the year you'll see us have more to say about it.
Mark Pownall: And is that, I mean there's two things here, isn't there? There's not knowing the scale of it, because if you don't know the scale of it, and something goes wrong, that's a bigger problem. But there's also the not knowing, the individual part, the opaqueness of each of these. Are we looking at more disclosure? Is that what we're talking about?
Joe Longo: Well, I think that part of it is regulators like us, and certainly regulators like an APRA or Reserve Bank on the prudential side, that they worry about images that aren't visible and a so-called contagion list. And so we saw that in the GFC. I'm not suggesting for a second that we're heading to a GFC [inaudible]. But what I am saying is that part of my job, and the regulator's job, is to do whatever we reasonably can now to see what's going on. And I think based on some international work that's been done that we're part of, the non-bank-funded institution, NBFI sector, I think the financial stability [inaudible]. They do worry about that. They worry about hidden images and contagion. And so one of the ways of dealing with that is transparency, the opposite to opacity.
So I think the other part of this is that we want people to, we want capital allocation to be fair and efficient, and for risk and liquidity to be properly priced. So in the end, it's not -, markets are a really wonderful thing. If you went into the history, they're constantly evolving, they're organic, they represent the cumulative effect of thousands and thousands of people making these little decisions. And occasionally, OK, the big fund managers make decisions that affect us all in a superannuation fund [inaudible].
So what I'm looking for is a sufficient level of transparency that encourages good risk management. So we've taken a very strong public position that private credit is good for the economy and for all of us, if it's done well.
Mark Pownall: I'm going to just use a bit of a Slido here. It's obviously a popular question there. But one of the national conversations at the moment is productivity. So where does all that fit into productivity?
Joe Longo: We're a humble regulator. We get up every morning and [inaudible] the way it is. But last year I gave a speech which was humbly called 'Regulatory Simplification,' or something like that. So one of the things I feel very strongly about and I came into the job thinking, is that we really make a virtue in Australia of what I would call regulatory complexity.
So when I first started practising, it wasn't the '90s, it was the '80s, you could sort of carry it around. You could read it, it was a nice size font. Then these days it's just impenetrable. You really need to be an expert to navigate the legislation.
Now, one of my favourite propositions is there are exceptions to that. If you're a director, the Director's Duties part of the Corporations Act is actually quite readable. It's short sentences and it's in plain English. So I'd recommend that part of the Act too.
But the regulatory complexity, the cumulative effect, AICD wrote this in their submission in the private-public markets work we're doing, it's a cumulative effect; not just what ASIC does, but it's the whole system. Now, in the world of ASIC, I think what we're doing a lot of work right now, that we're going to publish a paper about it in August, that's designed to make it easier to deal with us. There's some aspects of the rules and laws that we administer that are simply unacceptably opaque. It really is unacceptably opaque. For the lawyers in the room, I'm talking about legislative instruments you can't find unless you happen to know where to look. So all that adds cost and burden.
I think our contribution to productivity will be to streamline, digitise, find ways of dealing with ASIC that are easier and less time-consuming. We've just taken over the registries again from the Australian Tax Office, and we're right in the middle of a stabilisation and modernisation upgrade of those registries, we've been funded by government to do it. So I think that should have a real impact on a lot of people around the country in dealing with us.
The productivity issue, everyone's got a view about that. But I think things should start at home, and as far as ASIC is concerned, we'll do whatever we can to do a better job. And secondly, you can expect me and ASIC to be more, how can I put this, more forthright about where we think the opportunities for law reform are to reduce regulatory complexity, which hopefully will have a positive impact on productivity.
Mark Pownall: Look, I've got a couple of matters, and I'm going to keep trying to lean into the Slido. Some of them look like they are looking for advice from you there, Joe. Let's just quickly cover off on the technology side. I mean, ASIC's out there highlighting scams all the time. I mean, that's pretty technologically demanding. How challenging is that technology environment, and have you got the resources to deal with that?
Joe Longo: Scams are the big subject. From an ASIC perspective, we've been using a provider now for a couple of years to shut down websites, and we've been given special funding to do that. But that is classic whack-a-mole stuff. We're up to 10,000 websites we've shut down. And we're part of - the government's part of the [inaudible] the legislation [inaudible] to deal with scams, and provide a pathway for people to be compensated in certain circumstances.
But I think what I would say about scams is that the artificial intelligence, the technologies, in combination with bad state actors, I mean, North Korea makes - how do you reckon they raise their revenue? So there are some states on the planet that that's their business model. So these scams are on an industrial scale. I know the economists just the last few months, I don't know if anyone's had a chance to listen to those podcasts, it's just awful. So a lot of the misconduct isn't even happening in Australia.
So we're doing whatever we can to warn people. I mean, I've been almost scammed twice in the last few months. I got an email and a phone call from someone who purported to be a special assistant to the Chair of IOSCO, who I just met with, wherever we were, people were staying. And so it had that very [inaudible]. And so for about half an hour, I was getting drawn into this thing. And then I made a call to one of my staff, and very quickly we were told it was a scam. So it could happen to anybody, is I think the main point for me.
The other thing about technology is that it's sort of turbocharging this activity. It's becoming more and more realistic. So now we're - from a public perspective, we're looking at introducing friction into the system. So to start with, the Reserve Bank is saying [inaudible] a huge value for how fast you could get a payment done and how quickly. Now that the major banks, the Reserve Bank, we're looking at ways of slowing things down, so that people think twice about transferring money when they shouldn't.
The other thing about technology - and this is a - is that increasingly we're seeing a lot of people being cold-called. And [inaudible] can't handle that. And they're being persuaded in a very slick operation to transfer money, their superannuation money, my words, generally from what I would call a safe conventional environment, to a high-risk environment. So it might be they'll be talked into creating their own self-managed superannuation fund. And then they'll be talked into investing in those funds in a high-risk property scheme or something. Or not to a self-managed superannuation fund, but to still a regulated space, where the underlying investments are high-risk.
And all of this happens - the campaign would be very blunt about warning people, don't do that. Because very often what happens is that it all happens in a day. So these schemes, the pressure people are under, they'll respond to people online saying, "Oh, you need a superannuation health check, superannuation hygiene check. We can get you higher returns. You're putting your money in the wrong place." And this operation goes from unlicensed people to licensed people. Very often advisers are part of the process. Digital signatures, documents appear very quickly. It all happens on the same day.
Mark Pownall: Yeah, and wipe us out.
Joe Longo: Yeah. So we're worried about that. We think too many people are falling victim to that high-pressure sales. So I can't say often enough, and we used to say it in the '90s, do not kiss your money goodbye. If someone's trying to talk you into transferring large sums of money that are your savings quickly, and you're about to miss out, that's a huge red flag. Stop and think, yeah.
Mark Pownall: And I guess I'm going to just quickly shift the conversation, because I'm conscious of the time, and I do want to get to a couple of these. Director's duties, there's [inaudible]. There's a bit of that in that conversation. But really, the law versus public expectations, where does ASIC sit with that at the moment?
Joe Longo: Well, I give a speech at the MBA, AICD on that very topic. We have high expectations of our directors, and particularly the public companies. We have over three million companies in Australia, and they play a vital role in running business, and the government's [inaudible]. Going back to the private-public market today, it's sometimes said that the reason we have fewer listings is that the expectations of directors on public boards have become so [inaudible] so high is that it's discouraging people from listing in the first place.
There's certainly that concern. But our research, and we've had so many roundtables on this, we've spoken to a lot of people, and just as recently as last week we ran a symposium on this very topic, and a senior investment banker publicly said it's not regulation, it's holding back IPOs. Now, there are things we can do to facilitate the process, to take out unnecessary regulatory aspects of it. And secondly, of course, the ASX is doing a piece of work on that as well. So I think the - I just thought I'd mention that.
As far as directors' duties are concerned, Australia - the way I like to think about it is that if you're a director of a company, no, I don't expect you to do that by yourself. So there's several questions.
One is you're told to rely on your fellow directors and management. And so part of that is asking the right questions and satisfying yourself that you're working with people that you have some confidence in. And that means making an effort. You've got to speak up. You say, well, why should I accept what you're telling me? Ask questions. So it comes back to curiosity. I'm a big believer in curiosity at all times. Be curious. Ask questions. Be interested. Be open-minded. If that's your starting point, you're giving yourself a chance.
The other aspect of directors' duties, I think, is what I would call reasonable reliance. And so that's all about, is understanding your own business. So one of the things we've been saying to the superannuation funds is, OK, you've been good at accumulating and investing, but you're not on top of what your members need. You're not on top of your own data. You're not on top of the processes you need to have to deal with death benefit claims. You're not on top of your own complaints data.
So what I say to directors is, in principle, when I get the opportunity is, if you really understand your own business and how you make money and what the risks are in making that money, then you should be OK. So if you bring these - and if you're honest, as most directors are, and if you bring integrity and diligence to the job, then I'm with the current Chair of Qantas. He gave a great speech at the AICD conference that I spoke at as well a few months ago, John Mullen. And anyone who wants to be a director, you should read that speech. It's such a nice speech. It really raises - his bottom line, it's a privilege being a director. He's learnt so much. So he raises issues with AI and the challenges facing directors. But if you get the chance to be a director of an interesting business or company, then do it.
Mark Pownall: You should take the opportunity.
Joe Longo: That's right, yeah.
Mark Pownall: And if you get a chance to come on stage, you should do it, Joe. So what - I mean, I think - sorry, I'm just being a bit facetious.
Joe Longo: That's all right.
Mark Pownall: But there's a question there about the education role of ASIC. I see you've got a podcast, you're doing all sorts of stuff now. Where's the public interface with ASIC, versus what you do in the private rooms?
Joe Longo: Well, I think our Moneysmart on our website gets over 10 million hits a year. In fact, we're in the middle of upgrading it now. So that's one. It's a really good tool. A lot of people use it to understand super, the go to Moneysmart. So I really recommend Moneysmart.
Part of our public engagement is what I'm doing today, and this campaign that's about to occur. But I think the modern ASIC, the confident, modern, ambitious ASIC that I've been talking about, has to take every opportunity, private and public, to engage. So I say to my Commissioners, my expectation is that you're out and about in the community at least 50% of the time. So I've visited remote communities in the Northern Territory. So has Alan Kirkland, particularly in Western Australia. All of my Commissioners move around the country. We're listening. We're trying to figure out what's really going on.
And in doing that, we also educate, don't we? Because we're - so we have a whole range of panels. We have a very active consumer advisory panel that meets four times a year. And we have panels dealing with governance, markets, digital finance, a whole range of things. And we have media releases and we take people to court. There's all sorts of ways in which we try to get our message out.
But it's complicated. People have busy lives, and sort of cutting through is a challenge. But I'd like to think ASIC is open. So I met a gentleman just before we started this morning, he gave me his card and some material, and I've undertaken to personally ensure that what he's raised with me, he will get some attention from my office. So you contact my office or contact ASIC, then we will engage.
Mark Pownall: And I'm going to slip one more question. I'm going to kind of do a hybrid of what I just asked. And the reforms that you're driving, just in terms of dealing - the Canberra - we call it the Canberra Bundle, of course. But really, you're dealing with a whole bunch of other institutions and a political sphere. How do you drive reform through that? And what are those reforms that are there?
Joe Longo: We play a role with reform, but our fundamental job is to administer the law the way it is. Now, clearly, earlier this week, we had one of our quarterly Treasury liaison meetings in Canberra. So we're constantly engaging with Treasury and with the Assistant Treasurer, Treasurer of Government about our work, the issues we're seeing, matters of that nature.
I think one of the things ASIC's got better at, frankly, is engaging more regularly and [inaudible] with the government as a whole. So a lot of our work transcends Treasury and affects - like AI, for example. A lot of the thinking around what to do about AI has been done in the [inaudible] department. I'll just say DICE, I can't remember what it stands for. And obviously the Department of Finance, Attorney-General's Department.
And so I think the - I reckon a reasonable expectation of the public is, have we got our act together in terms of coordination? And I think Australia does a pretty good job of that. We've got - I'm on the Council of Financial Regulators, a handful of the Reserve Bank, Treasury, ACCC and APRA, we meet regularly. And so we don't have the US problem of a multiplicity of regulators, states and federals. I think that's a good thing about Australia. We have a small number of regulators. And so I think it's a reasonable expectation that we coordinate with one another, and that we talk to one another to solve problems.
And, yes, I spend a lot of time in Canberra, some of you might have noticed, appearing before parliamentary committees of one form or another. And that's just part of the job to do that.
Mark Pownall: And no turf wars between different regulators?
Joe Longo: I don't think so. I think the - I wouldn't call them turf wars. I think that our closest relationship is probably with the Australian Prudential Regulatory Authority. So we're constantly engaging with APRA, because there's a real overlap there. They regulate super in all sorts of ways. We don't regulate super in the way APRA does. We're a conduct regulator. So we're interested in disclosure and director's duties. And so John Lonsdale and his team, they're more worried about meeting prudential standards and stability.
So there's no doubt there's some overlap. And, in fact, some of that overlap is legally represented, for example, in the Financial Accountability Regime. So that's one of the few regimes in Australia that's actually jointly administered by APRA and ASIC. So I think the system encourages people not to get in each other's way. I'm actually getting sensitive about it because, from a business perspective, it's not a good look if you're getting the same question from two regulators and getting in each other's way. John and I were very concerned about avoiding that. So if ASIC's party to anything that looks like that, will you please tell somebody [inaudible].
Mark Pownall: Well, thanks, Joe. I've probably stretched the friendship on timing here, so we'll have to wind it up. Please give Joe a warm round of applause as we welcome our emcee, Alicia Yule, back on stage to provide further thanks and close our proceedings.
