ASIC cannot afford to stand still: Longo

Outgoing ASIC chair Joe Longo has used his final appearance before the Parliamentary Joint Committee on Corporations and Financial Services to defend the regulator's enforcement record while warning that funding constraints and rapid technological change could threaten its future effectiveness.

Longo said ASIC had become a "modern, confident and ambitious regulator" during his five-year tenure, pointing to a sharp increase in enforcement activity and penalties.

Longo said ASIC had more than doubled the number of formal investigations undertaken annually and quadrupled the value of penalties secured since 2020. The regulator has already obtained approximately $484 million in penalties this financial year, excluding matters still awaiting court approval.

Highlighting major enforcement actions, he cited penalties against ANZ, Westpac and proceedings involving AustralianSuper, Cbus and the ASX as evidence of ASIC's willingness to pursue large institutions and systematic misconduct.

However, Longo warned ASIC's ability to sustain its current enforcement program could be undermined by the declining balance of its Enforcement Special Account (ESA), which funds significant litigation matters.

"Absent replenishment, this will impede ASIC's ability to maintain its current enforcement program," he said, noting the regulator is engaging with Treasury and the government on the issue.

Longo also called for greater resourcing across the broader enforcement system, arguing that increased criminal referrals would place additional pressure on the Commonwealth Director of Public Prosecutions.

Looking ahead, he identified maintaining public trust, balancing enforcement with regulatory reform, reducing regulatory complexity and adapting to technological change as key priorities for the regulator.

Artificial Intelligence (AI) emerged as a major focus, with Longo describing technology as both a challenge and an opportunity for ASIC. He said the regulator must remain "institutionally engaged and curious" about emerging technologies or risk becoming "irrelevant".

To strengthen its capabilities, ASIC is trialling advanced supercomputing infrastructure in partnership with research institutions to improve its ability to detect misconduct and identify risks earlier.

Longo will be succeeded by current deputy chair Sarah Court, who appeared alongside him at the hearing and will take over leadership of the regulator as ASIC enters its next phase.