Joe Longo, senior adviser at law firm Herbert Smith Freehills, has been confirmed as the new chair of ASIC.
Mr Longo worked as general counsel for Deutsche Bank in both London and Hong Kong for 17 years, prior to which he was ASIC’s national director for enforcement.
He replaces James Shipton, who decided to resign his position in the wake of an expenses furore (despite the findings of the independent review of the remuneration issues making no adverse findings regarding Mr Shipton and deputy chair Daniel Crennan QC).
A review was called after an audit of ASIC’s financial statements by the Australian National Audit Office (ANAO) found that total remuneration paid to both Mr Shipton and Mr Crennan may have exceeded limits set by Remuneration Tribunal Determinations – largely due to relocation expenses.
The concerns focused around Mr Shipton’s relocation expenses from the United States to Sydney, totalling around $110,000 (largely stemming from tax advice provided by accountancy giant KPMG), as well as nearly $70,000 of rental reimbursements paid to Mr Crennan when he relocated from Melbourne to Sydney in early 2019.
Mr Shipton repaid the $118,557 paid by ASIC for tax advice. Mr Crennan repaid $69,621 paid by ASIC for accommodation payments.
In January, it was announced that Mr Shipton would also be stepping down from his position after both he and Treasurer Josh Frydenberg “agreed that it [was] in the best interests of ASIC” that he should.
New deputy chair
As well as a new chair, the government has also announced that Sarah Court, who works as a commissioner at the Australian Competition and Consumer Commission (ACCC), will become the new deputy chair, alongside existing deputy chair Karen Chester.
The former lawyer oversees the ACCC’s enforcement and litigation program and is chair of the Commission’s Enforcement Committee, Compliance Committee, Consumer Data Right Committee and Legal Committee.
She also sits on the Mergers Review Committee and the Competition Exemptions Committee and is also an associate commissioner of the New Zealand Commerce Commission.
Announcing the new appointment, Treasurer Josh Frydenberg said: “I congratulate Mr Longo and Ms Court on their appointments. They are both highly qualified and experienced individuals with a deep understanding of both the private and public sectors. ASIC will benefit from their understanding of regulatory settings, insight into business and their strong leadership.”
Mr Frydenberg also thanked the outgoing chair for his contribution and commitment to ASIC since his appointment in 2018.
“Mr Shipton has shown great commitment and dedication to ASIC during his three years as chair and I thank him for his service. I look forward to his continued assistance during the transition and wish him all the best in his future endeavours,” Mr Frydenberg said.
ASIC chair James Shipton said: “On behalf of the ASIC commission and team I’d like to congratulate Joe Longo on his appointment as the next ASIC chair and Sarah Court as an additional deputy chair.
“Joe is known to many at the agency from his time as National Director of Enforcement from 1996-2000 and subsequent interactions as a lawyer at Herbert Smith Freehills.
“His wealth of domestic and international experience will serve ASIC well in the vital work it does in supporting the financial system and economy, especially as Australia recovers from the downturn caused by the COVID-19 pandemic.
“We are also pleased to welcome Sarah Court, who joins as deputy chair from the Australian Competition and Consumer Commission (ACCC). Again, we know Sarah very well and appreciate the skill and experience she brings from our regulatory counterpart,” he said.
“We will work with Joe and Sarah over the coming weeks to manage a smooth transition to his leadership of the organisation.”
Noting the appointment of Ms Court to ASIC, the ACCC chair, Rod Sims, commented: “This is a well-deserved reflection of the experience, expertise and wisdom Sarah brings to the table.
“ASIC’s gain is very much our loss. Sarah was first appointed as an ACCC commissioner in May 2008 and reappointed for an impressive third term in 2018. In her 13 years at the ACCC, Sarah has made an incredibly significant contribution to the agency and its work.”
“We pass on our congratulations to Sarah in her new role.”
Ms Court stated: “I will miss the ACCC, but I am very much looking forward to engaging with the opportunities at ASIC.”
New statement of expectations
As well as announcing the new appointment, Treasurer Josh Frydenberg also said that the government would be issuing ASIC a new Statement of Expectations and introducing legislation to establish the Financial Regulator Assessment Authority (FRAA).
The new Statement of Expectations will outline the government’s priorities for, and expectations of, ASIC.
“The statement will make clear that the government expects the commission, as a whole, to operate as a strategic board and that all operational matters are the responsibility of the chair, who is the accountable authority.”
The statement will “also make clear that the government expects ASIC to support Australia’s economic recovery from the COVID pandemic,” according to Treasury.
The Statement of Expectations will be issued following the commencement of the new chair and new deputy chair.
Meanwhile, the new FRAA will provide an external framework for “assessing the effectiveness and capability of both ASIC and the Australian Prudential Regulation Authority”.
The FRAA will consist of three “independent statutory appointees” together with the Treasury Secretary.
Reviews will be conducted once every two years and as directed by the Treasurer.
Treasury outlined that, in its first year, the FRAA will be tasked with “assessing the effectiveness and capability of ASIC so as to assist the incoming chair in ensuring ASIC is operating effectively and consistent with the government’s Statement of Expectations”.
Legislation to implement the FRAA will be introduced by the middle of this year, which follows the recommendation of the financial services royal commission.
[Related: Shipton agrees to step down as ASIC chair]