The Senate inquiry into the performance of the Australian Securities and Investments Commission will conclude that ASIC needs to be a more proactive and effective corporate law enforcer, and the recommendations ASIC put to it on Thursday will nudge it in that direction if they are adopted.
ASIC has, however, passed up an opportunity to bring on a bigger debate about what Australia wants from its corporate regulator, and what is needed to achieve it.
ASIC has tended to be slow to respond to signs of wrongdoing, including information from whistleblowers. It has stretched a budget that has not kept up with the expansion of its reach and the growth of the financial sector by becoming what the IMF calls a "desk-top rather than on-site" regulator, one that uses cost-benefit algorithms to decide whether to pursue cases.
All regulators are budget-constrained, of course. Australian Competition and Consumer Commission chairman Rod Sims noted on Wednesday that every new investigation the ACCC took on came at a cost to others. ASIC has also already made changes to improve its responses to whistleblowers and complaints.
More fundamental questions about how ASIC is resourced and structured have been raised by enforcement lapses, including its soft response to evidence of misbehaviour in CBA's financial planning arm, the issue exposed by Fairfax Media that triggered the Senate inquiry.
The crucial question of how much money is needed to create a regulator that meets community expectations is not addressed by ASIC in its submission.
"ASIC can only achieve what it is resourced to do," it says, without elaborating.
Different structures for ASIC that could achieve better enforcement outcomes are also not discussed, although they are known by the new government, where Treasurer Joe Hockey and Assistant Treasurer Arthur Sinodinos are the key players.
Overseas templates for a split that would see ASIC focused more squarely on its enforcement tasks by being relieved of its labyrinthine administrative functions exist - in Britain, for example. They are not referred to in ASIC's submission, and have been deliberately left out.
The Senate's inquiry into the regulator will be followed by the much bigger inquiry into Australia's financial system that Hockey is setting up. ASIC obviously believes that Hockey's inquiry is the best venue for structural and funding issues to be considered.
There is some risk in leaving them out. Hockey is still assembling a panel to conduct the inquiry and another for an international advisory board that will assist. He has not announced the terms of reference, and when he does, they will not put ASIC at the centre. The banks will get that honour.
The inquiry will also not seriously challenge Australia's "Twin Peaks" structure for supervision of the financial system. The consensus, which Hockey supports, is that it served the country well when it was stress-tested by the global crisis.
ASIC will be in the inquiry mix, however, and it is keeping its powder dry because it is confident that funding and structural issues will be canvassed - if necessary as a result of ASIC itself putting them on the table.
The changes it has proposed to the Senate inquiry would strengthen its arm.
It wants maximum penalties for civil and criminal breaches increased and says it is conducting its own review. Almost all civil penalties have been capped at $200,000 for more than a decade. They are dwarfed by the losses caused by many of the breaches ASIC deals with, and by penalties for equivalent breaches overseas.
It recommends, as it has before, that financial advisers be required to pass a national examination, and says firms should be forced to check the curriculum vitae of advisers before hiring, to stop "bad apples" in the industry circulating.
It wants its banning powers extended to allow it to prevent banned advisers from managing financial services businesses, and wants the definition of whistleblowers in the Corporations Act expanded to include and protect more people, including former employees, accountants, auditors and business partners. It wants its financial and credit sector licensing regime toughened up, to remove approval as the default action, and require applicants to make the case.
It also wants greater search warrant powers. Under its own enabling law it can conduct searches related to potential breaches of the laws it supervises, but they are limited in scope. It can search more widely using a Crimes Act warrant, but only for suspected criminal offences, and evidence that is collected isn't available for civil cases. ASIC would like the Crimes Act's search powers for the laws it oversees.
Some will see that as an overreach, but the question there and with the subterranean issues of funding and structure remains: how proactive should ASIC be, and what resources are we prepared to devote to get it there?