The financial sector in Australia is open. This means that it is not very difficult for any new establishment to start operating in the prevailing financial market provided certain regulatory prerequisites are satisfied. The financial sector in the country allows firms to compete in a healthy manner with other new or pre existing firms in the country.
An open financial system also means that financial institutions are open to competition from overseas nations. If the prevailing financial system was not strong enough, the international financial institutions would have hunted for greener pastures instead of venturing out in Australia.
Many financial sector reforms in Australia have been implemented keeping in mind globalization. With globalization, trade barriers have disappeared in most of the cases. In the year 1997, the government in Australia launched the “Financial System Inquiry” or the more commonly referred “Wallis Inquiry”.
The “Wallis Inquiry” introduced a set of financial sector reform in Australia. Due to the financial sector reform in Australia, the entire framework of the financial make up of the country was revamped. The country started following a new model, which was referred to as “twin peaks” structure in the country.
This financial sector reform in Australia gave rise to two prominent regulators in the country.
Australian Securities and Investment Commission or ASIC
Australian Prudential Regulation Authority. Under the Financial Services Reform Act, the Australian government introduced financial sector reforms in Australia.
The following immediate effects were observed:
A common code of conduct was required to be maintained by investment providers.
All financial products in the country were required to have a regime, which would be transparent.
All providers of financial services needed to have a uniform licensing regime.
As a part of the financial sector reform in Australia, the government appended regulatory regime pertaining to financial services with financial reporting as well as disclosure regime.
Last Updated on : 26th June 2013