Measuring Regulation and Regulatory Performance: Benchmarking Through Key Performance Indicators

The Australian Securities and Investments Commission has embarked on a fundamental shift in policy. Five key priorities have been identified: (1) focus on outcomes; (2) develop initiatives to help retail investors manage and protect wealth; (3) introduce new investigative and other techniques to reduce identified or perceived systemic problems; (4) reduce red-tape in delivery of administrative function; and(5) facilitate inward and outward investment in capital markets with minimum roadblocks to investment flows, commensurate with adequate protection. These are enveloped within a wide-ranging strategic review informed by extensive stakeholder consultation. The review offers a time-limited opportunity to reconstitute the parameters of capital market regulation. Its success, however, is dependent on the degree to which the agency is successful in explicitly aligning the interests of market participants to its conception of what constitutes integrity. This requires that performance indicators are extended to wider market behavior, with progress measured against the relative restraining efficacy of formal and informal nodes of control.