The Federal Government has scrambled to appoint former Goldman Sachs banker James Shipton to replace Greg Medcraft as chairman of the Australian Securities and Investments Commission (ASIC).

Financial Services Minister Kelly O'Dwyer said Mr Shipton brings more than 20 years' experience to the corporate regulator after roles at Goldman Sachs as a managing director and head of government and regulatory affairs for Asia Pacific.

Mr Shipton is currently executive director of studies in international finance systems at Harvard Law School in the United States after serving as a commissioner at the Hong Kong Securities and Exchange Commission.

"Mr Shipton brings wide regulatory and financial market knowledge to the position, as well as international experience," Ms O'Dwyer told reporters at a media conference in Canberra.

"I look forward to Mr Shipton making a significant contribution to the important work of ASIC in promoting confidence in Australia's financial system and protecting consumer interests as the incoming chair."

Mr O'Sullivan withdrew his candidacy as ASIC chairman after Labor argued his friendship and fundraising links to Prime Minister Malcolm Turnbull would have conflicted his appointment.

Current ASIC chairman Mr Medcraft retires on November 12, having joined the regulator as a commissioner in 2009.

"Mr Medcraft has overseen significant changes in ASIC's role during his tenure, including reforms to improve the quality of financial advice and financial literacy, and the establishment of a national business names register," Ms O'Dwyer said.

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The Labor-appointed Mr Medcraft has overseen greater scrutiny of the banking and financial services sector and had his term extended as the Government continues to push back calls for a royal commission into unethical and at times unlawful banking behaviour.

Mr Shipton also spoke at the media conference on Tuesday morning.

"The challenges ahead for Australia's financial system and its regulators are significant," he said.

"I intend to ensure that ASIC will be a strong, proactive, efficient, innovative and strategic regulator.

"Financial markets are ultimately built on trust — trust in the integrity of the market and trust in market participants.

"I see ASIC as a guardian of that trust."

Labor also welcomed the appointment of ASIC's new chief.

Mr Shipton's appointment comes days after the leading candidate, Credit Suisse Australia chairman John O'Sullivan, pulled out of contention after a long running campaign by shadow treasurer Chris Bowen.

"Mr Shipton has a good mix of corporate experience and regulatory experience," Mr Bowen said.

In regards to the campaign to derail Mr O'Sullivan's appointment, Mr Bowen said: "The Government's alternative plan would have been inappropriate, would have been unsustainable and would not have met with the Labor Party's bipartisan support."

ASIC deputy chairman Peter Kell will act in the top role until Mr Shipton's term begins in February.

Follow Peter Ryan on Twitter @peter_f_ryan.