Royal Commission into misconduct in the banking, superannuation and financial services industry is formally established
On 18 December 2017, in joint media release, the Attorney-General, Senator George Brandis QC, and the Treasurer, Scott Morrison MP announced the formal establishment of the Royal Commission into alleged misconduct in Australia’s banking, superannuation and financial service industry.
The Commission is to be led by former High Court judge, Kenneth Hayne AC QC (Commissioner). The subjects of the Commissioner’s inquiry are to include:
- the prevalence of misconduct within the financial services sector and whether referrals should be made for criminal or other legal proceedings;
- whether the conduct, practices, behaviour or business activities by financial service entities fall below community standards;
- if so, whether this is attributable to cultural or poor governance practices particular to specific entities, the relevant industry or relevant sub-sector, and what connection there may be with prevailing risk management recruitment and remuneration practices at each of these levels;
- whether the use by financial services entities of superannuation members’ retirement savings meets community standards and expectations or is otherwise in the best interest of those members;
- the effectiveness of mechanisms for redress for financial services consumers who suffer misconduct;
- the effectiveness and ability of regulators of financial services entities to identify and address misconduct;
- the adequacy of existing laws, internal systems and forms of industry self-regulation; and
- whether changes to the legal framework, practices within financial services entities or financial regulators are required to minimise the likelihood of misconduct by financial services entities in the future.
The following entities will now be captured by the inquiry:
- banks and other authorised deposit-taking institutions;
- insurers, including general insurers and life insurers;
- financial service providers, that is, AFSL licence holders and their authorised representatives;
- any person or entity that is a Registrable Superannuation Entity licensee or has any connection to a licensee; and
- mortgage brokers or any intermediary between borrowers and lenders.
The Commissioner may submit an interim report no later than 30 September 2018, but he must submit a final report of the results of his inquiry, and his recommendations, no later than 1 February 2019.
Gilchrist Connell are experts in providing commercially incisive advice on financial services and regulatory matters and in forcefully representing our clients in proceedings and formal inquests. Our depth of expertise and experience is ideal to assist individuals and entities alike who may require assistance in relation to the Royal Commission, or any matter where the protection of your legal rights is required.
We will keep you informed of developments as they happen.
Date: 20 December 2017