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Royal Commission transgressors face stiffer penalties
The Australian Securities and Investments Commission (ASIC) has vowed to actually use new legislation giving it the ability to pursue harsher civil and criminal sanctions against banks and their executives who have breached corporate and financial services law.
With the regulator currently looking at matters referred to it by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, ASIC welcomed passage through the Senate of the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill which not only strengthens existing penalties but introduced new ones.
The legislation, which expected final sign-off in the House of Representatives this week allows for the maximum prison penalty for the most serious offences to be increased to 15 years and for civil penalties for companies to operate under an increased cap of $525 million.
As well, the maximum civil penalties for individuals will increase to $1.05 million.
Commenting on the passage of the legislation ASIC’s new deputy chairman, Daniel Crennan QC said it represented a significant step for the regulator’s enforcement regime and represented the culmination of ASIC’s recommendations.
“Without this bill very significant aspects of the law lacked sufficient penalties to properly punish corporate wrongdoing in Australia. In part, the core obligations owed by banks and other financial services licensees to the citizens of Australia did not carry any penalties,” he said. “‘ASIC will now be in a stronger position to pursue harsh civil penalties and criminal sanctions against those who have breached the corporate laws of Australia.”
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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