On 24 November 2016, the Standing Committee on Economics (a Committee of the House of Representatives) tabled its first report on a review of the four major banks.
You may have assumed this report is only about the banking sector.
It is not. It has implications for the financial services sector more generally.
Amongst its numerous recommendations are the following measures:
- establishing a Banking and Financial Sector Tribunal by 1 July 2017 that replaces the Financial Ombudsman Service, Credit and Investments Ombudsman and Superannuation Complaints Tribunal. Also, if necessary relevant legislation and the planned industry funding model for ASIC should be amended to ensure that the costs of the new Tribunal are borne by the financial sector;
- by 1 July 2017, requiring AFSL holders to publicly report on any significant breaches of their licence within five business days of reporting breaches to ASIC, or within five business days of ASIC or another regulatory body identifying the breach. The public report should describe the breach and how it occurred, steps taken to ensure the breach does not reoccur, the names of senior executives responsible for the team/s where the breach occurred and the consequences for those executives (including, if the senior executives were not terminated, why not);
- giving ASIC the power to collect recurring data about an AFSL holders internal dispute resolution (IDR) scheme so that ASIC can:
- identify and (where appropriate) take action against entities that may not be complying with IDR requirements; and
- determine whether changes to IDR requirements are necessary;
- requiring ASIC to respond to all alleged breaches of ICR requirements and notify complainants of any action taken, and if no action was taken, why this was appropriate
- establishing an annual public reporting regime for the wealth management industry, by end-2017, to provide detail on the quality of the industry, misconduct by participants in the industry and associated consequences (to be reported by ASIC on an industry and individual service provider basis)
- requiring AFSL holders to advise breaches of the law by a financial adviser to each of the adviser’s clients.