The Australian Securities and Investments Commission (Asic) published a second assessment report of the country’s advice industry on 11 September.
The regulator said it has 29 investigations underway from case studies directly linked to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (FSRC).
Four are before the court and another two are being considered by the Commonwealth Director of Public Prosecutions (CDPP) for potential criminal action.
A further 17 FSRC case studies are under review to determine if investigations are warranted or enforcement action is available to Asic.
The financial watchdog added that the FSRC made 13 referrals to Asic, all of which are under investigation and one is also in litigation.
Dedicated enforcement programme
After the Royal Commission, Asic unveiled its dedicated enforcement programme to tackle the issues found during the long running sector review.
As at 31 July 2019, there are 88 enforcement investigations and 17 court actions underway, of which 86 relate to Australia’s big banks, AMP, and their respective subsidiaries.
In addition, 59 individuals are under investigation and eight individuals were the subject of court action.
A total of 82 outcomes had been achieved, including criminal, civil and administrative actions, and court enforceable undertakings.
Asic said it “has undertaken targeted recruitment of staff to work on these matters”.
“In addition, Asic is retaining external law firms, legal contract staff and counsel across the majority of the matters to expedite this work. This work is part of Asic’s wider enforcement effort.”
As at 31 July 2019, across all sectors, Asic has 311 ongoing investigations covering a range of misconduct offences.
The regulator said it “is seeking to expedite the finalisation of all enforcement matters through the strategic use of the increased funding from government”.
On-site reviews
The regulator also discussed its Close and Continuous Monitoring (CCM) programme and its Corporate Governance Taskforce.
Since October 2018, CCM on-site reviews have seen Asic staff on-site at the major banks and AMP for 164 out of 222 working days, and involved meeting with more than 550 banking staff at all levels.
It will report its key observations and findings across these institutions “in the coming months”, and the two early areas of focus have been breach reporting and complaints handling.
The taskforce is currently completing a “targeted, thematic assessment of the corporate governance practices of 21 of the 100 companies on the Australian Stock Exchange.
The watchdog said it will soon be publishing the taskforce’s first report, which focuses on director and officer oversight of non-financial risk in seven large financial services companies.
This will be followed by the release of a report on executive remuneration practices in the 21 companies by the end of 2019.
In preparing these reports, the taskforce has reviewed over 43,000 documents and completed 97 interviews with boards and management.
Future plans
The regulator said: “Consistent with Asic’s strategic priorities 2019–20, we continue to call out instances of consumer harm or unfair outcomes for consumers, and to take action to address these concerns using our full regulatory toolkit.
“Some of our proposed actions would provide interim consumer protections ahead of broader legislative reform being considered by parliament.”
As one area of its plans, Asic said it will review life insurance commissions in 2021.
