In the recently released Royal Commission report, the commission suggested various recommendations to improve the functioning of the financial industry. In its investigation, the Royal Commission highlighted various misconducts, which the major banks of Australia were involved in and it suggested a number of recommendations and referrals to support the fair and proper functioning of the financial system. These recommendations were vital for the participants of the finance industry in order to gain back the trust of the customers.
Currently, Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are focused on implementing the lessons of the Royal Commission, and they are making sure that the momentum and the pace of these changes are maintained.
Recently ASIC Chair, James Shipton made a speech, in which he noted the criticisms about the approach to litigation. For Mr. James Shipton, it is concerning that despite the Royal Commission, there is still resistance to a meaningful mindset change which unfortunately perpetuates an unhelpful culture of resistance and reluctance.
In response to the emerging criticism towards ASICâs approach to litigation, Mr. James Shipton assured that ASIC will always act within the boundaries and procedures and ASIC is doing the job the community expects it to do.
He suggested that the financial institutions must respond responsibly to the challenge and not with resistance and reluctance to the job that ASIC is expected to do. Mr. James Shipton has advised the financial institutions to act fairly and professionally, and he also suggested that, if they are confident about their governance, management, and operational systems, there is nothing to worry about.
He has also advised the financial institutions that ASIC is not creating new obligations.Â He has suggested the officers and directors to lean into the future by following the existing guidance coming from the Australian Prudential Regulation Authority, ASIC and the Royal Commission.
In both the Royal Commissionâs Interim and Final Reports, Commissioner Hayne stated about the six basic norms of behavior - they are:
- Obey the law
- Be fair
- Do not mislead or deceive
- Provide services that are fit for purpose
- When acting for another, act in the best interests of that other
In his speech, Mr. James Shipton emphasized one particular aspect â fairness, which is very important to ensure financial services are provided efficiently, honestly and fairly by the financial institutions. ASIC is promoting best practice and innovation in regulation while developing the regulatory frontier.Â Last year, ASIC adopted a âWhy not litigateâ which is ASICâs own strategic construct, aimed at reducing future misconduct by financial industry participants.
In the conclusion of his speech, James Shipton told that a meaningful change within the financial industry is required to make Australiaâs financial system fair, strong and efficient.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.