A Royal Commission report into misconduct in the banking, superannuation and financial services industry has recommended that the official regulators crack down harder on the unsatisfactory practices it uncovered.
In his report, Royal Commissioner, Kenneth Hayne said both the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) should work together to strengthen regulation of the industry.
“The law should be amended to oblige each of APRA and ASIC to co-operate with the other, share information to the maximum extent practicable and notify the other whenever it forms the belief that a breach in respect of which the other has enforcement responsibility may have occurred,” the Commissioner said.
“ASIC and APRA should prepare and maintain a joint memorandum setting out how they intend to comply with their statutory obligation to co-operate.”
He said the memorandum should be reviewed biennially and ASIC and APRA should report each year on the operation of and steps taken under it in its annual report.
The Royal Commission’s recommendations were welcomed by both APRA and ASIC with the Chair of APRA, Wayne Byres saying the Commission had identified a number of areas where the Authority’s framework could “and should” be strengthened.
“Many of these improvements are already in train,” Mr Byres said, “and APRA is committed to delivering on them”.
He said the recommendations would require APRA to increase the breadth and depth of its supervision but it will need to be appropriately resourced to do so.
“The Royal Commission also concluded that APRA needs to adopt a stronger stance in relation to its enforcement activities,” he said.
ASIC said it had already responded to the Royal Commissioner’s interim report which identified its enforcement culture as the focus of change.
It said that following the interim report: “ASIC committed to accelerating enforcement activities, conducting more civil and criminal court actions against larger financial institutions and, as a starting point for all enforcement matters, asking the question “why not litigate?”
The Royal Commission’s 496-page report can be accessed at this PS News link.
