September 7, 2017
The senior managers of financial services business may be banned from the industry for breaching legal obligations under new proposals put forward by the Federal Government to expand the powers of ASIC.
The proposals were made by the ASIC Enforcement Review Taskforce in a recently released position paper and follow recommendations in the Financial System Inquiry that ASIC’s banning powers should be enhanced to improve the accountability of managers in the financial services sectors.
Currently, ASIC has the power to ban individuals from providing financial services where they have breached a financial services law, been convicted of fraud, were judged to be not of ‘good fame or character’, or were not adequately trained or competent to provide financial services.
Under these proposals, senior managers of financial services businesses would be banned if they were found not to be fit and proper for the role, not adequately trained or not competent for the role.
Senior managers could also be banned if they had been involved in a business that been wound up or liquidated, subject to outstanding determination from the Australian Financial Complaints Authority, or where they had breached the sections of the Corporations Act relating to duties of a senior manager.
The Minister for Revenue and Financial Services, Kelly O’Dwyer said the proposed changes would work alongside the Banking Executive Accountability Regime (BEAR) aimed at senior executives and directors in the banking sector.
“The Taskforce positions would complement the BEAR by enhancing ASIC’s power to hold individuals in the financial services and credit sectors to account for their conduct, in line with the conclusions of the Murray Inquiry,” O’Dwyer said.
The paper, which is available from the Treasury website, is open to consultation until 4 October 2017.