On 30th November 2017, the Federal Government announced a Royal Commission into misconduct in the Financial Services industry. The CEOs and Chairmen of the Big 4 banks requested the Government undertake a Royal Commission in order to provide assurance on the integrity of Australian financial services. The Government allocated $75million in funding for the Royal Commission and appointed the Honourable Kenneth Hayne AC QC to lead the Royal Commission. He will provide an interim report by September 2018 with a final report within 12 months.
The Royal Commission Act empowers Royal Commissions with considerable power, including up to six months’ imprisonment for a person failing to provide the commission with requested documents or failing to provide evidence.
Protiviti is well placed to assist any financial services institution to prepare for the Royal Commission with a diverse team of financial services experts.
Commissioner Hayne’s Final Report on the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry sets out 76 recommendations designed to address four thematic observations.
This round of hearings explored the causes of misconduct and conduct falling below community standards and expectations by financial services entities (including culture, governance, remuneration and risk management practices), and focused on possible responses, including regulatory reform.
The sixth round of hearings explored issues associated with the sale and design of life insurance and general insurance products, the handling of claims under life insurance and general insurance policies, dispute resolution mechanisms and the administration of life insurance by superannuation trustees.
The fifth round of public hearings explored the potential misconduct on APRA–regulated Registrable superannuation entity licences. Australians had superannuation savings comprising approximately $2.6 trillion of assets. RSE licenses held approximately $1.7 trillion of these assets.
The fourth round of public hearings focussed on issues affecting Australians who live in remote and regional communities, which relate to farming finance and interactions between Aboriginal and Torres Strait Islander people and financial services entities.
The third round of hearings explored the potential misconduct of financial service organisations with respect to small and medium enterprises.
The second round of hearings explored existing issues around fees for no service and the provision of inappropriate advice. The need to engage openly and honestly with the regulators was also very clearly highlighted.
In light of emerging observations from the Royal Commission and increasing pressure on the regulator to take a tougher stance, the regulatory penalties and costs associated with remediating misconduct are only going to increase in the future.
Protiviti provides further detail on the key developments that have emerged as the Royal Commission has progressed. This includes a summary of the intentions of the Commission to produce multiple papers during the course of the Royal Commission and the subject of these papers.
A summary of the key developments from the Royal Commission evident prior to the public hearings commencing on 13 March, 2018.
The scope of work outlined when the Royal Commission was announced is significantly broader than originally anticipated. In this paper, Protiviti provides a view on the scope of works, outlining several considerations based on the Terms of Reference.
Protiviti's provides an overview of the intentions of the Royal Commission, outlining the entities in scope and what the Royal Commission is aiming to address.
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