FINANCIAL SERVICES INDUSTRY – AUSTRALIA – REGULATION

Byres puts spotlight on incentives

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Original article by James Eyers, Jonathan Shapiro
The Australian Financial Review – Page: 15 & 18 : 3-May-18

Australian Prudential Regulation Authority chairman Wayne Byres has indicated that the structure of incentives in the financial services industry is currently a bigger concern for APRA than the level of remuneration. He notes that scandals in the sector have largely arisen when incentives have focused too much on growth and sales targets. Byres adds that although the general public’s trust in financial services providers has been tarnished by recent scandals in the sector, there is still a lot of trust in the underlying financial strength of such institutions.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, AUSTRALIA. DEPT OF THE TREASURY, UNIVERSITY OF NEW SOUTH WALES

Massive fines for corporate misconduct

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Original article by Richard Gluyas
The Australian – Page: 1 & 2 : 23-Apr-18

Australian Competition & Consumer Commission chairman Rod Sims says the banking royal commission’s revelations of misconduct in the financial services sector highlights the need for harsher penalties for corporate wrongdoing. He argues that such penalties should act as a real deterrent rather than merely being regarded by management and directors as the cost of doing business. A recent report by the OECD found that penalties for corporate misconduct in Australia are generally much lower than those of comparable countries. Treasurer Scott Morrison has also flagged tougher penalties for companies in response to scandals exposed by the royal commission.

CORPORATES
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIA. DEPT OF THE TREASURY, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, VISY INDUSTRIES AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Banks face fines up to $210m

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Original article by Simon Benson, Ben Butler, Richard Gluyas
The Australian – Page: 1 & 2 : 20-Apr-18

The Federal Government has responded to scandals exposed by the banking royal commission by flagging plans for harsher civil and criminal penalties for misconduct in the financial services sector. Individuals will face fines of up to $A1.05m and companies could be fined up to $A210m in changes to civil penalties. Individuals will also risk maximum jail terms of 10 years and fines of up to $A945,000 for criminal convictions, with companies to be fined up to $A9.45m or 10 per cent of their turnover. The Australian Securities & Investments Commission will also be given more power to investigate and prosecute misconduct in the sector.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. DEPT OF THE TREASURY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, COUNT FINANCIAL LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COLONIAL LIMITED, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

AMP admits dirty deeds and deceptions

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Original article by Ben Butler
The Australian – Page: 1 & 4 : 18-Apr-18

Shares in AMP fell sharply on 17 April after the banking royal commission heard further revelations of misconduct. Jack Regan, AMP’s head of financial advice, told the inquiry of multiple instance in which AMP had misled the Australian Securities & Investments Commission with regard to an investigation into a financial planning scandal. Amongst other things, the inquiry was told that AMP had falsely informed clients that they had been overcharged. Regan also said AMP’s relationship with Clayton Utz raised questions about the impartiality of the law firm’s investigation into the scandal.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLAYTON UTZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

APRA targets banker bonuses

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: W1 & W2 : 5-Apr-18

A review of remuneration in the banking, insurance and superannuation industry shows that senior executives are rarely penalised financially for poor risk management practices or misconduct among staff within their purview. Wayne Byers, the chairman of the Australian Prudential Regulation Authority – which undertook the review – says bank executives should be held more accountable, calling for their bonuses to be deferred or forgone. Frank Mirenzi of Moody’s Investors Service notes that many countries have cracked down on executive pay in the banking sector in the wake of the global financial crisis.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC

NAB first up at banking royal commission

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Original article by James Eyers
The Australian Financial Review – Page: 3 : 13-Mar-18

National Australia Bank executive Anthony Waldron is scheduled to be the first banker to appear before the financial services royal commission. He is expected to be quizzed about NAB’s "introducer program" and fraudulent mortgage loan applications. It is understood that he will tell the commission that NAB has now made the eligibility criteria for the program more stringent. Waldron is also expected to rebut claims by the Finance Sector Union that NAB did not discipline senior staff in regard to the fradulent loan applications.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, FINANCE SECTOR UNION, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSSIE HOME LOANS LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, UBS HOLDINGS PTY LTD

Credit mischief costs banks $50m

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Original article by Joanna Mather
The Australian Financial Review – Page: 4 : 15-Feb-18

The financial services royal commission will initially focus on banks’ responsible lending practices in relation to credit cards, home loans and car finance packages. Meanwhile, new figures show that the Australian Securities & Investments Commission has ordered banks to pay $A50m in refunds and compensation to credit card customers over the last two years. Westpac, ANZ and Citi are among the banks that have been forced to reimburse customers during this period.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, CITIBANK PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

Choice urges Hayne focus on unfair fees

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 15 : 8-Feb-18

Consumer group Choice has used its submission to the banking royal commission to urge the inquiry to examine issues such as the use of trailing commissions in the financial services sector and the methods used to calculate fees and charges. Choice has argued that unfair fees is a key issue that the general public would like the royal commission to address. Choice has also criticised the financial services industry’s self-regulation regime, noting the shortcomings of self-regulation for insurers in particular.

CORPORATES
AUSTRALIAN CONSUMERS’ ASSOCIATION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Carnell: banking inquiry should pass the pub test

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Original article by James Frost
The Australian Financial Review – Page: 15 : 24-Jan-18

Complaints about loans to small business and farmers are among those on which the banking royal commission will accept submissions, according to information released on 23 January. Kate Carnell, the small business and family enterprise ombudsman, previously headed an inquiry into small business loans in 2016. She says the banking royal commission must ensure that all interested parties are given the opportunity to make a submission.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA. OFFICE OF THE AUSTRALIAN SMALL BUSINESS AND FAMILY ENTERPRISE OMBUDSMAN

Banking inquiry to start next month

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Original article by Richard Gluyas
The Australian – Page: 18 : 23-Jan-18

The banking royal commission will hold its first public hearing on 12 February, while its website has begun accepting submissions about alleged misconduct in the financial services industry. The Consumer Action Law Centre has made the first of two submissions, in which it has called upon the royal commission to focus on misconduct that affects disadvantaged consumers in particular. Meanwhile, Craig Williams of Citigroup has downgraded the Commonwealth Bank to a "sell" recommendation in the wake of its money-laundering scandal.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CONSUMER ACTION LAW CENTRE, CITIGROUP PTY LTD, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, HIGH COURT OF AUSTRALIA