- ASIC reveals 66 bank inquiries with more on the way
- By BEN BUTLER
- 29/06/2019 Make a Comment
- Contributed by: Tony_R ( 1 article in 2019 )
ASIC chairman James Shipton.
The corporate regulator has told the Morrison government it is running a whopping 66 investigations and court cases involving the big four banks, Macquarie and AMP, with more to come as it tries to “expedite” a mountain of work coming out of last year’s financial services royal commission.
In a brief prepared for the winner of May’s federal election, the Australian Securities & Investments Commission also said its business registers needed “urgent government investment” and revealed it had executive bonuses under close scrutiny at 21 ASX 100 companies as part of a new, more aggressive monitoring program.
The brief, obtained under freedom-of-information laws, also reveals that ASIC continues to investigate two mystery criminal referrals made to it by Kenneth Hayne last year, which The Australian has previously reported involve two of CBA, NAB and AMP.
And it shows ASIC plans to conduct public hearings — its first in its 21 years of existence — as early as next month to grill bankers over whether they are meeting responsible lending standards.
In the incoming government brief, ASIC said referrals from the banking royal commission were managed as part of its wealth management task force, which for the past few years has been investigating the scandal-plagued financial advice operations of the big banks, AMP and Macquarie.
It said that as of April 30, the wealth management team was running 66 enforcement investigations or court cases that “relate to the major banks, AMP and Macquarie Group, including their subsidiaries”.
“In addition, 35 individuals are the subject of investigation and nine individuals are the subject of court action,” it said.
At 101 investigations in total, wealth management would represent about a third of the 300 probes the regulator said it was running.
ASIC said it was already investigating four of the 13 referrals it received from the royal commission — including the two mystery referrals made by Mr Hayne during proceedings.
As The Australian has previously reported, in his final report in February Mr Hayne said ASIC told him last year it was considering sending a brief of evidence to prosecutors about one institution. In November he referred two others to ASIC for potential prosecution. The three criminal probe targets were not identified by Mr Hayne but The Australian has previously reported that they were CBA, NAB and AMP.
“The remaining nine have been assessed and investigations will commence shortly,” ASIC said in its incoming government brief.
“Of these, only two attract penalties if the misconduct is proved. Nonetheless, ASIC is working to expedite those investigations.”
ASIC said it had 14 of the case studies mentioned at the commission under investigation and was in court over another.
“Many of these were commenced prior to the FSRC,” it said. “We also have a further 16 other case studies under assessment.”
Banks are also at the centre of ASIC’s “close and continuous monitoring” program, which involves installing the regulator’s staff in corporate offices.
ASIC said it had conducted more than 250 interviews with “banking staff at all levels”, reviewed “thousands of documents including information provided to the boards” and had its staff embedded “in one or more institutions for more than half of the business days since late October 2018”.
It said it was targeting 21 ASX 100 companies for close scrutiny of “executive remuneration and specifically board decision-making in relation to the granting and vesting of the variable components of executive remuneration”.
Companies targeted included the seven largest financial services companies and another smaller wealth player, with the remainder “from a variety of industries”, it said.
“ASIC is also reviewing public disclosures regarding their corporate governance practices to ensure that they are reflective of what happens in practice.”
The regulator said it would release a report on problem areas later this year and “if misconduct is uncovered during this review, necessary action will be taken in relation to the findings”.
Banks are also set to face unprecedented public hearings into their responsible lending practices sooner rather than later.
The royal commission investigated the overuse of household spending benchmarks by banks and ASIC is currently before the Federal Court fighting Westpac over the issue.
ASIC has had the power to conduct public hearings into whether it should use its powers since 1998, but the regulator has never previously used them.
On Thursday, chairman James Shipton said ASIC would use the power for the first time to hold hearings into responsible lending that would “robustly test some of the issues and views that have been raised in submissions”.
ASIC’s regulatory work program, provided to the government as part of the brief, shows that “public hearings are contemplated for July/August 2019”, with new guidance to be issued by the end of the year.
The regulator also used the brief to plead for an urgent injection of money to fix up its registry system, much of which runs on a decades-old information-technology platform.
Efforts to overhaul the registry have gone nowhere for years, with a government plan to offload it to the private sector abandoned in December 2016 after then-treasurer Scott Morrison said the sale would not raise as much money as hoped.
In its brief, ASIC said it welcomed government efforts to modernise registers across the federal public sector and supported the introduction of director identification numbers, which are designed to crack down on company phoenixing.
“A modernised business registry system will provide the backbone for transforming the way business interacts with government, making it simpler and faster to start and run a business,” it said.
In a brief prepared for the winner of May’s federal election, the Australian Securities & Investments Commission also said its business registers needed “urgent government investment” and revealed it had executive bonuses under close scrutiny at 21 ASX 100 companies as part of a new, more aggressive monitoring program.
The brief, obtained under freedom-of-information laws, also reveals that ASIC continues to investigate two mystery criminal referrals made to it by Kenneth Hayne last year, which The Australian has previously reported involve two of CBA, NAB and AMP.
And it shows ASIC plans to conduct public hearings — its first in its 21 years of existence — as early as next month to grill bankers over whether they are meeting responsible lending standards.
In the incoming government brief, ASIC said referrals from the banking royal commission were managed as part of its wealth management task force, which for the past few years has been investigating the scandal-plagued financial advice operations of the big banks, AMP and Macquarie.
It said that as of April 30, the wealth management team was running 66 enforcement investigations or court cases that “relate to the major banks, AMP and Macquarie Group, including their subsidiaries”.
“In addition, 35 individuals are the subject of investigation and nine individuals are the subject of court action,” it said.
At 101 investigations in total, wealth management would represent about a third of the 300 probes the regulator said it was running.
ASIC said it was already investigating four of the 13 referrals it received from the royal commission — including the two mystery referrals made by Mr Hayne during proceedings.
As The Australian has previously reported, in his final report in February Mr Hayne said ASIC told him last year it was considering sending a brief of evidence to prosecutors about one institution. In November he referred two others to ASIC for potential prosecution. The three criminal probe targets were not identified by Mr Hayne but The Australian has previously reported that they were CBA, NAB and AMP.
“The remaining nine have been assessed and investigations will commence shortly,” ASIC said in its incoming government brief.
“Of these, only two attract penalties if the misconduct is proved. Nonetheless, ASIC is working to expedite those investigations.”
ASIC said it had 14 of the case studies mentioned at the commission under investigation and was in court over another.
“Many of these were commenced prior to the FSRC,” it said. “We also have a further 16 other case studies under assessment.”
Banks are also at the centre of ASIC’s “close and continuous monitoring” program, which involves installing the regulator’s staff in corporate offices.
ASIC said it had conducted more than 250 interviews with “banking staff at all levels”, reviewed “thousands of documents including information provided to the boards” and had its staff embedded “in one or more institutions for more than half of the business days since late October 2018”.
It said it was targeting 21 ASX 100 companies for close scrutiny of “executive remuneration and specifically board decision-making in relation to the granting and vesting of the variable components of executive remuneration”.
Companies targeted included the seven largest financial services companies and another smaller wealth player, with the remainder “from a variety of industries”, it said.
“ASIC is also reviewing public disclosures regarding their corporate governance practices to ensure that they are reflective of what happens in practice.”
The regulator said it would release a report on problem areas later this year and “if misconduct is uncovered during this review, necessary action will be taken in relation to the findings”.
Banks are also set to face unprecedented public hearings into their responsible lending practices sooner rather than later.
The royal commission investigated the overuse of household spending benchmarks by banks and ASIC is currently before the Federal Court fighting Westpac over the issue.
ASIC has had the power to conduct public hearings into whether it should use its powers since 1998, but the regulator has never previously used them.
On Thursday, chairman James Shipton said ASIC would use the power for the first time to hold hearings into responsible lending that would “robustly test some of the issues and views that have been raised in submissions”.
ASIC’s regulatory work program, provided to the government as part of the brief, shows that “public hearings are contemplated for July/August 2019”, with new guidance to be issued by the end of the year.
The regulator also used the brief to plead for an urgent injection of money to fix up its registry system, much of which runs on a decades-old information-technology platform.
Efforts to overhaul the registry have gone nowhere for years, with a government plan to offload it to the private sector abandoned in December 2016 after then-treasurer Scott Morrison said the sale would not raise as much money as hoped.
In its brief, ASIC said it welcomed government efforts to modernise registers across the federal public sector and supported the introduction of director identification numbers, which are designed to crack down on company phoenixing.
“A modernised business registry system will provide the backbone for transforming the way business interacts with government, making it simpler and faster to start and run a business,” it said.
Source: https://www.theaustralian.com.au/business/financial-services/asic-reveals-66-bank-inquiries-with-more-on-the-way/news-story/078c6639eccfa68a3df744f936f1e643
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