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Regulatory reform next on royal commission agenda

Regulatory reform next on royal commission agenda

Annie Kane
— 1 minute read

The upcoming round of public hearings for the financial services royal commission will focus on misconduct and conduct falling below community expectations as well as possible regulatory reform.

The seventh round of hearings for the final round of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (RC) will be held at the Lionel Bowen Building in Sydney from 19 to 23 November and at the Commonwealth Law Courts Building in Melbourne from 26 to 30 November.

Following on from the six previous rounds (which focused on consumer lending practices; financial advice; SME loans; issues affecting Australians who live in remote and regional communities; and insurance, respectively), it has now been revealed that the seventh round of hearings will focus on “causes of misconduct and conduct falling below community standards and expectations by financial services entities (including culture, governance, remuneration and risk management practices), and on possible responses, including regulatory reform”.

The royal commission had previously stated that the seventh round would focus on “policy questions arising from the first six rounds”.

In an update, the royal commission revealed that the purpose of round seven is “to provide the commissioner with an opportunity to explore with senior executives from certain financial services entities, and the regulators of those entities, some of the policy issues identified in the interim report, and following rounds five and six of the public hearings”.

The hearings will also consider the role of the Australian Securities and investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) in “supervising the actions of financial services entities, deterring misconduct by those entities, and taking action when misconduct may have occurred”.

According to an update from the RC, the hearings will include all four major banks (Australia and New Zealand Banking Group Limited, the Commonwealth Bank of Australia, National Australia Bank Limited and Westpac Banking Corporation) as well as AMP Ltd, Bendigo and Adelaide Bank Ltd, Macquarie Group Ltd, and ASIC and APRA.

However, the commission has said that further entities may be included before the hearings commence.

Due to the “different nature” of this next round of hearings, the royal commission has said that there will be no process for applications for leave to appear for this round of hearings.

Instead, a person who is summoned to give evidence before the commission may be represented by a legal representative at the hearing without the need for that representative to obtain separate authorisation, the commission revealed.

It is expected that the procedure for the next round of hearings will see the counsel assisting the commission lead and ask questions of all witnesses, after which the legal representative for the witness may ask questions of the witness (limited to matters arising out of the questions asked by counsel assisting, unless given leave to ask questions beyond those matters). The counsel assisting the commission may then re-examine the witness. Cross-examination of witnesses by other persons or entities will not be permitted.

The commission has further revealed that the commission is now “considering” the public submissions received relating to the interim report and rounds five and six, adding that “they will inform the matters that the commissioner seeks to explore during round seven”.

There will be no process for further submissions to be lodged following the conclusion of round seven.

It is expected that the seventh round will be the final round of the financial services royal commission, unless Commissioner Kenneth Hayne requests, and is granted, an extension.

Commissioner Hayne is expected to release his final report, which will include the topics of the fifth, sixth and seventh rounds of hearings (focusing on superannuation, insurance and “policy questions arising from the first six rounds”, respectively) by 1 February 2019.

 

Regulatory reform next on royal commission agenda
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