26 June 2014
© Commonwealth of Australia 2014 ISBN 978-1-76010-037-7
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Conduct of the inquiry Background to the inquiry Submissions Scope and structure of the report Acknowledgements
Relative size and growth of the financial services industry Expansion in retail investors Overall significance of Australia's capital markets Overall significance of large financial sector firms to the Australian economy Indications of where Australia's financial sector is headed
ASIC's statutory objectives and functions Powers available to ASIC Governance and organisational structure ASIC's resources
Fundamentals of regulation Responsive regulation Risk‑based regulation Formalising the role of non-state bodies: strategies of co‑regulation and enrolment Effectiveness of the regulatory regime and ASIC's regulatory approach
Early indications of irresponsible lending practices ASIC's response to lending practices ASIC's role and limitations Individual complaints and ASIC's responsibility Conclusion
Background Need for reform New credit laws Conclusion
Background Criticisms of FOS and COSL Accountability and performance Jurisdiction, compensation and limitations Financial Ombudsman Service—recommendations and determinations Conclusion
Chronological overview The misconduct of individual CFPL financial advisers CFPL's sales-based culture Allegations of forgery Don Nguyen's promotion and allegations of a management 'cover up' CBA's actions between Mr Nguyen's promotion and his forced resignation CBA's characterisation of misconduct at CFPL as 'inappropriate advice' Pain and suffering resulting from the CFPL case Committee view
The 2007–08 surveillance project The Continuous Improvement Compliance Program Failure of the CICP to prompt the necessary change at CFPL ASIC's handling of reports of misconduct at CFPL Committee view
Adequacy of ASIC's enforcement actions against individual advisers The enforceable undertaking and change at CFPL Committee view
Summary of the file reconstruction and compensation process Criticisms of the file reconstruction and compensation process CBA's response to criticism regarding file reconstruction and compensation ASIC's evidence on file reconstruction and compensation
Developments in May 2014 Committee view
Compliance ASIC's response ASX corporate governance principle 3
Why is whistleblowing important? Whistleblower protections in the Corporations Act ASIC's role in relation to whistleblowers The need for whistleblower reform Public Interest Disclosure Act 2013 ASIC's revised approach to handling whistleblower disclosures ASIC's recommended options for legislative and regulatory change Other potential areas for reform
Managing complaints and receiving reports of corporate wrongdoing Evidence before this committee Individual experiences Reports from industry professionals
Power to investigate ASIC's complaints management process ASIC's investigative capabilities Conclusion
ASIC's overall enforcement record Overview of ASIC's enforcement toolbox and criteria for taking action General observations about ASIC's approach to enforcement Does ASIC take on the 'big end of town'? Enforceable undertakings Factors that may discourage ASIC from taking court action Committee view
ASIC's use of publicity ASIC as a model litigant Use of expert witnesses Staffing and organisational structure issues
Overall views on working with ASIC Processes for consultation and engagement Collaboration and whether there should be greater co‑regulation Industry secondments Committee view
Expectation gap Licensed financial services providers, credit providers and registered companies Financial literacy Consumer Advisory Panel
Timeliness Clarity in response Tone of communication Other concerns Standards for handling misconduct reports and complaints Assessment of ASIC's processes Committee view
ASIC's registries and client services Access to information collected by ASIC ASIC's websites
Civil and criminal penalties Addressing overlaps in jurisdiction and improving the working relationship with other enforcement agencies Committee view
Proposal for a national financial adviser examination Reference checking and employee adviser register Recognition of financial advisers and planners ASIC's licensing tests Banning and disqualification Committee view
Is ASIC overburdened and underfunded? How do ASIC's responsibilities compare with foreign regulators? Should ASIC lose some of its functions? Proposal for a user-pays funding model Committee view
ASIC's lines of accountability Views on the current accountability framework ASIC's governance structure Conclusion and recommendation
Unsafe financial products Insolvency laws Boiler room scams
General recommendations surrounding the operation of ASIC Cost recovery charging by ASIC Whistleblower protections Further Inquiry, Judicial Inquiry or Royal Commission
For further information, contact: Committee Secretary Senate Economics References Committee PO Box 6100 Parliament House Canberra ACT 2600 Australia Phone: +61 2 6277 3540 Fax: +61 2 6277 5719 Email: economics.sen@aph.gov.au
Committee Secretary Senate Economics References Committee PO Box 6100 Parliament House Canberra ACT 2600 Australia
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