The Assistant Treasurer introduced the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 (Cth) (Bill) in September 2018. If passed by Parliament, the Bill will make significant changes to the way retail financial products are designed and distributed to improve consumer protection. It also enhances ASIC’s powers to intervene in situations where consumers are put at risk.
Generating financial value is the key for any successful business, but generating sustainable value is still largely aspirational despite global movements to include more than the balance sheet when valuing a business or investments.
Passing laws cannot instill good corporate culture and governance in an organisation, according to Commissioner Hayne. Culture and governance are “affected by rules, systems and practices, but in the end they depend upon people applying the right standards and doing their jobs properly.
The Interim Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) focused its first public round of hearings on consumer lending. The Royal Commission did this for two reasons. Firstly, because consumer lending affects both consumers and financial service entities equally and secondly, because the kinds of dealings which were being raised in connection with the public hearings all indicated conduct falling below community standards and expectations.
The Interim Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) has brought both condemnation of, and drawn public attention to, the conduct displayed by financial entities. The reason for this conduct seems to be the pursuit of short-term profit at the expense of basic standards of honesty. But, as we discuss below, conflicted remuneration is not a simple matter of greed. From the executive suite to the front line, staff were measured and rewarded by reference to profit and sales rather than the best interests of their clients.