Australia’s CBA accepts fourth fine over pension ‘advice’
Commonwealth Bank of Australia (CBA) has announced its fourth Enforceable Undertaking (EU) with the Australian financial watchdog regarding concerns that a number of customers may potentially have received personal advice in the sale of the bank’s Essential Super product, within its branches.
The under-fire Australian financial giant also accepted a further EU from the Australian Securities and Investments Commission (ASIC) following their participation in the setting of the Bank Bill Swap Rate agreeing to pay A$20m worth of fines
The CBA has undertaken to pay A$15 million to the community, and A$5 million towards ASIC’s investigation and legal costs as part of the EU. It also agreed to make a further community benefit payment of A$1.25m as directed by ASIC , as part of the Essential Super product issue.
The CBA said in a statement that the pensions EU relates to circumstances where customers “may have opened an Essential Super account” immediately before, during, or immediately after a Financial Health Check, which it calls “a general discussion about customers’ banking arrangements”, accepting that there is “a possibility” that some customers may have received personal advice in this context.
CBA said that it acknowledges ASIC’s concerns that the process of branch sales of Essential Super may have involved personal advice being provided to some customers. In response, CBA said it has taken steps to remove any risk that the sale of Essential Super could be linked to personal advice.
To “address the risk” highlighted by the Australian regulator, CBA also said that it withdrew the sale of Essential Super from branches in October 2017 as it entered into the EU with ASIC – its fourth similar action this year.
Australia’s biggest bank, which handles assets worth A$976bn ($724bn), has been rocked by a series of financial scandals in recent months.
Last month the bank was hit with the biggest fine in Australian corporate history, agreeing to pay A$700m ($519.7m for failing to take adequate anti-money laundering and counter-terrorism measures.
Regarding the Bank Bill Swap Rate the bank added that it would also engage an independent expert to assess the changes they’ve made to their policies, procedures, systems, controls, training, guidance and framework for the monitoring and supervision of employees and trading in Prime Bank Bills.