Australia unveils banking overhaul as it puts financial services sector on notice

Pedro Gonçalves
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Australia unveils banking overhaul as it puts financial services sector on notice

The Australian authorities have revealed an "implementation road map" around the 54 recommendations from the financial services royal commission that called for government action.

Treasurer Josh Frydenberg said  one of the priorities will be focusing on ensuring regulators perform better and hold those who breach the law to account. 

The reforms involve changes to corporations law, superannuation, insurance and financial services.

There is no understating the importance of the royal commission and its findings to the critical task of restoring trust in Australia's financial institutions"

"Commissioner Hayne had said most of the offences in the misconduct that he identified was in breach of existing laws," Frydenberg said.

Frydenberg will spend A$10m ramming through 40 pieces of banking royal commission legislation in the next year, as the industry prepares for its most significant overhaul in three decades.

Frydenberg said the "unprecedented" timetable will take up "75% of Treasury's legislative agenda over the next year" as he makes the government's response to the banking royal commission its top priority and pledges to have all legislation introduced by the end of 2020.

In commissioner Hayne's final report there were 76 reforms, of which 54 were directed to the government and 40 of which require legislation.

Shortly after the release of the recommendations, the government announced a further 18 commitments to address issues that had been raised in the report.

Since then, eight of the 54 recommendations have been implemented as well as seven of the additional 18.

Some of the recommendations already completed include the undertaking of the APRA capability review, the requirement for financial firms to co-operate with AFCA and the undertaking of a review of universal terms for MySuper products.

In progress are recommendations like the removal of claims handling exemptions and legislation to end grandfathered commissions for financial advisers.

"The need for change is undeniable, and the community expects that the government's response to the royal commission will be implemented swiftly," said Frydenberg.

The Treasurer said the scale of the reforms detailed in the Government's implementation plan represented the biggest shake-up of the financial sector in three decades.

"There is no understating the importance of the royal commission and its findings to the critical task of restoring trust in Australia's financial institutions," Frydenberg said.

 

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