1.3 Key questions

In its written submission in response to the Interim Report, Treasury identified the key questions emerging from the Interim Report as:[1]

  • To what extent can the law be simplified so that its intent is met, rather than merely its terms being complied with, and how can this be done?
  • Should the approach to addressing conflicts of interest change from managing conflicts to removing them, either by banning all or some forms of conflicted remuneration and sales or profitbased remuneration and/or changing industry structures?
  • What can be done to improve compliance with the law (and industry codes), and the effectiveness of the regulators, to deter misconduct and ensure that grave misconduct meets with proportionate consequences?

Treasury submitted that a fourth key question should be added:[2]

  • What more can be done to achieve effective leadership, good governance and appropriate culture within financial services firms so that firms ‘obey the law, do not mislead or deceive, are fair, provide fit for purpose service with care and skill, and act in the best interests of their clients’?

Treasury submitted that answers to these four questions ‘would form the pillars of any comprehensive policy response to what the Commission has publicly exposed’.[3]

I agree. These are the pillars of the policy responses to be made. And, as is explained in the body of the Report, some particular changes to the law are necessary to improve protections for consumers against misconduct, to provide adequate redress and to address asymmetries of power and information between entities and consumers.

[1] Treasury, Interim Report Submission, 1 [2].

[2] Treasury, Interim Report Submission, 1 [3]. See also, FSRC, Interim Report, vol 1, 290.

[3] Treasury, Interim Report Submission, 1 [4].