It is the responsibility, first and foremost, of entities, their boards and senior executives to comply with the law, meet community standards and expectations, and treat their customers fairly. Nevertheless the regulatory framework must make it clear that where entities and individuals within them fail to meet their obligations they will be held to account.
We have established the Banking Executive Accountability Regime (BEAR) which ensures banks and their executives are held accountable when they fail to comply with their obligations.
Legislation is before the Parliament to significantly increase penalties, both civil and criminal, so that they are an effective deterrent to, and remedy for, corporate and financial misconduct. We have also introduced legislation for a single whistleblower protection regime to cover the corporate, financial and credit sectors.
We will make entities and individuals more accountable, including by:
- extending the BEAR to all Australian Prudential Regulation Authority (APRA)‑regulated entities such as insurers and registrable superannuation entities;
- in addition to the Royal Commission’s recommendations, introducing a new conduct‑focused accountability regime, regulated by ASIC and extending its coverage to non‑prudentially regulated entities;
- increasing the requirements for entities to investigate the full extent of financial adviser or mortgage broker misconduct and inform and remediate customers that are affected; and
- establishing a new holistic approach for disciplining financial advisers for misconduct through a central body.
The Royal Commission has also made a number of recommendations to APRA to bolster its focus and supervision of culture and governance and the Government supports APRA acting on these recommendations.