ASIC appeals CBA/Colonial conflicted remuneration ruling
The Australian Securities and Investments Commission (ASIC) has lodged an appeal against the Federal Court’s ruling in favour of Commonwealth Bank (CBA) and Colonial First State.
ASIC had previously alleged that Colonial and CBA breached conflicted remuneration laws regarding distribution of Essential Super through CBA’s branch and digital channels but the case was dismissed by the Federal Court on 29 September, 2022.
Justice Anderson found the payments made by Colonial to CBA did not constitute benefits within the definition of ‘conflicted remuneration’ and that the statutory context of the definition focused on situations such as where a financial adviser had a financial incentive.
Deputy chair, Sarah Court, said: “We have appealed this decision because we are concerned that it will limit the operation of conflicted remuneration laws introduced in 2012. Conflicted remuneration has the potential to cause significant consumer harm because it can prevent consumers from receiving appropriate advice and financial products free of influence.”
Conflicted remuneration was defined in the Corporations Act as any benefit, whether monetary or non-monetary, given to an Australian financial services licensee who provides financial product advice to persons as retail clients that, because of the nature of the benefit or the circumstances in which it is given could reasonably be expected to influence:
- The choice of financial product recommended by the licensee or representative to retail clients; or
- The financial product advice given to retail clients by the licensee or representative.
The appeal would be heard by the Full Federal Court on a date to be determined.
AUTHOR
Laura Dew
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