Bank manager authority “missing piece” in ASIC’s puzzle

The Australian Securities and Investments Commission (ASIC) wants the power to investigate bank managers if it suspects they are coercing planners into selling risky products, Fairfax Media reports.

The regulator will reportedly use its second-round submission Financial System Inquiry (FSI) to argue for the right to pursue managers, directors and executives in an effort to break down any culture of mis-selling within financial institutions.

ASIC deputy chairman, Peter Kell, called it the "missing piece" in the regulatory framework.

"What we need is the power to more directly take action and impose penalties on the people who are driving the business, who are designing the remuneration and the performance structures, who are deciding on how much training is undertaken, and who are ultimately responsible for compliance," Kell said.

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"If [ASIC] have the ability to ban or impose monetary penalties on those individuals if their firm has engaged in serious systemic misconduct, that will change the incentives around how they ensure those businesses comply with the law and meet consumer expectations.

"It's a key missing piece of the regulatory framework at present. Such a power might seem relatively simple, but we believe it would have a very important impact on the way the financial services industry operates and, in particular, the way financial services firms are managed."