The Australian Securities and Investments Commission (ASIC) has been warned against allowing the new Australian Financial Complaints Authority (AFCA) to name individual employees of financial firms in relation to any serious contraventions.
The Association of Superannuation Funds of Australia (ASFA) has used a submission to ASIC regarding the regulator’s oversight of AFCA to question whether the new complaints-handling body should be able to name financial services employees who may have little power over outcomes.
“ASFA questions the appropriateness of AFCA naming, in a report to ASIC regarding a serious contravention, systemic issue etc, individual employees of the financial firm,” the submission said. “Any naming of employees should, in ASFA’s view, be limited to identifying key contact points within the financial firm and, potentially, senior staff with overall responsibility for the relevant operational area.”
The submission said that ASFA would consider it “inappropriate if any report by AFCA named an employee who operated ‘on the front line’ within a financial firm but had little control or decision-making responsibility over the conduct of the relevant operational area, or was only one of many employees whose actions might be relevant to the matter”.
“Should ASIC determine that AFCA’s report warrants further investigation, the degree of responsibility that should be attributed to individual employees is a matter that can be more appropriately assessed by ASIC as part of that process, along with its consideration of any sanctions that might be applicable,” the submission said.