Some issues referred by RC carried no pecuniary or criminal penalty

The Australian Securities and Investments Commission (ASIC) has admitted that many of the referrals made to it by the Royal Commission relate to conduct which, at the time, would have not attracted a pecuniary or criminal penalty.

The revelation has been made by ASIC commissioner, John Price who told a forum of health practitioner regulators that the regulator was being asked to meet new expectations and was receiving further powers to impose penalties.

“It will be important for ASIC to meet new expectations – investigating new laws promptly, with rigour and taking a tougher stance,” he said. “On this point, while ASIC is receiving further powers to impose penalties, many of the referrals from the Royal Commission relate to provisions that, at the time the conduct occurred, had no pecuniary or criminal penalty attached.”

Elsewhere in his address, Price said that what the Royal Commission had revealed about the financial sector was “a predominantly sales-driven sector with many intermediaries, trustees and advisers still prioritising their own self-interest”.

“It would seem that some have lost sight of the ultimate purpose of financial service delivery, which is about managing other people’s money (as opposed to maximising their own earnings). An undeniable example of this fact has been the unacceptable, and widespread practice of charging fees where no advice was provided,” he said.

“The management of conflicts of interest was also systematically poor with compliance often being seen as unnecessary and a cost of doing business – as opposed to a foundation that informs and underpins how a business must be conducted.”