Superannuation funds and other financial services organisations targeted by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry are being required to account for their actions over a full decade.
Money Management has viewed documentation pertaining to the Royal Commission’s examination of industry superannuation funds in which it has framed its questioning in terms of events “at any time since 1 January, 2008”.
This means that financial services organisations will need to dig deep into their records in circumstances where they cannot rely on the statute of limitations as it applies to the Corporations Act.
The 10-year period identified in the Royal Commission means that responses to the global financial crisis (GFC) will come into play and, regarding the advertising efforts of the industry funds, the gamut of expenditure which occurred with respect to the “compare the pair” television advertising campaign.
In the case of the banks, the 10-year time-scale means that the Royal Commission will also be able to traverse the major financial planning scandals and other areas of misconduct.
One of the questions being posed by the Royal Commission asks: “Has the entity identified any conduct, practice, behaviour or business activity it has engaged in (including by its directors, officers or employees, or by anyone otherwise acting on its behalf) since 1 January, 2008, which it considers has fallen below community standards and expectations? If so, what is the nature, extent and effect of that conduct, practice, behaviour or activity?”.
The documentation then asks whether the conduct or practice is attributable to some broader culture or governance practices in the industry or sector in which the entity operates.
Financial services executives have expressed surprise at how quickly the Royal Commission has moved in contacting organisations with Sir Peter Cosgrove, the Governor General having only signed the “Letters Patent” on 14 December, 2017 and with some superannuation funds having received correspondence as early as 22 December.
