The financial services royal commission’s fifth round of hearings is set to explore the extent to which registrable superannuation entities have fulfilled their obligation to members.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has announced that its fifth round of hearings will consider how registrable superannuation entities (RSE) licensees fulfil their duties to members of regulated superannuation funds and the extent to which structural or governance arrangements may affect the fulfilment of those duties.
The hearings, which will commence in Melbourne on Monday, 6 August, and will conclude on Friday, 27 August, will also consider related issues, including selling practices in relation to superannuation, the relationship between trustees and financial advisers, the current legal regime and the effectiveness of regulators.
The commission has noted that it intends to proceed by reference to the following categories of issues:
1. Duties of RSE Licensees (including structural and governance arrangements, the relationship between trustees and financial advisers and selling practices)
Case studies involving the following entities will be heard:
2. Superannuation funds and Aboriginal and Torres Strait Islander members. Case study to be heard:
3. Effectiveness of superannuation regulators. Regulators to appear:
The commission added that counsel assisting will also tender statements from RSE Licensees (further to the aforementioned entities) during the hearings and may add to the existing list of case studies to be heard.
The commission also stated that it is now accepting applications for leave to appear for the round. Applications close at 5pm on Friday, 27 July 2018.
Public can respond to interim RC report
The news comes after commissioner Kenneth Hayne revealed that he intends to submit his interim report, which will include his take on the first four rounds of hearings, to the Governor-General by 30 September and make the report open to the public for consultation.
The interim report is expected to identify a “number of policy-related issues” arising from the commission’s public hearings to date, which have covered consumer lending, financial advice, SME loans and the experiences of regional and remote communities with financial services entities.
The public will be invited to make submissions on policy issues raised in the interim report.
The due date for submissions in response to the interim report will be four weeks after the interim report is tabled in Parliament.
The commission will reportedly formally announce the due date for submissions once the interim report is tabled.
Royal commission recap
The first round of public hearings, held between 13 March and 23 March, considered issues concerning the treatment of consumers by banks and financial service providers in connection with credit products, which included residential mortgages, car finance and credit cards.
The initial round identified breaches of responsible lending obligations by Australia’s major banks and third-party intermediaries, with ANZ, the Commonwealth Bank and its third-party subsidiary Aussie Home Loans, NAB and Westpac all appearing before the commission.
The second round of public hearings, held between 16 April and 27 April, investigated the conduct of financial advisers, including the treatment of consumers, compliance with the law and community standards and expectations, and the sufficiency of the current legal and regulatory structure.
Among the revelations of misconduct identified by the commission were AMP’s concession that its financial planning division charged clients “fees for no service” as well as inappropriate advice issued by advisers that adversely affected the financial wellbeing of customers.
The third round of hearings, which commenced on 21 May and concluded on 1 June, considered the conduct of several of the leading banks in respect of their dealings with small and medium enterprises, in particular in providing credit to businesses.
The third round of hearings identified instances of wrongdoing and maladministration in the treatment of small business customers by lenders, with Westpac, the Commonwealth Bank, ANZ, NAB, Suncorp and Bank of Queensland all appearing before the commission.
The fourth round of hearings, which commenced on 25 June and concluded on 6 July, explored issues affecting Australians living in remote and regional communities, including farming finance, and Aboriginal and Torres Strait Islander Australians’ interactions with financial services entities.
The commission alleged that, based on the evidence it heard throughout the hearing, ANZ, NAB, CBA, Bendigo Bank and Bankwest engaged in wrongoing, with some alleged to have engaged in misconduct and conduct falling below community standards and expectations. However, many of the lenders have since denied the commission’s allegations.
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