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ASIC’s power to ban senior officials in the financial sector

Key documents

ASIC has the power to ban individuals from providing financial services in certain circumstances, for example, where the individual has breached a financial services law, has been convicted of fraud, is not of ‘good fame or character’, or is not adequately trained or competent to provide financial services.

The Taskforce positions on reform seek to enhance ASIC’s banning power by ensuring that it may take appropriate action to ban senior managers from managing financial services businesses. The need to enhance ASIC’s banning power in the financial services and credit sectors was flagged in the final report of the Financial System Inquiry (FSI). The FSI considered that enhanced banning powers would improve accountability of managers and corporate culture.

The Taskforce’s positions are below:

Position 1: Once the administrative banning power is enlivened ASIC should be able to ban a person from:

  • performing a specific function in a financial services business, including being a senior manager or controller of a financial services business; and/or
  • performing any function in a financial services business.

Position 2: The grounds for ASIC’s power to ban under section 920A of the Corporations Act should include circumstances:

  1. Where ASIC has reason to believe that the person is not:
    • a fit and proper person to provide a financial service or financial services, or to perform the role of officer or senior manager in a financial services business; and/or
    • adequately trained, or is not competent, to provide a financial service or financial services, or to perform the role of officer or senior manager in a financial services business.
  2. Where a person has been an officer, partner or trustee of a financial services or credit licensee that has been:
    • the subject of a report by the Australian Financial Complaints Authority regarding a failure to comply with a determination of that authority; or
    • a corporation that was wound up and a liquidator lodged a report under subsection 533(1) of the Corporations Act about the corporation’s inability to pay its debts.
  3. Where a person has breached their duty under sections 180, 181, 182 or 183 of the Corporations Act.

The taskforce invites all interested parties to make a submission on the positions outlined in this paper by 4 October 2017.

Responding

You can submit responses to this consultation up until 4 October 2017.

Interested parties are invited to comment on this consultation.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

How to respond

Post

Address written submissions to:

ASIC Enforcement Review
Financial System Division
The Treasury
Langton Crescent
PARKES ACT 2600