ASIC staff to sit in big banks’ offices under major overhaul
THE big banks will be forced to allow corporate cops to sit in their offices to make sure they are not mistreating their customers as part of a major overhaul.
The Turnbull Government will hand the corporate watchdog an extra $70.1 million over the next two years and a range of new powers to crack down on dodgy behaviour in the corporate sector.
For the first time, staff from ASIC will be embedded inside the five biggest financial companies - the big four banks as well as embattled financial institution AMP - to ensure they are complying with the law.
The drastic move, which will cost $8 million, is aimed at ensuring ASIC can detect shoddy practices and prevent clients being mistreated in the wake of the banking and financial services royal commission.
It is expected ASIC will regularly rotate their staff through the five companies to avoid risks of "regulatory capture" of those embedded.
Financial Services Minister Kelly O'Dwyer will today unveil the suite of new measures, which she said would combat wrongdoing in the financial services industry "like never before".
"These new resources will ensure that ASIC is the tough cop on the beat - the tough cop that all Australians need, and expect, ASIC to be," Ms O'Dwyer said.
"It will ensure that ASIC is on the front foot when it comes to considering any deficiencies in the governance and compliance structures of these large financial institutions, so as to prevent harm to consumers before it occurs.
"Most importantly, this funding will allow ASIC's new chair, James Shipton, to take ASIC in a new strategic direction."
Other measures include $26.2 million to boost ASIC's activities to crack down on serious misconduct against well-funded litigants.
There will also be a new $6.8 million taskforce to undertake a comprehensive review into large companies listed on the Australian Securities Exchange (ASX) to identify and pursue failings.
Following the passing of new laws to protect whistleblowers calling out misconduct by their employers, $6.6 million will be given to ASIC to help it better receive and act on tipoffs.
The reforms come after questions have been raised about how the big banks and AMP wee allowed to get away with the misconduct and consumer abuse highlighted by the royal commission.