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Treasurer puts industry ‘on notice’ as reforms roll out

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Insurance is squarely in the Federal Government’s sights, with Treasurer Josh Frydenberg setting out a schedule to rapidly introduce Hayne royal commission reforms.

“The scale of these reforms, detailed in the Government’s implementation plan, represents the biggest shake-up of the financial sector in three decades and the speed with which they will be implemented is unprecedented,” Mr Frydenberg says in an opinion piece in The Australian today.

The Government will follow up the reforms by establishing an independent review in three years’ time to assess the extent to which changes in industry practices have led to improved consumer outcomes and the need for further action.

“Industry is on notice,” he says. “The public’s tolerance has been exhausted as they now expect, and we will ensure, that the reforms are delivered and the behaviour of those in the sector better reflects community expectations.”

By the end of this year more than 20 royal commission commitments, about a third of the total, will have been implemented or will be included in legislation before the parliament, according to the schedule.

That will rise to more than 50 commitments, or almost 90% by the middle of next year, with legislation covering the remainder to be introduced by the end of next year.

Mr Frydenberg says the implementation plan will make up 75% of Treasury’s legislative agenda over the next year.

The Opposition will be fully briefed by Treasury on the implementation plan and pieces of legislation required and it is critical Parliament deals with the reforms constructively and with a sense of urgency, he says.

The Australian Securities and Investments Commission (ASIC) is also stepping up its activity in response to the royal commission, with $404 million of additional funding provided over four years.

The regulator’s new Office of Enforcement is working on 13 matters referred from the inquiry, while also investigating and assessing 30 of the case studies that came to light during the hearings, ASIC Deputy Chairman Daniel Crennan says in an update provided with a half-yearly report.

“While we do not comment on actual or potential investigations, we are prioritising our work on these matters and a significant number of other investigations in Australia’s major financial services institutions,” Mr Crennan says.

ASIC will be recruiting more enforcement officers, including analysts, investigators and lawyers, and step up use of external resources, including seeking advice from members of the bar, he says.

The six-month update shows the regulator opened 77 investigations and completed 48 investigations during the period, 70 criminal charges were laid, and six people imprisoned.

Penalties of $370,800 were paid while $19.2 million was provided in compensation and remediation for consumers and investors.

A total of 103 individuals were removed or restricted from providing financial services or credit and 29 people were disqualified or removed from directing companies.