The corporate regulator will have more powers to hold financial services industries to account for misconduct under a new government proposal. The consultation is in response to Recommendation 1.15 of the Hayne commission’s final report to enhance the current approved codes framework in the Corporations Act 2001, Treasurer Josh Frydenberg said in a statement. The report noted that “there must be adequate means to identify, correct and prevent systemic failures in applying the code”, and that “in order to do that, some provisions of the codes should be picked up and applied as law”.
The government also said it would amend the law to allow:
- ASIC to approve codes for a wider range of entities than currently possible;
- ASIC-approved codes to include ‘enforceable code provisions’, contravention of which constitutes a breach of the law and with remedies modelled on those in the Competition and Consumer Act 2010; and
- ASIC to take into account whether particular provisions of an industry code have been designated as enforceable code provisions in determining whether to approve a code.
Mr Frydenberg said that through these changes, it will also be made clear that certain promises made in codes are enforceable against financial services firms by consumers.
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