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Regulation

Stalled legislation should trump royal commission

The Financial Services Council (FSC) has called on the federal government to proceed with caution in implementing the recommendations of the banking royal commission, saying other proposed reforms had still to be to be passed by Parliament.

According to FSC chief executive Sally Loane, the council was broadly supportive of the recommendations and understood the appetite for rapid reform, but legislation to implement the recommendations should be treated the same way as any new bills to be introduced to Parliament.

“With the release of the final report, there is a real and justifiable desire to get on with the job of strengthening and improving our financial system,” Loane said.

“There are already several important superannuation reform bills languishing in Parliament that have not yet been passed into law. The FSC would like these passed without delay.”

She noted while there was a need to repair the damaged reputation of the financial services sector and rebuild consumer confidence, the recommendations of the royal commission were only released just over a week ago.

“The next tranche of financial system reform needs to be treated with the same rigour and scrutiny as any other legislation or regulation would receive,” she said.

“In some important areas of reform, further information has either been sought by Treasury or further analysis is required. We need comprehensive industry consultation to ensure that the unintended consequences of any technical changes are identified and dealt with.”

The government has already indicated it would adopt all 76 recommendations of the royal commission and to date has committed $30 million in compensation related to the unpaid determinations of the Financial Ombudsman Service and Credit and Investments Ombudsman.

Other actions include expanding the remit of the Australian Financial Complaints Authority for a period of 12 months to accept applications for disputes dating back to 1 January 2008 and providing a further $170 million of funding to the Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Commonwealth Director of Public Prosecutions and Federal Court for regulatory activities.

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