The corporate regulator has appealed the Federal Court’s decision to dismiss ASIC’s proceedings, alleging that Colonial First State and Commonwealth Bank (CBA) breached conflicted remuneration laws.
In a statement on Wednesday, ASIC said it’s taking the matter back to court.
ASIC previously alleged that Colonial and CBA breached conflicted remuneration laws when they reached an agreement in which Colonial paid CBA to distribute its Essential Super product through CBA’s branch and digital channels. Essential Super was distributed to over 390,000 individuals.
The Federal Court then dismissed ASIC’s proceedings on 29 September.
But according to ASIC deputy chair, the corporate regulator is now concerned that the court’s decision would limit the operation of conflicted remuneration laws introduced in 2012.
“Conflicted remuneration has the potential to cause significant consumer harm because it can prevent consumers from receiving appropriate advice and financial products free of influence,” Sarah Court said.
The conflicted and other banned remuneration provisions were introduced in June 2012 as part of the Future of Financial Advice reforms, representing the Australian government’s response to the 2009 inquiry into financial products and services in Australia by the Parliamentary Joint Committee on Corporations and Financial Services.
The appeal will be heard by the Full Federal Court on a date to be determined.
