As part of its ongoing review into ASIC’s enforcement powers (previously discussed here and here), the Commonwealth Treasury has released a position and consultation paper on the possibility of expanding ASIC’s powers under the Corporations Act to allow the regulator to ban senior persons in the financial sector from performing their functions. It is proposed in the consultation paper, that ASIC have the power to ban a person from performing a specific function in a financial services business (including from being a senior manager or controller of a financial services business), as well as from performing any function within a financial services business.
The taskforce has proposed three main grounds upon which a person could be subject to a ban by ASIC including where:
(a) ASIC has reason to believe that the person is not a fit a proper person, is not adequately trained or competent to provide a financial service or financial services or to perform the role of officer or senior manager in a financial services business.
(b) A person has been an officer, partner or trustee of a financial services or credit licensee that has been either the subject of a report by the Australian Financial Complaints Authority (the stand-alone dispute resolution body replacing existing external dispute resolution regimes from 1 July 2018) regarding a failure to comply with a determination of that authority, or a corporation that was wound up and a liquidator lodged a report under about the corporation’s inability to pay debts.
(c) A person has breached their director’s duties under the Corporations Act.
Submissions on the consultation paper are invited by 4 October 2017.