The Morrison government has begun the process of legislating several further recommendations made by the royal commission into the banking, superannuation and financial services sector.

Newly unveiled draft legislation will see the establishment of a compensation scheme of last resort and the implementation of a broader financial accountability regime for APRA-regulated entities.

All up, this legislation will encompass a total of seven recommendations made by the royal commission into the banking, superannuation and financial services sector.

The former measure will facilitate compensation for eligible customers who have been left unpaid even after receiving a determination from the Australian Financial Complaints Authority.

In a statement, the government claimed that the measure will “support ongoing confidence in the financial system’s dispute resolution framework”.

Meanwhile, the new financial accountability regime will extend the requirements and protections of the existing banking executive accountability regime to cover all APRA-regulated entities.

The new regime will be jointly administered by APRA and ASIC.

The federal government said that the new regime will impose “a strengthened responsibility and accountability framework within financial institutions” and recognises that the decisions taken by directors and the senior executives in financial institutions are “significant for millions of Australians and the Australian economy”.

The federal government has also said that it will be publicly releasing a formal report by ASIC into the ongoing transition away from grandfathered conflict remuneration in the financial services industry, following the passing of legislation requiring them to do so earlier this year.

As per the report, ASIC found that, as of 31 December 2020, financial product issuers had terminated 96 per cent of grandfathered conflict remuneration arrangements.

The regulator noted that approximately $266.7 million in rebates had been paid out to customers over the 18 months prior to the end of last year.

In addition, ASIC expects that another $24.4 million in rebates will find its way into the hands of consumers over the course of 2021.

“Overall, the findings of our investigation were very pleasing. Nearly all product issuers ended GCR arrangements before 1 January 2021,” the regulator said in the report.

The federal government said it remains committed to implementing the recommendations made by the financial services royal commission, “and in doing so ensuring Australians continue to have trust and confidence in a strong and effective financial system”.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times. 

more on this topic

Economy

Financial pressures and the 'she'll be right' attitude delay Australian divorces

In a revealing study, the Real Cost of Separation Report 2026 by Real Insurance has uncovered a trend of 'quiet uncoupling' among Australians, with financial pressures and concerns for children ...Read more

Economy

Labour market resilience provides RBA room for manoeuvre, says State Street economist

In the wake of the latest Labour Force data release, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and administration and US$5.5 ...Read more

Economy

Geopolitical tensions shape investor strategies in private markets

In the face of mounting geopolitical tensions, investors are honing their strategies in private markets, as revealed by the 44th edition of the Coller Capital Global Private Capital BarometerRead more

Economy

Ellerston sees investment shift as Middle East tensions ease and inflation persists

Amid signs of easing tensions in the Middle East with US-Iran peace negotiations progressing, albeit at a slower pace than desired by markets, investors are being advised to reevaluate their ...Read more

Economy

Global markets face stagflationary pressures amid rising inflation and diverging growth

In a recent macroeconomic report, the Franklin Templeton Fixed Income team has highlighted that global markets are increasingly encountering a stagflationary environment, characterised by intensifying ...Read more

Economy

Corporate capex provides solid footing for US equities, says ClearBridge

In a promising development for the US economy, corporate capital expenditures (capex) are playing a crucial role in supporting economic growth, according to Jeff Schulze, head of economic and market ...Read more

Economy

Brands turn to household care and laundry strategies to weather cost-of-living crisis

As the UK braces for a 13% hike in its energy price cap by July 2026 and US gas prices soar to a four-year high due to geopolitical tensions, the global spotlight is once again on the cost-of-living ...Read more

Economy

GDP data prompts State Street expert analysis on cash rate and trade surprises

In light of the latest GDP figures, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and/or administration and US$5.5 trillion in assets ...Read more