If you have been following the news in recent months you will have heard about the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry or as it is commonly known the banking royal commission, which was established on 14 December 2017. You may be wondering what it’s all about, so we’ve put together a brief overview for you.
Royal commissions are public inquiries that can be called in Australia by the Commonwealth, State or Territory Government. Each jurisdiction has its own legislation governing royal commissions, for the Commonwealth this is the Royal Commissions Act 1902 (the Act). Section 1A of the Act says that the Crown may call an inquiry, by issuing ‘letters patent’, into any matter ‘which relates to or is connected with the peace, order, and good government of the Commonwealth, or any public purpose or any power of the Commonwealth.’ One of the important characteristics of a royal commission is that it has coercive powers. For example, the commission may summon a person to appear to give evidence or to produce a document and if they fail to attend they may be guilty of an offence carrying a penalty of 2 years’ imprisonment (sections 2 and 3). So, once called, a royal commission has the powers to conduct a very thorough inquiry.
According to the terms of reference in the letters patent for the banking royal commission the Commissioner, the Honourable Kenneth Hayne AC QC, is required and authorised to inquire into a range of matters relating to banking, superannuation and other financial service providers including:
The objects of the inquiry, financial service entities, are defined in the letters patent and include authorised deposit-taking institutions (ADIs) or banks, insurers, licensed financial advisers and their licensees and superannuation entities. The definition does not however, include Commonwealth corporations or entities within the meaning of the Public Governance, Performance and Accountability Act 2013 (PGPA).
The banking royal commission website has comprehensive factual information about the royal commission. It gives you access to the terms of reference for the commission, media releases, background publications, information about public hearings and how to make public submissions. We are sure you will also be seeing plenty of reporting in the media between now and 1 February 2019, when the Commissioner is due to publish his final report.
ADF Financial Services Consumer Centre