ASIC has appealed the Federal Court’s decision to dismiss its civil action against Colonial First State Investments and Commonwealth Bank of Australia.
The corporate regulator had alleged that Colonial and CBA breached conflicted remuneration laws when they reached an agreement in which the bank took commission from its pension unit to distribute its Essential Super product.
This banned practice, called conflicted remuneration, is defined as any benefit given to an Australian financial services licensee who provides financial product advice tha could reasonably be expected to influence the financial product recommended or financial product advice given by the licensee to retail clients.
The ASIC proceedings were dismissed by the Federal Court on Sept. 29.
“We have appealed this decision because we are concerned that it will limit the operation of conflicted remuneration laws introduced in 2012,” ASIC Deputy Chair Sarah Court said. “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.”
The appeal will be heard by the Full Federal Court on a date to be determined.
