BEN FORDHAM:
The Federal Government has announced that they're sending in corporate cops, to work inside the banks and also the AMP, to look out for misconduct. Kelly O'Dwyer is the Minister for Revenue and Financial Services – she joins us live on the line. Minister good afternoon.
KELLY O'DWYER:
Good afternoon Ben. Great to be with you and your listeners.
BEN FORDHAM:
Is this what it has come to – sending in the corporate cops so they can be embedded inside these organisations?
KELLY O'DWYER:
We've got a brand-new approach at ASIC because we have got a brand-new Chairman who has had a good look at the regulator and has seen that there are some improvements that can be made. We know this because we did a capability review of ASIC and he has come up with a plan which includes a new supervisory approach in respect to Australia's five largest financial institutions, so that means the big four banks plus AMP. And he looked at what has worked overseas, he has been a regulator overseas in Hong Kong, and he has taken that knowledge and said we need to embed some of our corporate cops in the big financial institutions to not only detect misconduct but also prevent harm occurring to consumers.
BEN FORDHAM:
Are they going to be undercover or are they going to be out and proud?
KELLY O'DWYER:
They are going to be out and proud.
BEN FORDHAM:
So everyone out in the office will know that this person is from the corporate regulator, they're here to spy on us to make sure we are doing the right thing?
KELLY O'DWYER:
Well I am not sure that 'spy' is the right word. I think it's going to be pretty clear what they are there to do and certainly that has been the approach in the UK, with the UK regulator, and in the US as well with the securities commission over there. And what does is it means that instead of the regulator simply being reactive, and there has been some criticism in the past that the regulator has been reactive and when it finally does react it has not always been in a very timely manner, this will allow them to be very proactive in ensuring that misconduct doesn't happen.
BEN FORDHAM:
Alright, some of the misconduct that has been reported so far involves the AMP and some other scandal plagued organisations that have admitted to charging customers fees for services which were never provided. Is that the kind of thing that is likely to be picked up on by someone who is inside these organisations having a bit of a look?
KELLY O'DWYER:
There can be no justification for charging customers for something that they don't receive and it's very clear that if these institutions have got good internal processes, and if they are doing the right thing by their customers, that this would in fact not happen. The regulator, as the conduct regulator, has an obligation to make sure that where misconduct occurs they throw the full weight of the law against those that are committing this wrongdoing and, in this case, with this new approach, be able to try and prevent such misconduct from occurring in the first place.
BEN FORDHAM:
Okay, just very briefly how soon are these people going to be showing up for duty, the corporate cops?
KELLY O'DWYER:
Well I was speaking to James Shipton only today and he tells me that we're talking a matter of weeks.
BEN FORDHAM:
Okay, good news Minister, thanks for your time.
KELLY O'DWYER:
Thanks very much.
BEN FORDHAM:
Kelly O'Dwyer the Minister for Revenue and Financial Services.