ASIC launches appeal against loss of CFS, CBA conflicted remuneration case

Mike Taylor

Managing Editor and Publisher

26 October 2022

The Australian Securities and Investments Commission (ASIC) has doubled down on its legal action against Colonial First State Investments and the Commonwealth Bank over conflicted remuneration by appealing a Federal Court decision.

ASIC has announced it is appealing the Federal Court’s decision to dismiss an ASIC alction alleging that CFS and the Commonwealth Bank breached conflicted remuneration laws.

It has justified the appeal by saying it is in defence of the operation of the conflicted remuneration laws.

ASIC had alleged that Colonial and CBA breached conflicted remuneration laws when they reached an agreement in which Colonial paid CBA to distribute its Essential Super product through CBA’s branch and digital channels. Essential Super was distributed to over 390,000 individuals.

The Federal Court dismissed ASIC’s proceedings on 29 September 2022 .

Explaining the appeal, ASIC deputy chair, Sarah Court said “We have appealed this decision because we are concerned that it will limit the operation of conflicted remuneration laws introduced in 2012. 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 conflicted and other banned remuneration provisions were introduced in June 2012 as part of the Future of Financial Advice reforms, representing the Australian Government’s response to the 2009 Inquiry into financial products and services in Australia by the Parliamentary Joint Committee on Corporations and Financial Services.

The appeal will be heard by the Full Federal Court on a date to be determined.