IndexRole and expertise of Australian regulatorsRoyal Commission position and criticismsAMP conduct and director responsibilitiesKey legal issuesRelevance of the Royal Commission to corporate lawRegulators changing their approach to collar crime whitesConclusionThe Australian's article, "Banking Royal Commission: Kenneth Hayne unveils super hearings line-up" outlines numerous issues relating to the ongoing Banking Royal Commission regarding Australian regulators, the AMP and Australian company law . AMP Limited is a provider of life insurance, superannuation, pensions and other financial services in Australia and New Zealand and has experienced misconduct in relation to fees for failure to service customers. This raises questions about the role and competence of Australian regulators, the legal issues of AMP's conduct and the connection between company law and the Royal Commission, all of which will be discussed in depth in this essay. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayRole and expertise of Australian regulatorsThe Council of Financial Regulators (CFR) is made up of four coordinating bodies whose role promotes the stability of the Australian financial system and contributes to the country's financial regulation. Australian corporate entities such as AMP are strictly regulated and supervised by specific agencies such as the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC). ASICASIC is an independent Commonwealth government body that regulates companies, markets and financial services and consumer credit in Australia. By administering the Australian Securities and Investments Commission Act (ASIC Act) and working closely with the Corporations Act, the regulatory body has the vision to produce a fair, honest, competent and efficient financial structure for the nation. Due to the roles and laws administered by ASIC, ASIC has particular powers that it can exercise to carry out its duties, such as registering auditors and liquidators, investigating any suspected breaches of the law, taking of rules aimed at ensuring the integrity of financial markets and civil actions. sanctions by the courts.APRAAPRA is an independent statutory authority that protects the interests of depositors, policyholders and superannuation fund members by working closely with the Australian Treasury, the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC). APRA administers legislation which allows the body to supervise general insurers, life insurers, friendly societies, superannuation funds and authorized deposit-taking institutions. Royal Commission views and criticisms For Australia's financial system to remain stable, strong and reliable, regulators must use their skills, abilities and power correctly. However, especially weaknesses in ASIC's skills and processes have emerged through the media. There are concerns about ASIC's actions regarding sanctions in the legislation administered, as it is believed they may not be effective and may not effectively reflect community perceptions of the seriousness of white collar crime. There are inconsistencies in the sanctions framework for business offences, as some sanctions have been found not to have been reviewed and amended since 1993. Commonwealth offenses compared to State offenses demonstrate a lack of consistency, wherecrimes with the same impact and illegality are treated markedly differently; It was found that state crimes carry higher penalties in most cases. It is believed that it is not ASIC's funding that is lacking, but the culture, and many blame ASIC for the number of corporate misconduct that goes unresolved in Australia and for repeated failures to protect consumers' interests. For example, ASIC was aware that NRMA Insurance deliberately deceived its customers in 2006 and chose to refrain and take no action. Even after policyholders complained to the Financial Ombudsman (FOS) about the misconduct, who reported it to ASIC to address the matter, no real action was taken and no conclusions have yet been drawn. This is similar to numerous other current cases involving the misconduct of banks and insurance companies such as NAB, ANZ, Westpac and AMP, where their competence is being called into question. AMP Conduct and Director Responsibilities Who is AMP? AMP is a wealth management company offering solutions and services across numerous sectors such as financial advice, investment management, banking, superannuation, self-managed superannuation funds (SMSFs), life insurance, retirement income and investments. The corporate body was founded in 1849, having started out as the Australian Mutual Provident Society, which handled life insurance. In 1998, AMP demutualized and listed on the Australian Stock Exchange (ASX), where the company's intentions changed. Wealth creation by customers has shifted to the greed of directors, who are solely focused on creating money and increasing shareholder wealth. This greed has taken over AMP in recent years, resulting in illegal misconduct against customers that can be seen in the media in recent years. In The Australian's article, "Banking Royal Commission: Kenneth Hayne reveals training of super auditors", we read, we can see that the AMP culture has changed compared to previous years. In recent years, AMP was found to be charging customers for financial advice they did not receive; this misconduct is known as fee for no service. This conduct was found to have occurred from 1 July 2008 to 30 June 2015 and during this period AMP deceived and made false statements to ASIC in this regard, suggesting that this was not a deliberate action, although later it turned out that the intention was THERE. These actions fall short of community standards and expectations for the conduct of financial advice in these industries, and several laws have been violated. Key Legal Issues The misconduct engaged in by AMP creates legal issues, due to numerous violations occurring over several years. Financial services licensees such as AMP must take reasonable steps to ensure compliance with particular sections of the Corporations Act and the ASIC Act, however AMP may breach these. There are general obligations that financial services licensees must comply with and AMP is in breach of section 912A(1)(a), (c), (ca) and 912D(1)(b) of the Corporations Act. Financial services have not been delivered efficiently, honestly and fairly; the representatives did not comply with the Financial Services Act; furthermore, the breaches were classified as significant and ASIC was not always informed of them. AMP admitted that ASIC was deceived seven times through false and misleading representations regarding the fees charged without service, which is a clear breach of section 1308(2) and section 1308(3) of the Corporations Act and section 64 of the 'ASIC Act, due to dishonest informationprovided. A provider such as AMP must also act in the client's best interests with regards to advice, however this is not done as services have not been provided or clients have been offered inferior financial products. The ASIC Act addresses accepting payments without the intention or ability to deliver as ordered, which is what AMP was dishonestly doing. This is in breach of section 12DI(b) of the ASIC Act, as AMP had no intention of providing the financial services charged for, yet the money was still received and retained. All of these violations can lead to criminal penalties, civil penalties, disqualifications or business consequences, with potential liability present. The Companies Act specifies four main duties for directors of a company; act with due care and diligence, act in good faith, do not misuse the position and do not misuse the information. It is clear that the directors have taken advantage of customers and their positions and have not acted in good faith, as they have been willfully dishonest and are not acting in the best interests of AMP. This is a violation of their administrator duties and consequences will be implemented. Relevance of the Royal Commission to Company Law Royal Commission and Potential Recommendations While no conclusions have been drawn regarding the consequences of these actions, there are potential suggestions that have emerged through the Royal Commission Statements, Counsel Assisting Comments and similar cases past. Counsel representing Rowena Orr said Commissioner Kenneth Hayne has the potential to find that AMP's conduct may have contravened certain criminal provisions of the Corporations Act. The provisions of sections 184 and 1308(2), for example, provide for sanctions equal to 200 penalty units or imprisonment for 5 years and 100 penalty units or imprisonment for 2 years, respectively. If the Commissioner adopts the legal advisor's suggestions, the AMP may risk being criminally prosecuted due to the deceptive theft they have committed. It is highly likely that civil proceedings will be incurred due to breaches of the civil provisions, as well as further potential disqualification orders against directors due to breaches. Already several directors have resigned and an AMP financial advisor has been banned for five years, showing that ASIC is taking consequential action. Regulators are changing their approach to white collar crime ASIC and APRA are changing and undergoing reform to be more successful in catching these types of misconduct by large corporate bodies, as it is clearly a growing problem in the financial sector. Especially in the past, the ASIC culture has been considered weak and inconsistent, so strengthening this regulatory body is vital. ASIC has conducted numerous surveillance programs which have led to several public reports, such as ASIC Report 499 which focuses on no-service charges in relation to large institutions such as AMP, ANZ and NAB, which in turn has led to reviews and legislative reforms. ASIC has been limited in their power for several years, but recent government reforms will significantly expand the scope of ASIC's enforcement capabilities. ASIC believes that bans are an effective regulatory tool to implement against the financial advice industry, as in the past civil penalties alone have not generally been strong enough to crack down on this behaviour. By strengthening ASIC's power to ban management and directors of financial services businesses, there will be enforcement action by.