What directors need to know about the banking Royal Commission.

    The public hearings phase of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has kept broadcast and social media busy and the live broadcasts have exposed some damaging practices by a range of financial institutions.

    The first round of public hearings, held in March, had a focus on consumer lending practices relating to home loans, car finance and credit cards, including add-on insurance products, credit offers and account administration. The second round of public hearings in April had a focus on the financial planning and wealth management industry.

    Who’s who? Former High Court Justice Kenneth Hayne AC QC heads the inquiry. He is being assisted by Rowena Orr QC and Michael Hodge QC and junior barristers Albert Dinelli, Eloise Dias and Mark Costello.

    How long will it run? An interim report is due no later than 30 September 2018. The final report is due by 1 February 2019 which is to contain its findings and any recommendations. Royal commissions are public inquiries governed by the Royal Commissions Act 1902 (Cth). Once a Royal Commission has started the government cannot end it. The terms of reference may be amended and the time for an inquiry may be extended, at the government’s discretion. It has the power to summon witnesses and take evidence and can authorise police to apply for search warrants.

    How much will it cost? The government estimates the cost to taxpayers at $75m. Banking analysts have estimated the big four banks will spend at least $100m each to make their cases.

    What won’t cover? It can’t change cases that have been heard before courts. The commission “is not required to inquire into and may not make recommendations in relation to macroprudential policy, regulation or oversight”.

    Submissions received: 3254 (as of 6 April).

    Top three by industry: banking 69 per cent; superannuation nine per cent; general insurance/intermediaries/financial advice seven per cent.

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