“Broken” laws governing financial services set for overhaul

Complicated and “broken” laws governing financial services could be given an overhaul in an effort to simplify regulations for customers and businesses.

The Australian Law Reform Commission has handed down its final report on laws for corporations and financial services, making 58 recommendations to better improve the legislation.

The inquiry was set up in 2020 following the Royal Commission into the banking sector.

The commission called for offences and penalties under the laws less complex and consolidating them.

It also recommended introducing a single definition for what constitutes a financial service to make it easier to understand for consumers and corporations.

Commission president Mordy Bromberg said the recommendations had been a long time coming.

“Australia’s laws governing financial services are a confusing maze and need to be overhauled,” he said.

“The reforms outlined in this report will make these laws easier to understand and navigate, drive down the costs associated with complying with the law, and make it easier for consumers to  understand and enforce their rights.”

Attorney-General Mark Dreyfus said the federal government was carefully considering the report and its recommendations.

Of the 58 recommendations, 13 that were made during the three-year inquiry process have already been implemented.

The report says 1200 notional amendments in the legal framework have made financial service laws unnecessarily complicated, having an “incoherent legislative hierarchy”.

“After more than 20 years of development, the legislative framework for corporations and financial services regulation is no longer fit for purpose,” the report says.

“The tools used to build and maintain the legislative framework … often create more problems than they aim to solve.”

This article was first published by AAP.