The latest round of financial sector reforms following the Royal Banking Commission has been presented to the federal parliament.
On Thursday, four bills were introduced in parliament, which would see six recommendations of the Hayne Royal Commission implemented.
Among these was the extension of the financial liability regime to all financial bodies regulated by the Australian Prudential Regulation Authority.
These measures would see all directors and senior executives of banks, insurance companies and pension companies held accountable for their actions.
The regime will be applied to the banking sector by July 1 of next year at the latest, while it will be applied to super companies and insurance companies by July 1, 2023.
The new legislation will also establish a last resort compensation scheme.
Under this program, up to $ 150,000 in compensation may be provided to clients who have been informed that they are eligible for compensation by the Australian Financial Complaints Authority due to misconduct, but not have not yet received the amount.
Treasurer Josh Frydenberg said the federal government would fund the establishment of the program and help with the costs of its first year of operation.
Compensation could be paid from July 1 of next year.
Then, the scheme will be financed by levies imposed on financial institutions.
“The bill underscores the government’s commitment to take action in response to the royal commission, which uncovered too many cases of misconduct,” Cabinet Minister Alan Tudge told Parliament.
“The regime will ensure that in the event of misconduct, appropriate consequences will follow.”
Mr Frydenberg said the government was continuing consultations on the new legislation as it was passed by parliament.
“The government has now fulfilled the legislative commitments it outlined in its roadmap for the implementation of the Hayne Royal Commission,” he said in a statement.
“The remaining recommendations, which include conducting multiple reviews in 2022, will be implemented in accordance with our previous commitments.”