Government introduces new conduct regime for financial institutions
Published: 26 September 2019
The Government has announced a new regulatory regime to govern the conduct of banks, insurers and non-bank deposit takers such as credit unions.
The regime will be included in legislation that is expected to be introduced to Parliament by the end of 2019. It will require banks, insurers and non-bank deposit takers to put systems in place to make sure they consider the needs of their customers and treat them fairly.
The measures the Government is introducing include:
- a new conduct licensing system for banks, insurers and non-bank deposit takers such as credit unions
- the new regime requiring these entities to meet high standards of customer treatment
- obligations for these entities relating to how they design their remuneration and any other sales incentives, and how they manage the risks those incentives create
- a ban on sales incentives that are based on volume or value targets (such as bonuses for selling a certain number of products, and soft commissions such as overseas trips).
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