The corporate regulator has commenced proceedings against a major bank for breaching conflicted remuneration laws after more than $22 million was paid for the sale of a super product from its subsidiary through the bank’s retail branches.
In a statement, ASIC said its case against Commonwealth Bank and Colonial First State Investments limited (CFSIL) related to alleged conflicted remuneration paid between 2013 and 2019.
"ASIC alleges that more than $22 million in conflicted remuneration was paid by CFSIL to CBA for the distribution of Essential Super, a superannuation product issued by CFSIL," the regulator said.
"CBA distributed the Essential Super product using its branch and digital channels. Approximately 390,000 individuals became members of the Commonwealth Essential Super fund under the arrangements."
ASIC said it believed the arrangements between CBA and CFSIL breached the ban on conflicted remuneration under ss963E and 963K of the Corporations Act because the arrangements could reasonably be expected to influence the choice of financial product recommended by CBA to retail clients, and the financial advice given by CBA to retail clients.
"ASIC is seeking civil penalties against both CBA and CFSIL in relation to the alleged misconduct," the regulator said.
"Each contravention attracts a maximum civil penalty of up to $1 million for each of CBA and CFSIL."
The case relates to a referral made to the regulator as a result of the superannuation round of hearings in the financial services royal commission.
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