ASIC begins consultation process for new banking code

Businesses and members of the public have until January 15 to provide ASIC with input into the banking industry’s new code of conduct.

Federal Treasurer Jim Chalmers with Australian Banking Association chief Anna Bligh.

The corporate regulator has begun the consultation process for a proposed update to the Banking Code of Practice, after the industry recommended a number of updates.

The Australian Securities and Investments Commission has started seeking submissions after the peak body for Australia’s banks in September proposed the code updates.

The code sets minimum standards for helping customers who are experiencing financial difficulty and would add a definition of “vulnerable customers” that recognises anyone can experience serious financial difficulties “at any time in their life” due to the loss of a family member, job, or due to sickness, the banking group said.

The code updates would set minimum standards for helping customers in financial difficulty and would add a definition of “vulnerable customers”.

The consultation window marks the first time the Australian Banking Association has seen its proposed code of conduct put out to public scrutiny and ASIC noted that it hoped to ensure it delivered “real benefits to consumers, small businesses, and subscribing banks” before approving the update.

ASIC said the consultation would help inform the regulator, whose role is to oversee corporate Australia and the financial services sector.

In particular ASIC is examining whether the code “imposes obligations on subscribers that are beyond those required by the law and, in doing so, addresses key potential consumer harms”.

ASIC said it wanted to determine if the code would create “effective administrative systems for monitoring compliance and whether the obligations are capable of being enforced”.

The regulator said it would look at whether any of the updates the ABA did not support should be included in the code update.

ASIC said it wanted to ensure the banking code update “strikes an appropriate balance between simplifying the code and minimising regulatory duplication”.

An ABA spokeswoman welcomed ASIC’s move to commence consultations.

“The banking code is a set of enforceable rights and entitlements for bank customers that are over and above the law,” she said.

“It is the only code in the financial services sector that has ASIC approval.”

The consultation window is open until January 15, and ASIC says it planned to make a decision in the first half of 2024.

The consultation about the code updates comes after veteran public servant and economist Mike Callaghan reviewed the banking code in 2021.

His report contained 116 recommendations.

Originally published as ASIC begins consultation process for new banking code