Action against Colonial First State and Commonwealth Bank alleging breaches of conflicted remuneration laws have been dismissed by the Federal Court.
The Australian Securities and Investments Commission (ASIC) had alleged breaches of conflicted remuneration laws but the Federal Court found Colonial did not breach the law when it agreed to pay CBA to distribute Essential Super.
CBA staff signed up over 390,000 individuals to the Essential Super product between July 2013 and June 2019.
Justice Anderson found the payments made by Colonial to CBA did not constitute benefits within the definition of ‘conflicted remuneration’ and that the statutory context of the definition focused on situations such as where a financial adviser had a financial incentive.
The case had been used as a case study during the Hayne Royal Commission.
ASIC deputy chair, Sarah Court, said: “ASIC pursued this case because we were concerned that the arrangements between Colonial and CBA had the potential to influence the choice of financial product recommended to retail clients or the advice given to retail clients. ASIC will carefully consider the judgment.”
