The Banking Code Compliance Committee should start naming banks in its reports on compliance with Banking Code of Practice obligations.

This is one of 19 recommendations in a review of the BCCC by consultant Cameron Ralph Khoury. Other recommendations include calls for the BCCC to revitalise its small business and agribusiness advisory panel, speed up reporting times and establish closer working relations with AFCA (including an information exchange).

Overall, the review found that the BCCC’s work “provides the Australian community with valuable assurance of the level of compliance”. It also said the committee has an important role in promoting higher practice standards in the industry.

However, it said that with so much recent change in finance industry regulation and supervision, including ASIC’s power in relation to approved industry codes, banks are required to report much more information about complaints and breaches to ASIC, leading to overlap with their reporting to the BCCC.

“The changes have caused the role and purpose of the BCCC again to be questioned. Because of this, we think more needs to be done to clarify and build shared understanding of the BCCC’s role as both monitoring banks’ compliance with the code and promoting best practice by banks in code implementation.

“A particular issue for the BCCC will be to revisit the data and other information that banks must report to the BCCC twice yearly. While this work must aim for efficiency for banks and the BCCC, it must also meet the needs of other stakeholders and the primary importance of the data collection enabling the BCCC to provide credible assurance to the community as to banks’ compliance with the code.”

The changes in ASIC’s powers include an amendment to the Corporations Act in 2019 making financial services licensee general obligations civil penalty provisions, including the obligation to act efficiently, honestly and fairly. This has opened the way for ASIC to take enforcement proceedings seeking a civil penalty for a breach of the code, on the basis that the breach amounts to a failure to act efficiently, honestly and fairly.

In 2020, ASIC was given power to specify provisions of approved codes as enforceable code provisions, liable to a civil penalty for a breach. ASIC is looking at which provisions will be enforceable.

Since October this year, banks have been subject to more rigorous breach reporting rules, including an obligation to report a breach of a “core obligation”.

Also in October, new internal dispute resolution requirements took effect. Financial firms are required to report on complaints in their annual reports and to ASIC.

Cameron Ralph Khoury said: “These developments re-open the issue of how the BCCC best fits into the regulatory and quasi-regulatory landscapes and what role it can best play.

“To our thinking, despite the changes that impose on its framing and operation, the code remains at its core a self-regulatory promise to the community. Banks are accountable for complying with its provisions and the BCCC is responsible for providing the community with independent assurance that the code is working.”

On the issue of “naming and shaming”, the