7th Feb 2018, 10:41 AM – Senate Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2018 - in Committee - ADI pecuniary penalties

The majority voted against amendments introduced by Tasmanian Senator Peter Whish-Wilson, which means they failed.

What do these amendments do?

Senator Whish-Wilson explained that:

This amendment in a nutshell directly relates any penalties or punitive measures to accountable persons or executives to their size under this scheme. We believe that an ADI, an authorised deposit-taking institution, which is liable for pecuniary penalties, should receive a penalty in line with their company size or their value. So the bigger the bank the bigger the fine. It's pretty simple and it's outlined in the amendment. We believe that the maximum amount of pecuniary penalties is an amount at the rate 10 penalty units for every million dollars in assets for those ADIs that are captured by this legislation.

Amendment text

(1) Schedule 1, item 1, page 20 (lines 8 to 25), omit section 37G, substitute:

37G Pecuniary penalty for non-compliance with this Part.

(1) An ADI is liable to a pecuniary penalty if:

(a) an ADI contravenes its obligations under this Part (other than this Division); and

(b) the contravention relates to prudential matters.

(2) The maximum amount of pecuniary penalty is an amount at the rate of 10 penalty units for every $1,000,000 in assets, of the ADI within the control (however described) of the part of the ADI's banking business that is carried out in Australia.

(3) In determining the pecuniary penalty, the Federal Court of Australia must have regard to the impact that the penalty would have on the viability of the ADI.

(4) Subsection (3) does not limit subclause 1(3) of Schedule 2.

(5) This section is a civil penalty provision.