Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1149 48
given to retail clients by the licensee or representative.
252 The parties, in their written submissions, submitted that the definition of “conflicted
remuneration” had not yet had the benefit of being judicially considered; and that there has
been almost no judicial consideration of ss 963A, 963E, 963L and 963K in Australia. I wish
to note, briefly, that during the intervening period between the filing of opening written
submissions and the commencement of this trial, Beach J in Australian Securities and
Investments Commission v Westpac Banking Corporation [2022] FCA 515 (Westpac) observed
the following with respect to conflicted remuneration at [91] and [94]:
[91] The definition of “conflicted remuneration” has not yet been authoritatively
considered. The statutory language of s 963A(b) suggests that it is directed to the
capacity of a benefit to influence the content of financial product advice, and not
whether the benefit will influence a decision to give, or not to give, financial product
advice.
…
[94] Broadly speaking, the elements of a contravention of s 963K are, first, an issuer
or seller of a financial product gives a “benefit” to a financial services licensee or a
representative of a financial services licensee, second, the financial services licensee,
or representative, provides financial product advice to persons as retail clients and,
third, because of the nature of the benefit or the circumstances in which it was given,
the benefit could reasonably be expected to influence the choice of financial product
recommended by the licensee or representative to retail clients or to influence the
financial product advice given to retail clients by the licensee or representative.
253 Moreover, after this trial finished, Abraham J, in Australian Securities and Investments
Commission v Select AFSL Pty Ltd (No 2) [2022] FCA 786, considered the conflicted
remuneration provisions at [208]-[243]. Her Honour also noted at [213], that the key elements
to be established, consistent with the approach adopted by Beach J in Westpac at [94], are:
(1) a benefit, whether monetary or non-monetary;
(2) that is given to a licensee or a representative of a licensee;
(3) where the licensee or representative provides financial product advice;
(4) the advice is provided to persons as retail clients; and
(5) the benefit is a volume based benefit and the presumption in s 963L applies; or
(6) because of the nature of the benefit or the circumstances in which it is given, the benefit
meets the criteria in s 963A(a) or (b).