The latest compliance issues in wealth management across Asia-Pacific.

FSA, Bank Of Thailand
The Financial Services Agency of Japan and the Bank of Thailand has signed an Exchange of Letters for cooperation on banking supervision.

The EOLs will be used as a platform for cooperation in the supervision of banking organisations operating in both countries in accordance with the principles set out in the Basel Core Principles for Effective Banking Supervision.

The two authorities will foster greater cooperation in the areas of information sharing, on-site visits, supervisory colleges, and crisis management.

ASIC
ASIC has commenced proceedings in the Federal Court of Australia against Westpac Banking Corporation in relation to alleged poor financial advice provided by one of its former financial planners, Sudhir Sinha.

ASIC alleges that, in four sample client files selected by ASIC,  Sinha breached the “best interests” duty under the Corporations Act, provided inappropriate financial advice, and failed to prioritise the interests of his clients.

Sinha provided financial advice in the Perth area as an employee of Westpac from 2001 to November 2014.  In June 2017, Sinha was banned by ASIC from providing financial services for a period of five years as a result of his failure to meet his ongoing advice service obligations.

ASIC said Westpac is liable for Sinha’s alleged breaches of the “best interest”' obligations under section 961K of the Act, as it was Sinha's responsible licensee during that period.  

The financial watchdog also alleges that Westpac contravened sections 912A(1)(a) and (c) of the Act, which requires Westpac to do all things necessary to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly, and to comply with financial services laws.

Section 961K of the Act is a civil penalty provision, and attracts a maximum penalty of AU$1 million ($750,000).

Separately, Westpac has launched a remediation programme in respect of Sinha’s conduct.  Westpac has reported to ASIC that, as at 14 June, it has paid approximately AU$12 million in compensation to clients impacted by Sinha's poor advice and ongoing advice service failures. 

The proceeding is listed for a directions hearing in Sydney on 19 July at 9:30am.