The amount of money that a judge could spend on a case involving an Australian bank is far greater than what would be possible in a similar action involving a UK company, according to the Australian Securities and Investments Commission (ASIC).
The ASIC is expected to announce the result of its recent inquiry into forex lawsuits in Australia next week.
The inquiry was launched after the ASIC found that banks could face significant fines and up to $100,000 in legal fees if they lost their ability to operate in the country, due to the legal uncertainty caused by Brexit.
“We are concerned that in a country where the uncertainty about our relationship with the EU has caused some uncertainty, that a large number of companies are seeking to challenge the law in the courts,” ASIC director general Stephen White said.
The regulator has been reviewing the regulatory framework in the UK for a number of years.
In 2015, the UK government moved to require banks to be registered in the same way as companies in the EU.
Banks in the rest of the UK are exempt from the requirement, but the move prompted a wave of cases challenging the law.
ASIC is now looking at the legal implications of Brexit in Australia, which could result in significant changes to the way the regulator deals with the issue.
In addition to ASIC, the Australian Federal Police and the Australian Competition and Consumer Commission have also been examining the impact of Brexit on financial services.
The ASIC has also been reviewing whether the financial sector should be required to disclose information about the extent to which it is in a position to comply with a consumer protection order (CPO).
The regulator’s report has not yet been made public.
The Government’s legal team is expected next week to make a submission to the inquiry, but no decision has yet been taken.
“While the Government has a long way to go in implementing its plans to make Australia a more attractive place to do business, the Commission’s findings will give us a clearer picture of what the potential consequences of Brexit are for Australian companies,” ASIC chair, David Cundall, said.
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