Treasurer Scott Morrison says he confident ASIC will "deal with" the problems at AMP. Credit:Eddie Jim Although the hearings are likely to raise questions over ASIC's strength as a regulator, Mr Morrison on Wednesday said he was confident ASIC would "deal with" the matter. "I mean, what has occurred here and what has been admitted to in the royal commission by AMP is deeply disturbing. They have said that they basically charged people for services they didn't provide and they have admitted to statements that were misleading - to ASIC and to their own customers, and this is deeply distressing," Mr Morrison said at a press conference in Sydney. "This type of behaviour can attract penalties which include jail time. That's how serious these things are." Loading

ASIC said in a statement that it had so far received thousands of documents in its investigation into AMP, and examined 18 staff from the wealth manager. It also sent the wider financial sector a reminder that "making false or misleading statements to ASIC can result in civil and criminal sanctions." It can be a criminal offence for a financial services company to deliberately give ASIC false or misleading evidence, or to knowingly fail to comply with a written order from the regulator. Individual executives can also be subject to criminal penalties for knowingly making or authorising false or misleading statements to ASIC. However, barrister James Wheeldon, a former ASIC lawyer, said any potential criminal case against an executive for misleading ASIC would need to be "clear cut," and the regulator would need to be willing to pursue the matter. This made it "highly unlikely" that any AMP executives would face jail time, he said.

"I would say that's a theoretical possibility, but I think it's highly unlikely as a practical matter for that to happen," Mr Wheeldon said. A more likely outcome would be for ASIC to impose conditions on the financial services licence of a company found to have misled the regulator, he said. AMP said in a statement it was "deeply disappointed" to have charged fees without providing service and misleaidng ASIC, and it started compensation and other work to improve its culture before the royal commisssion was launched. "We apologise unreservedly to our customers, our regulator and the community more broadly. This is not behaviour we expect in our company," AMP said. The revelations regarding AMP triggered a 4.4 per cent slide in the company's share price on Tuesday, with the stock falling a further 2.2 per cent on Wednesday, to $4.45, the lowest since September 2009.

The royal commission will spend two weeks looking at financial advice, with other parts of the financial system to be examined before a draft report is delivered in September. Given the size of the finance sector, it has been argued the timeframe is too short, and Senator Williams said the severity of some revelations had shocked even him and suggested the royal commission should be extended beyond February if commissioner Kenneth Hayne deemed it necessary. "If he's got a job to do, get it done properly the first time," said Senator Williams, a long-time critic of banking misconduct. Liberal MP Warren Entsch, another veteran critic of the banking sector, said the allegations emerging from the commission had reinforced and confirmed the concerns he and others have expressed for years. "With the blowtorch and the scrutiny on them, there's less chance they will commit these acts of bastardry in the future," Mr Entsch said.