The Australian Securities and Investments Commission (ASIC) has flagged enforcement action against Commonwealth Bank and ClearView as it takes a tougher approach to breaches.

Chairman James Shipton says ASIC initially focused on remediation in the case of Commonwealth’s mis-selling of consumer credit insurance and ClearView’s breach of anti-hawking laws, but is now considering further action as part of broader changes at the regulator.

“We have a guidance and a process whereby we believe we should be asking ourselves whether or not we should be taking financial institutions to court, and we are minded to use the enforceable undertaking tool less and court enforcement action more,” he told the Hayne royal commission last week.

ASIC’s enforcement team is investigating the Commonwealth mis-selling issues following completion in September of an independent review.

Royal commission Counsel Assisting Rowena Orr noted the delay on enforcement action goes back years and questioned why the regulator did not start its investigation after receiving notification from the bank about issues in May 2015.

“It was, according to your statement, about a month ago, on October 22, nearly two-and-a-half years after the notification by CBA and months after the matter was examined in the public hearings in the royal commission, that your enforcement team accepted that referral,” she said.

Mr Shipton, who began his five-year tenure at ASIC in February, says it was a mistake not to consider running an investigation in parallel with the remediation program, and the regulator should also have earlier pursued breaches by life insurer ClearView as a criminal matter.

“That is yesterday’s mindset – that is not the mindset that exists today,” Mr Shipton said.

ASIC is reconsidering criminal action against ClearView, but has had to consider the effect of terms previously reached with the company, the royal commission heard.

Mr Shipton also says ASIC’s choice of cases to pursue has been hampered by resourcing and its relatively small enforcement team.