John Williams

Need for inquiry: John Williams. Photo: Supplied

The Australian Securities and Investments Commission could face a government inquiry into its regulation of the financial services industry after revelations the corporate watchdog ignored whistleblowers' warnings about misconduct inside the Commonwealth Bank.

The call for an inquiry comes after a Fairfax Media investigation found ASIC waited 16 months to formally investigate tip-offs about improprieties inside CBA's financial planning division that put the life savings of thousands of clients at risk.

CBA has so far paid out $36.4 million in compensation to 725 victims who received ''inappropriate advice'' from seven financial planners who were eventually banned from working in the industry by ASIC.

Nationals senator John Williams said there was a strong need for a Senate inquiry into the charter, performance, accountability and operations of ASIC in light of its ''concerning'' role in the scandal.

''ASIC had a golden opportunity to act quickly and send a clear message that misconduct won't be tolerated but it didn't. If it acted quickly, how much money would have been saved?'' he said.

The move has been backed by Labor senator Doug Cameron and Greens leader Christine Milne.

Senator Cameron said ASIC did a ''crap job'' handling the CBA scandal after a contentious Senate estimates hearing last week where he accused ASIC deputy chairman Peter Kell of failing to adequately respond to questions about the regulator's conduct.

''I was very disappointed at the performance of ASIC at the estimates hearing but not as disappointed as the public, who is dependent on them to safeguard their savings,'' Senator Cameron said.

An inquiry requires 39 votes. The Coalition can deliver 34, with five votes needed from the Greens, ALP and independents, including Nick Xenophon and John Madigan.

Senator Milne said the Greens were open to an inquiry into why ASIC had delayed acting on the evidence provided by whistleblowers. ''I'm also concerned to read allegations that the bank appears to have taken action to cover up what occurred.''

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