Keeping on top of the latest financial services regulatory & compliance trends?
Investing time in your professional development within a rapidly changing financial services industry is challenging. To meet that challenge, the Australian regulators weekly wrap is designed to keep you at forefront of your practice by quickly setting out the top 5 developments from the past week, analysis and practical considerations for the future.
- Lightspeed finance (ASIC):ASIC has commenced proceedings in the Federal Court against credit assistance provider Lightspeed Finance Pty Ltd and its director Mark James Fitzpatrick for failing to comply with AFCA determinations. Failing to comply with determinations dating back to 2018 and 2019, which were accepted by the client, ASIC alleges that Lightspeed failed to give effect to both AFCA determinations and that Mr Fitzpatrick was knowingly involved in these breaches. Since March 2019, courtesy of Commissioner Hayne, failure to co-operate with AFCA is a civil penalty offence with penalties of $10,500,000 for a company and $1,050,000 for an individual. It is an interesting legislative overlay on a system which is contractual by nature. You can read the concise statementhere my top read for the week!
- VW Appeal (Court):the Full Federal Court dismissed an appeal by Volkswagen AG against the penalties handed down earlier for making false representations about compliance with Australian diesel emissions standards. The Federal Court imposed penalties of $125 million in December 2019, and Volkswagen appealed this decision, seeking orders that the Court instead impose the $75 million penalty amount which had been jointly put to the Court by Volkswagen and the ACCC. In dismissing the appeal, the Full Court upheldthe $125 million penalty imposed by the Federal Court, and held that the $125 million penaltywas not excessive, let alone manifestly excessive.Interestingly, in a situation that paralleled the Federal Courts refusal to endorse the Westpac responsible lending settlement ASIC and Westpac initially sought to reach, it is further emphasis that the courts will consider but not necessary agree with consent judgment outcomes as to penalties. This is not the US!
- Debt collection (ASIC / ACCC):aguidelinehas been jointly produced by the ACCC and ASIC to help businesses understand how the Commonwealth consumer protection laws apply. It applies to both creditors who are directly involved in debt collection and to specialist external agencies who provide debt collection services, including theAustralian Consumer Law, theAustralian Securities and Investments Commission Act 2001(Cth),National Consumer Credit Protection Act 2009(Cth) which includes the National Credit Code. Part 1 covers practical matters in seeking to recover debts e.g. hours of contact, methods of contact, etc. Part 2, brilliantly to my mind, covers the remedies consumers have against overzealous debt collectors, and covers trespass and prohibition of coercion, etc. In an economic world ravaged by COVID-19, and with jobkeeper ended and more debts being chased, I think this is an excellent practical output by ASIC and ACCC.
- Business interruption cases (Court): QBE last week become the latest to contribute to the multiple test cases relating to the pandemic winding their way through the courts. QBEs case adds to matters pursued through the Insurance Council of Australia (ICA) test case process. ICA and AFCA agreed last year on a case to determine whether exclusions that reference the repealedQuarantine Act1908 and subsequent amendments apply also to diseases under the replacementBiosecurity Act2015. QBEs case is against Educational World Travel, which entered voluntary administration last year, and aims to test Victorian legislation that insurers argue has the effect of making exclusions citing the repealed Quarantine Act valid. There are about 56 tests cases on foot at the present time, all of which will be highly determinative for the insurance industry, though ultimately it will come down to the contract clauses themselves which most insurers by now will have completed an assay of to determine their position.
- Business registers (Treasury):the Modernising Business Registers program will establish a new whole-of-government registry platform. It will bring together ASICs 31 business registers and the Australian Business Register onto a new modern system at.the ATO. The Government has announced the appointment of the Commissioner of Taxation as the Commonwealth Registrar of the Australian Business Registry Services. An interesting development, it will certainly free up ASIC, and may cause the 2.7 million registered companies to think about what if any interaction the MBR program will have with the taxation.
Thought for the week:last week my firm released a regtech program which allows financial services firms to identify potential breaches across 7 regimes e.g. money laundering and cyber-attacks and data breaches, collate information and form a legal view within strict statutory timeframes for a low fixed fee or internally for free. The aim is to be a foil to a raft of nasty breach reporting regimes being introduced this year. Learn morehere, or get in touch with me directly for a quick demo!