Crypto Report (Parliament): I have now spent a bit of time on the new crypto bill. By way of reminder, on 19 September 2022, Senator Andrew Bragg released a draft private members bill, entitled the Digital Assets (Market Regulation) Bill 2022 (the Bill). Under the Bill, a licence is required to carry out the following activities in Australia…
Remediation Plan (ASIC): ASIC has released its new remediation guidance, RG 277. Mandatory reading for anyone who deals with breach reporting, and fixing the problems that arise up, RG 277: clarifies nine principles for conducting a remediation, which will help licensees comply with their obligations and conduct…
FAR (ASIC): Information from an ASIC session with the Chair and Commissioners this week in which I took the following notes. FAR will be passed in Spring sitting. It will come into effect for ADIs in March 2023. It will come into effect for Super / Insurers in March 2024. Finally, there is lots of work going on in the background…
Corporate Plan (APRA): APRA’s new Corporate Plan for 2022/2023 is based around the twin themes of protecting the community today, as well as ensuring the Australian financial system is prepared for tomorrow. The plan is designed to respond to rapid changes in APRA’s operating environment,…
DDO (ASIC): MASSIVE news this week on the AISC enforcement front. It has placed interim stop orders on three financial firms in response to deficiencies in the target market determination for their products. These actions are ASIC’s first use of the stop order powers under the design and distribution obligations,…
FATCA/CRS (ATO): The ATO has issued a self-review guide and toolkit on the internal processes and systems that reporting financial institutions should maintain to comply with the Foreign Account Tax Compliance Act and the Common Reporting Standard, which has been something of a focus for it in preceding years…
Conflicted Remuneration (ASIC): In Australian Securities and Investments Commission v Select AFSL Pty Ltd (No 2) [2022] FCA 786, the Federal Court of Australia held that conflicted remunerations contraventions took place for the Respondent, Select AFSL. Select AFSL was part of a corporate group structure which retailed…
Lanterne (ASIC): ASIC has commenced civil penalty proceedings against Lanterne Fund Services, alleging multiple failures to meet the obligations of its AFSL, including a failure to meet organisational competence requirements. It alleges Lanterne, under a licensee for hire business model e.g. under Corporate Authorised Representative…
Litigation Funders (Treasury): Well, that did not take long! Assistant Treasurer Stephen Jones has put himself on record, stating that the process of funder backed class action will be removed from ASIC and remitted to the Federal Court and state supreme courts. It follows Attorney-General Mark…
Crypto Legislation (US): I am not sure what is happening in the US with leaked documents recently, but the WSJ has leaked the draft crypto legislation which you can readhere. A dense document it is US legislation after all some of the key points are: the bill is centered around the terms digital asset…
Federal ICAC (Election): the election is over, and the red team has formed a majority Government. Importantly, the main election promise Labor has made on integrity is to establish what it says will be a “powerful, transparent and independent National Anti-Corruption Commission.”…
Litigation Funding Schemes (ASIC): ASIC has extended the relief from certain dollar disclosures in PDS’s for litigation funding schemes in ASIC Corporations (Disclosure in Dollars) Instrument 2016/767 until 1 October 2026. Relief has been extended by ASIC Corporations (Amendment) Instrument 2022/264…
Crypto regulation (Treasury): the Treasury has released its consultation paper onCrypto asset secondary service providers: Licensing and custody requirements(Consultation Paper) raising 32 consultation questions in relation to crypto licensing and custody requirements…
CDR Extension (Treasury): In January 2022, the Government announced that the Consumer Data Right (CDR) would expand to Open Finance as the next sector to be assessed. A massive step for the financial services industry, phase 1 of Open Finance will include the assessment and designation of the non-bank lending sector…
Youpla Group (ASIC): Very unusual. Following the liquidation of one funeral fund, ASIC has written to the directors of Youpla Group to ask them to take immediate and public action to address concerns about the financial viability of ACBF 1, ACBF Plan and ACBF Community. Youpla manages four entities that…
CCIV (Parliament): The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 finally passed Parliament on 10 February. The CCIV regulatory framework utilises a company structure limited by shares so that it is recognisable to offshore investors and fund managers. As a company, a CCIV will generally be…
Exchange Traded Products (ASIC): ASIC has released Consultation Paper 356 ETP naming conventions: Updates to INFO 230 (CP 356), seeking feedback on proposals to update the guidance in Information Sheet 230 Exchange-traded products: Admission guidelines (INFO 230), on naming conventions for licensed…
Liquidity Facility (APRA): APRA has issued a letter to banks announcing the aggregate Committed Liquidity Facility has reduced to $102 billion on 1 January 2022 from $140 billion on 10 September 2021.Since January 2015, those ADIs to which APRA applies the Basel III liquidity standards have…
January changes (Legislation):by way of a quick refresher, new requirements which commence this month include: APS 220 Credit Risk Management; Financial Services and Credit Panel commences; SP S250 Insurance in Superannuation; Insurance Claims Handling required AFSL…
ISG Financial Services v AFCA (AFCA):the Australian Financial Complaints Authority or AFCA is an external dispute resolution scheme for consumers who are unable to resolve complaints with member financial services organisations. Membership of AFCA is a requirement under law or license condition of virtually all…
Breach reporting (Treasury):theFinancial Services Sector Reform (Hayne Royal Commission Response Breach Reporting and Remediation) Regulations 2021was issued last week. It removes some unfortunately not many civil penalty provisions from the new AFSL breach reporting regime commencing in October 2021…
LIBOR (APRA, ASIC and RBA):ASIC, APRA and the RBA have followed the Financial Stability Boards lead, andreleasedstatements confirming their requirement that the use of LIBOR in new contracts should cease as soon as practicable, and no later than the end of 2021. The Financial Stability Boards…
Statutory unconscionable conduct (ACCC): inAustralian Competition and Consumer Commission v Quantum Housing Group Pty Ltd[2021] FCAFC 40the Full Federal Court upheld an appeal by the ACCC and declared that Quantum had engaged in an unconscionable system of conduct in its dealings with investors regarding…
General v. personal advice (Court):the High Court handed down its decision inWestpac Securities Administration Ltd v Australian Securities and Investments Commission[2021] HCA 3, dismissing Westpacs appeal against the Federal Courts decision that the marketing campaign by Westpac…
Consumer remediation (ASIC):ASIC has released a consultation paper on proposed updates toRegulatory Guide 256:Client review and remediation conducted by advice licensees. Consultation Paper 335Consumer Remediation: Update to RG 256(CP 335) includes clarification of RG 256s application to all financial services licensees…
Corporate Criminal Liability Review (ALRC):following the Hayne Royal Commission , there were increased concerns that corporations, and senior officers within those corporations, were not being adequately held to account for serious corporate misconduct.(Criminal liability for corporations has always been a fraught…
Mortgage Brokers??BID (ASIC): the Australian Securities and Investments Commission (ASIC) has just released RG 273, which sets out its view on how mortgage brokers may comply with their best interests obligations which commence in January 2021. Consistent with the nature of the regime, and not unexpectedly,…
COVID-19 Taskforce (ACCC):the ACCC has established an internal COVID-19 Taskforce which is communicating with businesses to educate them about their obligations in relation to cancellations, refunds and suspension of services as a result of COVID-19. The ACCChas said thatits focus more broadly is on: 1) COVID-19 scams…
Consultations (Treasury):TheTreasury released late last Friday a large number ofconsultationsin response to recommendations from the Hayne Royal Commission. They include: a)Financial Services Royal Commission??Enhancing consumer protections and strengthening regulators; b)Ongoing fee arrangements and disclosure…
Class actions (High Court):in a decision with massive implications for the class actions industry, theHigh Court rejected5:2 the joint decisions of the NSW Court of Appeal and Full Federal Court of Appeal that courts have the power to make common fund orders (CFOs). CFOs are essentially an order by the court that…
Financial sludge (ASIC):the Dutch Authority for Financial Markets (AFM) and ASIC havereleased a joint report on mandated disclosure requirements in financial markets. Simply put??disclosure is necessary but not enough on its own to drive good consumer outcomes. The report calls for a rethink on disclosure as…
Binary options / CFDs: ASIC is having fun wielding its new product intervention power again. This time ASIC is aiming to address significant detriment to retail clients resulting from binary options (one of the more exotic options where the payoff is a liquidated sum or nothing) and contracts for difference…