In this version, we contemplate newly launched draft publicity laws on regulating international monetary providers suppliers, a case on deceptive or misleading advertising and marketing practices for a credit score fund, the Federal Government’s response to funds critiques and fee reforms, and far more.
Click on every heading under to learn extra about every of those areas: monetary merchandise, funds, superannuation, insurance coverage, monetary product recommendation, monetary markets, anti-cash laundering, client credit score, banking and different monetary providers regulation.
Financial merchandise
Government consults on proposed international monetary providers supplier regulation
On 20 December, the Treasury printed publicity draft laws in search of stakeholder views on the primary tranche of publicity draft laws to supply regulatory reduction for international monetary service suppliers (FFSPs). This follows session undertaken earlier this yr in relation to reduction choices (for extra data, see our earlier Issue 56).
According to the Treasury, the publicity draft laws seeks to introduce:
- the comparable regulator exemption, which exempts FFSPs authorised to supply monetary providers in a comparable regime from the requirement to be licensed when coping with wholesale shoppers;
- the skilled investor exemption, which exempts FFSPs that present monetary providers from exterior Australia to skilled traders from the requirement to be licensed in Australia; and
- an exemption from the match and correct particular person evaluation to quick monitor the licensing course of for FFSPs authorised to supply monetary providers in a comparable regulatory regime.
Consultation closes on 12 January 2022.
Treasury releases publicity draft laws on worker share scheme reforms
On 20 December, Treasury launched publicity draft laws that seeks to take away regulatory boundaries in providing an worker share scheme.
Treasury states the brand new draft laws has the next modifications in contrast with earlier consultations:
- making the supply of regulatory reduction contingent on provides together with sure phrases – together with phrases limiting the dimensions of purchases and provision of disclosure paperwork;
- altering the restrict on the dimensions of purchases to a financial cap the place an worker can outlay $30,000 per yr (which might be accrued for unexercised choices over a 5‑yr interval, as much as a most of $150,000) plus 70% of dividends and 70% of money bonuses, for an unlisted firm worker share scheme provide;
- eradicating the restrict on the dimensions of purchases the place the phrases are such that an worker can not pay for his or her pursuits except there’s a liquidity occasion, and the sale or itemizing value is larger than what the worker pays;
- limiting loans to staff who should not current shareholders;
- extending regulatory reduction in respect of points to sure discretionary trusts, per current reduction in respect of provides to senior managers;
- extending regulatory reduction in respect of free provides to impartial contractors; and
- together with ASIC exemption and modification powers, and regulation-making powers.
The session paper moreover seeks suggestions on the need of a difficulty cap and any different regulatory mechanisms that could possibly be used to minimise the danger of fundraising by way of worker share schemes.
Consultation closes on 4 February 2021.
Government pronounces reforms to require licensing of proxy advisers
On 17 December, the Treasurer, Josh Frydenberg, and the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, collectively introduced that the Government intends to introduce laws to increase the Australian Financial Services Licence (AFSL) regime to cowl a better vary of proxy adviser actions, and by requiring proxy advisers to be impartial of their institutional shoppers.
The licensing extension and the requirement to supply copies of proxy recommendation to corporations will start from 7 February 2022, with the brand new independence and superannuation voting disclosure necessities commencing 1 July 2022.
ASIC indicators MoU with Croatian monetary providers regulatory authority
On 10 December, ASIC introduced that it has signed with the Croatian Financial Services Supervisory Agency, a memorandum of understanding (MoU) concerning mutual help in the supervision and oversight of managers of other funding funds that function on a cross-border foundation, and the entities they delegate features to or that maintain securities on their behalf.
Government pronounces important fee system reforms
On 8 December, the Government printed its response to the Review of the Australian Payments System, the Senate Select Committee on Australia as a Technology and Financial Centre Final Report, and the Parliamentary Joint Committee Corporations and Financial Services Report on Mobile Payment and Digital Wallet Financial Services.
In a joint media launch, the Treasurer, Josh Frydenberg, and the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, introduced that the great reforms will, amongst others:
- modernise the foundations governing how Australians transact every single day, together with by way of new types of fee like Digital Wallets and Buy Now Pay Later;
- purpose to present Australian’s confidence that companies they have interaction with to purchase, promote or maintain digital belongings like crypto are topic to applicable oversight and licencing preparations; and
- examine the feasibility of a Central Bank Digital Currency and search to deal with the advanced problem of de-banking.
The Treasurer additionally defined that the reforms will progress in two phases, with essentially the most pressing and instantly implementable reforms to be consulted on in the primary half of 2022 and the rest by the top of 2022.
Funds
Federal Court palms down case on deceptive credit score fund advertising and marketing
On 26 November, the Australian Securities and Investments Commission v La Trobe Financial Asset Management Ltd [2021] FCA 1417 was handed down. The case arose out of ASIC’s allegations of deceptive or misleading conduct by the accountable entity in relation to a credit score fund. Ultimately, the events submitted agreed details of contraventions by the accountable entity. The related conduct comprised:
- the usage of the names ’48 Hour Account’ and ’90 Day Account’ on-line and in print media to confer with funding choices in circumstances the place, below the structure, the accountable entity had as much as 12 months to fulfill withdrawal notices and the place traders would additionally be capable of solely withdraw in accordance with a withdrawal provide the place the fund was illiquid. Disclaimers had been additionally not outstanding; and
- the usage of the phrase ‘capital stable’ to explain the fund, which represented that capital invested wouldn’t lower in worth or be misplaced in circumstances the place an individual who invested in the fund may considerably lose capital invested and disclaimers weren’t outstanding.
The Court accepted that the conduct was deceptive or misleading. In assessing the appropriateness of the proposed penalty, Judge Jagot made quite a few observations, together with that:
- the place a illustration is made on a web site, a separate illustration and due to this fact a separate contravention arises every time an individual accesses the related web page. Similarly, a separate contravention arises every time an individual reads a newspaper or journal commercial; and
- it was a related issue to Her Honour’s evaluation of the suitable penalty that the accountable entity had beforehand altered its advertising and marketing in response to ASIC’s correspondence, and that ASIC had indicated it had no additional feedback. Her Honour famous that, whereas ASIC has no duty to advise firms and expressions of opinion by ASIC don’t function as defences to contraventions, such correspondence was related to the accountable entity’s total culpability, notably the deliberateness of the contraventions and its angle towards authorized compliance.
Commenting on the choice, ASIC famous that it’s involved about such misconduct in promotional materials, particularly when traders are in search of yield in a low rate of interest economic system.
(*61*) funding laws registered
On 25 November, the Corporations Amendment ((*61*) Funding) Regulations 2021 was registered.
According to the Explanatory Statement, the aim of the laws is usually to:
- introduce an extra situation on a litigation funding entity’s AFSL that stops a authorized consultant of the plaintiff in a funded motion from having or acquiring a cloth monetary curiosity in the litigation funder for that motion; and
- make technical amendments to the Corporations Regulations to make sure consistency following the graduation of the Corporations Amendment (Improving Outcomes for (*61*) Funding Participants) Bill 2021 (which is at present earlier than Parliament, and establishes a brand new sort of scheme generally known as the ‘class action litigation funding scheme’).
The laws arose out of session undertaken from September to October this yr. For extra data on the session, see our earlier Issue 59.
Superannuation
APRA publishes MySuper and Choice Heatmaps
On 16 December, APRA printed its first Choice Heatmap, alongside the annual MySuper Heatmap.
APRA states the Choice Heatmap captures merchandise and choices in which members have made an energetic determination to speculate, represents the primary time the efficiency of this section of the market has been uncovered to such public scrutiny, whereas the MySuper Heatmap has been expanded to incorporate every product’s evaluation end result obtained below the brand new Your Future, Your Super Performance Test.
The heatmaps can be found on APRA’s web site.
ASIC publishes findings and suggestions from its assessment into tremendous trustees that supply revenue safety insurance coverage
On 10 December, ASIC introduced that a 2021 ASIC assessment has highlighted that trustees want to look at outcomes for his or her members and proactively contemplate whether or not they’re delivering worth for cash by way of their insurance coverage in superannuation providing. In its assessment, ASIC examined the practices of the trustees of 5 giant funds that offered default revenue safety insurance coverage on an choose-out foundation to members.
According to ASIC, to deal with the problems recognized in the assessment, trustees ought to:
- receive and analyse information, together with from their insurer, to evaluate how offsets have an effect on member outcomes, together with whether or not some teams of members are receiving low or no worth;
- enhance the extent and high quality of disclosures to members regarding revenue safety offsets, particularly when a member’s revenue safety insurance coverage pays a diminished profit; and
- clearly clarify to their members how ‘offset’ clauses work, in order that members could make knowledgeable choices about their insurance coverage.
APRA consults on proposed amendments to SPS 310
On 10 December, APRA printed a letter to RSE licensees and RSE auditors, consulting on proposed amendments to APRA Prudential Standard SPS 310 Audited and Related Matters (SPS 310). According to the letter, the proposed modifications are meant to align with modifications to APRA’s reporting requirements for superannuation.
Consultation closes on 11 March 2022.
APRA publishes FAQs in relation to Superannuation Data Transformation venture
On 3 December, APRA introduced the publication of six extra frequency requested questions (FAQ) in relation to reporting requirements and the reporting of historic information for Phase 1 of the Superannuation Data Transformation venture. The FAQs can be found on APRA’s web site.
Insurance
APRA consults on proposed updates in anticipation of AASB 17
On 13 December, APRA printed proposed updates to the capital and reporting frameworks for insurance coverage in anticipation of the introduction of Australian Accounting Standards Board 17 Insurance Contracts (AASB 17) on 1 January 2023. The proposal supplies can be found on-line.
According to APRA, the present life and normal insurance coverage capital framework and reporting framework are based mostly on present accounting requirements. The proposed updates are ready in respect of AASB 17, in addition to replace different facets of the framework.
APRA states that the proposals are additionally related for personal well being insurers, as APRA intends to align the personal medical health insurance capital framework to the life and normal insurance coverage capital framework.
Consultation closes on 31 March 2022.
APRA commences additional session on personal well being insurer capital framework
On 13 December, APRA introduced that it would undertake additional session on measures designed to strengthen the capital framework for personal medical health insurance (PHI). According to APRA, the proposed new framework relies on the life and normal insurance coverage capital framework, however tailored to swimsuit the totally different options of PHI.
The session supplies might be discovered right here, and embrace:
- draft capital requirements and reporting requirements;
- quantitative impression examine workbooks; and
- a response paper setting out APRA’s response to stakeholder suggestions offered to this point.
Consultation closes on 31 March 2022.
Government publishes assessment into authorities terrorism reinsurance scheme
On 10 December, the Assistant Treasurer, Michael Sukkar, introduced the publication of the ultimate report into the Governments assessment of the Terrorism Insurance Act 2003 (Cth). According to the ultimate report, the assessment recommends that the terrorism insurance coverage scheme (which is run by the Australian Reinsurance Pool Corporation (ARPC)) stay in place.
According to the ultimate report, the assessment additionally discovered that:
- there may be but to be a transparent and evident market failure in relation to bodily property injury from cyber terrorism requiring authorities provision of reinsurance by way of ARPC; and
- the present preparations for ARPC governance stay applicable for its current features.
The ultimate report is obtainable on Treasury’s web site right here.
Government consults on obligatory reinsurance pool for cyclones and associated flood injury
On 3 December, the Assistant Treasurer, Michael Sukkar, introduced the graduation of session on draft laws on the reinsurance pool for cyclones and associated flood injury. The publicity draft laws, laws, explanatory materials in addition to a truth sheet are out there from Treasury.
According to the factsheet, amongst different issues:
- the reinsurance pool for cyclones and associated flood injury will likely be backed by a $10 billion Government assure and canopy family, residential strata and small enterprise property insurance coverage insurance policies;
- the Australian Reinsurance Pool Corporation will function the pool from 1 July 2022;
- normal insurers with eligible insurance policies will likely be required to take part, and the pool will likely be funded by charging reinsurance premiums to insurers; and
- from 1 July 2022 to 30 June 2025, the pool will cowl the entire value of eligible cyclone and associated flood injury claims above the policyholder’s extra, and from 1 July 2025, the pool will function on a danger-sharing association with insurers.
Consultation closes on 17 December.
ASIC pronounces findings from insurance coverage claims dealing with assessment venture
On 1 December, ASIC introduced it has accomplished a venture reviewing insurance coverage claims dealing with outcomes for shoppers affected by the 2019-20 ‘Black Summer’ bushfires. ASIC states that it recognized quite a few good practices, which it encourages all insurers to undertake extra broadly.
ASIC additionally states that, with reforms to claims dealing with commencing from 1 January 2022, it would proceed to work with business and will likely be monitoring insurers to make sure claims are dealt with in a well timed, correct and clear method.
Financial product recommendation
Government releases draft Terms of Reference for high quality of recommendation assessment
On 16 December, the Government launched for suggestions and stakeholder views draft Terms of Reference for the ‘Advice Review’.
The Review of the standard of economic recommendation Draft Terms of Reference states that the aim of the assessment is contemplate to how the regulatory framework may higher allow the availability of excessive-high quality, accessible and reasonably priced monetary recommendation for retail traders, per suggestions 2.3, 2.5 and a couple of.6 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, acknowledged that the Quality of Advice Review goals to establish alternatives to streamline and simplify regulatory compliance obligations to scale back value and take away duplication, recognising that prices of compliance by companies are finally borne by shoppers.
Consultation closes on 4 February 2022.
ASIC publishes monetary advisor hub on its web site
On 7 December, ASIC introduced that it has launched a Financial Advice Hub for recommendation licensees and advisors. According to ASIC, the hub is a one-cease entry level for pertinent steering and data impacting monetary recommendation licensees, advisors, and related stakeholders.
‘Better Advice’ academic and coaching requirements registered
On 6 December, the Corporations (Relevant Providers—Education and Training Standards) Determination 2021 (Determination) was registered.
According to the Explanatory Statement, the aim of the Determination is to help amendments made in the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Cth) by placing in place rules to information the administration of the monetary advisor examination by ASIC and setting training and coaching requirements for the availability of tax (monetary) recommendation providers by related suppliers.
The Determination commences on 1 January 2022 and aligns with the graduation of the Act.
ASIC publishes restricted recommendation steering and instance for advisors
On 1 December, ASIC printed an data sheet and instance Statement of Advice (SoA) to help monetary advisors and recommendation licensees adjust to their obligations when offering restricted private recommendation to retail shoppers.
ASIC states that, in creating the SoA instance, it consulted with FASEA who confirmed that the instance is per advisors’ obligations below the FASEA Financial Planners and Advisers Code of Ethics.
Financial markets
ASX consults on modifications to cancellation ranges and cancellation course of for ASX Trade
On 6 December, the ASX printed a session paper setting out its proposals for quite a few potential modifications to the cancellation ranges and cancellation course of that the ASX is at present reviewing for the administration of the ASX Trade market.
Consultation closes on 31 January 2022.
ASIC market integrity willpower registered
On 6 December, the ASIC Market Integrity Rules (Securities Markets) Determination 2021/991 and ASIC Market Integrity Rules (Securities Markets) Repeal Instrument 2021/992 had been registered.
According to the Explanatory Statement, the aim of the devices is to find out the Tier 1 Equity Market Products and the Tier 2 Equity Market Products for the needs of paragraph 6.2.1(1)(c) of the ASIC Market Integrity Rules (Securities Markets) 2017, and to repeal the present willpower ASIC Market Integrity Rules (Securities Markets) Determination 2021/772 (which is to be outmoded).
The Explanatory Statement confirms that the Determination and Repeal Instrument keep current coverage settings below the present willpower.
ASIC publishes cyber resilience report on monetary markets corporations
On 6 December, ASIC printed a report on the cyber resilience of economic markets corporations. According to ASIC Report 716 Cyber resilience of corporations in Australia’s monetary markets: 2020–21, the general cyber resilience of corporations working in Australia’s monetary markets has remained regular, nonetheless, it has fallen wanting focused enchancment by respondents for the interval.
ASIC states that every one corporations ought to contemplate the appliance of the great practices recognized in the report for managing provide chain danger administration, and that failure to speculate in provide chain danger administration may result in important client hurt which may warrant ASIC investigation and motion.
Anti-money laundering
Additions and modifications made to AML/CTF Rules
On 13 December, the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2021 (No. 3) was registered.
According to the Explanatory Statement, the aim of the amending laws is to make the next modifications to the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (AML/CTF Rules):
- the insertion of Chapter 79, which units out particular circumstances in which a reporting entity could perform the relevant buyer identification process in respect of a buyer after commencing to supply the designated service of opening an account;
- the insertion of Chapter 80, which excludes sure sorts of merchandise which can be unintentionally caught by the definition of a ‘stored value card’ below the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act); and
- an modification of Chapter 48, which expands the present exemption from the AML/CTF Act regarding wage packaging providers to incorporate payroll and superannuation clearance providers.
The amending laws commenced on 14 December.
AUSTRAC publishes a set of AML/CTF updates and reminders
On 13 December, AUSTRAC printed:
- three prime suggestions arising out of AUSTRAC’s insights from 2020 compliance reporting;
- new sources for reporting entities to enhance their AML/CTF methods and processes;
- a reminder to reporting entities to supply suggestions on up to date steering in relation to reporting threshold transaction stories by 22 December 2021;
- an replace in relation to AUSTRAC’s System Transformation Program;
- details about AUSTRAC’s induction packages for brand new reporting entities; and
- the second half to an explainer on AUSTRAC’s regulatory and intelligence features.
AUSTRAC publishes monetary crime information in relation to catastrophe help funds fraud
On 9 December, AUSTRAC introduced the publication of a brand new monetary crime information designed to assist monetary providers companies detect and report suspicious transactions indicative of fraud and misuse of emergency and catastrophe funds administered by way of Services Australia. The monetary crime information is obtainable on AUSTRAC’s web site.
(*61*) funding schemes exempt from AML/CTF
On 30 November, the Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2021 (No. 2) was registered.
According to the Explanatory Statement, the aim of the amending laws is to amend the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) to exempt the issuing of an curiosity in a litigation funding scheme from the operation of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) when the particular person issuing the curiosity holds an AFSL and the litigation funding scheme is both registered with ASIC or exempt from the registration requirement.
The amending laws commenced on 1 December.
Consumer credit score
ASIC consults additional on product intervention order for brief time period credit score and persevering with credit score contracts
On 9 December, ASIC printed a session paper in search of suggestions on a proposed use of its product intervention powers to deal with important client detriment in the quick-time period credit score and persevering with credit score contracts industries. The session supplies comprise:
- ASIC Consultation Paper 355 Product Intervention Orders – Short Term Credit and Continuing Credit Contracts (CP 355);
- Attachment 1 to CP 355, being the draft ASIC Corporation (Product Intervention – Short Term Credit) Instrument 2022/XXX; and
- Attachment 2 to CP 355, being the draft ASIC Corporation (Product Intervention – Continuing Credit Contracts) Instrument 2022/XXX.
The new paper continues session carried out by ASIC in 2020 in relation to persevering with credit score contracts (for extra data, see our earlier Issue 47).
Consultation closes on 21 January 2022.
ASIC consults on ASIC reduction for easy preparations with shoppers in hardship
On 8 December, ASIC commenced session on whether or not to increase the written discover exemption below ASIC Class Order [CO 14/41] for credit score suppliers and lessors who enter into easy preparations with shoppers in hardship.
According to ASIC, [CO 14/41] relieves credit score suppliers and lessors from the duty to supply written discover to shoppers about hardship contract variations of 90 days or much less (generally known as ‘simple arrangements’), and is because of expire on 1 March 2022. In ASIC Consultation Paper 354 ASIC reduction for easy preparations following a hardship discover: [CO 14/41], ASIC invitations stakeholders to supply submissions on whether or not the category order continues to type a helpful a part of the regulatory framework.
Consultation ends on 1 February 2022.
Banking
Government response to the National Housing Finance and Investment Corporation Act 2018 Review
On 16 December, the Government launched its response to the Statutory Review of the Operation of the National Housing Finance and Investment Corporation Act 2018 launched on 28 October 2021.
Treasury states the Government helps 21 of the Review suggestions in full or in precept.
The response might be discovered on Treasury’s web site.
APRA points session reminders to ADIs
On 10 December, APRA reminded authorised deposit-taking establishments (ADIs) that they are going to be required to fulfill the necessities of APRA Prudential Standard APS 220 Credit Risk Management (APS 220) from 1 January 2022. APRA additionally introduced that the proposed modifications in relation to which APRA consulted in December 2020 won’t be progressing at this stage (for extra data on the session, see our earlier Issue 48).
APRA reminded entities that it’s at present consulting on a proposed new attachment to APS 220 An data paper on this was launched on 11 November. The proposal pertains to APRA’s proposed macroprudential measures for ADIs, and is obtainable on APRA’s web site.
APRA publishes FAQs in relation to liquidity therapy of sure sorts of deposits
On 9 December, APRA printed a brand new set of steadily requested questions (FAQ) in relation to APRA Prudential Standard APS 210 Liquidity and APRA Reporting Standard ARS 210.0 Liquidity. According to APRA, the updates make clear the liquidity therapy of sure sorts of deposits.
You can learn the liquidity FAQs on-line.
Report on wholesale CBDC analysis venture printed
On 8 December, the Reserve Bank of Australia (RBA), Commonwealth Bank of Australia, National Australia Bank, Perpetual and ConsenSys, with extra enter from King & Wood Mallesons, printed a report on the profitable conclusion of Project Atom, a collaborative analysis venture and proof-of-idea that examined the potential use and implications of a wholesale type of central financial institution digital forex (CBDC) utilizing distributed ledger know-how (DLT).
According to the report, amongst different issues:
- there are a selection of potential advantages in offering non-financial institution wholesale market individuals with entry to a CBDC issued by the RBA for settling transactions and as a retailer of worth – nonetheless, broader entry past business banks additionally raises quite a few coverage and authorized points;
- the proof-of-idea demonstrated that the digitisation of syndicated loans on a DLT platform may present important effectivity beneficial properties and cut back operational danger; and
- the proof-of-idea additionally demonstrated that an enterprise-grade DLT platform may deal with most of the attainable necessities on a wholesale CBDC and tokenised belongings platform.
APRA publishes FAQs in relation to measurement of capital
On 7 December, APRA printed steadily requested questions (FAQ) on the measurement of capital for the ADI, normal insurance coverage and life insurance coverage industries.
According to APRA, the FAQs will likely be reviewed and up to date when the Australian Accounting Standards Board 17 Insurance Contracts comes into impact and numerous updates to the life and normal insurance coverage capital framework updates are finalised. You can learn the measurement of capital FAQs on APRA’s web site.
APRA publishes new financial institution capital framework paperwork
On 29 November, APRA introduced the finalisation of its new financial institution capital framework designed to strengthen monetary system resilience and to make sure Australia’s compliance with the Basel III framework. The framework was developed over 4 years of session.
As a part of the announcement, APRA printed:
- APRA Information Paper An Unquestionably Strong Framework for Bank Capital;
- the newest non-confidential submissions and its response; and
- up to date prudential requirements in relation to capital adequacy and credit score danger capital,
which can be found on APRA’s web site: ‘Revisions to the capital framework for authorised deposit-taking institutions’.
APRA additionally printed draft prudential steering for session.
Consultation closes on 11 March 2022.
Other monetary providers regulation
APRA releases annual pleasant society bulletin
On 16 December, APRA launched the annual pleasant society bulletin.
APRA states the annual pleasant society bulletin offers an aggregated abstract of the pleasant society business for a 12-month reference interval, and in addition accommodates a variety of information gadgets for every particular person entity, together with revenue and loss, steadiness sheet and solvency data.
APRA and ASIC publish annual replace on joint engagement
On 15 December, APRA and ASIC printed their annual replace on engagement between the 2 regulators.
Examples of collaboration between the businesses embrace:
- collaboration on mortgage compensation deferrals and borrower hardship, and a variety of points regarding the insurance coverage sector (together with in relation to enterprise interruption insurance coverage and particular person incapacity revenue insurance coverage);
- participation in a cross-company working group with the Treasury and the Australian Financial Complaints Authority to interact with business on enterprise interruption insurance coverage take a look at circumstances being heard in the Federal Court;
- co-chairing of a Trans-Tasman Supervisory College throughout 2021 that introduced collectively six Australian and New Zealand regulators to think about points associated to client safety, prudential regulation and conduct regulation (amongst others); and
- engagement with collectively regulated monetary service suppliers on the problems of cyber readiness and operational resilience. Also, as a part of the Council of Financial Regulators, APRA and ASIC have been creating a protocol to cope with the administration of a cyber incident at a monetary service supplier.
ASIC pronounces help for ISSB and local weather-associated disclosure steering
On 14 December, ASIC introduced its help for the institution of the International Sustainability Standards Board (ISSB). The ISSB was introduced on the 2021 United Nations Climate Change Conference and its goal is to develop excessive-high quality international baseline local weather and sustainability disclosure requirements to fulfill traders’ data wants.
ASIC additionally reminded listed corporations that they’re inspired to make use of Taskforce on Climate-related Financial Disclosures suggestions as the first framework for voluntary local weather change-associated disclosures.
Government releases response to inquiry into future instructions for CDR
On 14 December, the Treasurer, Josh Frydenberg, and the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, collectively introduced that the Government is increasing the Consumer Data Right (CDR) to allow shoppers and companies to instruct third events to provoke actions on behalf and with their consent.
The Government response arises out of the inquiry into future instructions for the CDR (for extra data on the ultimate report of this inquiry, see our earlier Issue 49). The full response is obtainable on Treasury’s web site, right here.
According to the Treasury, the Government’s response additionally commits to different really helpful reforms that can develop the CDR ecosystem and foster better worldwide engagement.
Amendments to crucial infrastructure belongings below international funding assessment framework
On 9 December, the Foreign Investment Review Board (FIRB) introduced that the Security Legislation Amendment (Critical Infrastructure) Act 2021 (Cth) (Act) was registered on 7 December.
According to FIRB, the Act expands the variety of crucial infrastructure belongings below the Security of Critical Infrastructure Act 2018 (Cth), with circulation-on implications for notification necessities below the Foreign Acquisitions and Takeovers Act 1975 (Cth).
On 14 December, FIRB introduced that Treasury has up to date the National Security Guidance Note to mirror the expanded scope of the obligatory notification necessities below the international funding framework flowing from the Act, Security of Critical Infrastructure (Definitions) Rules 2021 and the current launch of the Blueprint and Action Plan for Critical Technologies.
RBA publishes 2020/21 evaluation of abroad clearing and settlement facility
On 3 December, the Reserve Bank of Australia (RBA) printed its 2020/21 evaluation of LCH Limited’s SwapClear service (a UK-based mostly, systematically vital central counterparty in Australia which clears round 90% of the cleared AUD over-the-counter rate of interest derivatives market).
According to the evaluation, LCH Limited is licensed below part 824B of the Corporations Act to supply an abroad-based mostly clearing and settlement facility. According to the RBA, LCH Limited has carried out its affairs in a manner that promotes total stability in the Australian monetary system.
APRA consults on prudential requirements to strengthen disaster preparedness
On 2 December, APRA launched for session a dialogue paper and two draft prudential requirements to strengthen disaster preparedness throughout banks, insurers and superannuation trustees.
Draft Prudential Standard CPS 190 Financial Contingency Planning introduces necessities for all APRA-regulated entities to develop contingency plans to answer monetary stress by both recovering their monetary resilience or exiting APRA-regulated actions in an orderly method.
Draft Prudential Standard CPS 900 Resolution Planning requires giant or advanced entities, or those who present crucial features to the economic system, to be ready for decision to minimise the impression on the neighborhood and the monetary system.
The dialogue paper and draft prudential requirements might be discovered on the ‘Strengthening crisis preparedness’ web page of APRA’s web site.
Written submissions are requested by 29 April 2022.
ASIC consults on proposals in relation to reporting audit high quality critiques to entities
On 2 December, ASIC commenced session on proposals to vary its method to the communication of audit high quality findings recognized from ASIC’s assessment of audit recordsdata to the administrators of the entities audited.
According to ASIC Consultation Paper 352 Communicating audit findings to administrators, audit committees or senior managers (CP 352), ASIC could talk particular monetary reporting and audit high quality findings recognized from critiques of audit recordsdata on to administrators, audit committees or senior managers of an organization, accountable entity or disclosing entity to assist the entity to correctly handle its affairs.
According to CP 352, ASIC’s proposal is to speak audit high quality findings from its critiques of audit recordsdata to administrators of the entities involved on a routine foundation reasonably than an exception foundation. ASIC additionally printed a draft up to date ASIC Regulatory Guide 260 Communicating findings from audit recordsdata to administrators, audit committees or senior managers.
Consultation closes on 11 February 2022.
ALRC publishes first interim report from inquiry into simplifying monetary providers legal guidelines
On 30 November, the Australian Law Reform Commission (ALRC) printed the primary of three interim stories as a part of its inquiry into the potential simplification of legal guidelines that regulate monetary providers in Australia. For extra data on the inquiry, see our earlier Issue 45.
According to the ALRC, the legal guidelines regulating firms and monetary providers are uniquely and unnecessarily advanced. The ALRC states that the report features a draft mannequin for the way the legislation could possibly be designed to make it simpler to seek out related necessities, and exceptions to these necessities.
The ALRC is in search of written submissions on proposals and questions in the interim report.
Consultation closes on 25 February 2022.
ASIC extends monetary reporting deadlines by one month
On 30 November, ASIC introduced that it’ll lengthen the deadline for unlisted entities to lodge monetary stories by one month for steadiness dates from 24 December 2021 to 7 January 2022 (inclusive), because of challenges introduced by COVID-19 situations. The operative instrument, ASIC Corporations (Amendment) Instrument 2021/976, was registered on 2 December.
This consists of deadlines below Chapter 7 of the Corporations Act to lodge revenue and loss and steadiness sheets (and different related data) for unlisted AFS licensees. According to the Explanatory Statement, an extension of the deadline for unlisted registered schemes to lodge compliance plan audit stories will robotically happen because of the extension for registered schemes.
Financial Regulator Assessment Authority’s evaluation of ASIC’s effectiveness and functionality commenced
On 29 November, the Treasurer, Josh Frydenberg, introduced the publication of the Financial Regulator Assessment Authority’s (FRAA) first assessment of the effectiveness and functionality of ASIC.
The scope of the evaluation was printed by FRAA on its web site.
Consultation closes on 28 January 2022.
CDR privateness impression evaluation and authorities businesses’ response printed
On 29 November, the Treasury made out there on its web site:
- the fourth replace to the Privacy Impact Assessment (PIA) for the Consumer Data Right (CDR); and
- the response by the Treasury, ACC and the Office of the Australian Information Commission to suggestions made by the PIA.
APRA finalises prudential steering on managing the monetary dangers of local weather change
On 26 November, APRA launched its ultimate prudential follow information on local weather change monetary danger.
The information covers APRA’s view of sound follow in areas equivalent to governance, danger administration, state of affairs evaluation and disclosure of local weather-associated monetary dangers, and is designed to be versatile in permitting every establishment to undertake an method that’s applicable for its measurement, buyer base and enterprise technique.