David Jacobson

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The Australian Securities and Investments Commission (ASIC) has issued Consultation Paper CP 311 Internal dispute resolution on proposed changes to Regulatory Guide 165 Licensing: Internal and external dispute resolution including a proposed framework for mandatory Internal Dispute Resolution (IDR) data reporting by financial firms to ASIC. The proposed new guidelines contained in consultation paper 311 include a strict set of rules for the acceptance, response times and reporting of customer complaints. The regulator believes the…
The Australian Prudential Regulation Authority (APRA) has issued draft revisions to its guidance in APG 223 Residential Mortgage Lending on the interest rates to be used in serviceability assessments that authorised deposit-taking institutions (ADIs) perform on residential mortgage loan applications. APRA is proposing to remove its guidance issued in December 2014 that ADIs should assess whether borrowers can afford their repayment obligations using a minimum interest rate of at least 7 percent. Instead, ADIs would…
The election is over. But the new Parliament will not commence until the counting has finished for both Houses and the results are declared. Here is a list of pending commencement dates for legislation that was passed in the last Parliament: 27 June Debt agreement reforms1 July Superannuation accounts changes1 July Whistleblower protections1 July  Banking Executive Accountability Regime for small and medium  ADI’s For a list of some of the Bills that…
The re-election of the Government means that it will not implement the recommendation of the Financial Services Royal Commission in respect of mortgage broker commissions. The Royal Commission recommended that The borrower, not the lender, should pay the mortgage broker a fee for acting in connection with home lending.Changes in brokers’ remuneration should be made over a period of two or three years, by first prohibiting lenders from paying trail commission to mortgage brokers in…
The Privacy Commissioner has released the Notifiable Data Breaches Scheme 12-month Insights report, outlining the lessons learned from the first four quarters of statistics on its operation together with the latest quarterly statistics report for January to March 2019. The report provides evidence of the human factor in data breaches — training and improving processes and technology are critical to keeping customers’ personal information safe. The Insights Report examines the first four quarters of…
Whichever major party forms Government next week, the large banks will be required to contribute to funding for customer compensation and services. In its April Budget, the LNP Government announced (Budget Paper 2, page 167) that an industry-funded compensation scheme of last resort for consumers and small business will be established. The cost of this measure will be partially offset by revenue received through ASIC’s industry funding model and increases in the APRA Financial Institutions…
The Australian Securities and Investments Commission (ASIC) has written to the CEOs of several major Australian financial institutions regarding their preparations for the end of LIBOR (London Interbank Offered Rate) and their transition to alternative benchmarks. Following the global financial crisis, several financial benchmarks were found to have been subject to manipulation attempts by market participants. In response to this, global regulators initiated IBOR reforms and have been working with markets to: strengthen the interbank…
APRA has published a series of letters regarding superannuation regulation changes. APRA’s directions power The Australian Prudential Regulation Authority (APRA) has welcomed the passage of legislation granting it stronger powers to take action against the trustees of underperforming superannuation funds. The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Act 2019 provides APRA with a comprehensive directions power. It also gives APRA the power to take civil penalty action against…
Australian Securities & Investments Commission v Westpac Banking Corporation has returned to the Federal Court for an 8-day hearing on the role of benchmarks in responsible lending unsuitability assessments. Background. ASIC has amended its claim to focus on the general obligation to assess unsuitability under section 128 of the National Credit Act rather than to examine whether particular loans should have been assessed as unsuitable. ASIC alleges that under Westpac’s Automated Decision System the…
The commencement of ASIC’s new product intervention powers means that if you are a provider or distributor of any retail financial product, which now includes both regulated and unregulated credit, ASIC has powers in addition to its regulation of licences. I am regularly asked whether the provision of a particular product would require a financial services licence or a credit licence, if the enquirer does not already hold a licence, or a new authorisation, if…