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The Parliamentary Joint Committee on Corporations and Financial Services has released its report on The operation and effectiveness of the Franchising Code of Conduct. In respect of financing and lending, the Report identifies misconduct related to small business lending, including in franchising. The committee draws attention to the detrimental consequences of irresponsible lending and borrowing in the franchise sector. The committee also questioned franchisor-assisted lending, and whether it risks artificially inflating the value of franchise…
Reserve Bank of Australia Deputy Governor Guy Debelle has given a speech which highlights the ‘scale, persistence and systemic risk of climate change’. He said that both the physical impact of climate change and the transition are likely to have first-order economic effects. He gave two current examples of how climate is affecting the economy: investment in renewable energy sources in the Australian economy and how environmental policy decisions taken in China have had a…
The Financial Services Council (FSC) has announced that as a result of suggestions from stakeholders including the approval of the Code by the Australian Securities and Investments Commission (ASIC), a rewrite of the Code in plain English and the need for further consultation the revised Life Insurance Code of Practice will not commence on 1 July 2019. Background. However from 1 July 2019, the FSC will enact a moratorium on life insurance genetic…
The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 was given Royal Assent on 12 March 2019 and will commence on 1 July 2019. The Act creates a single whistleblower protection regime in Part 9.4AAA of the Corporations Act 2001 to cover the corporate, financial and credit sectors, and create a new whistleblower protection regime in the taxation law, to protect those who expose tax misconduct. It replaces the existing whistleblower laws administered by APRA…
The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 received Royal Assent on 12 March 2019 and commenced on 13 March 2019. The Act increases the criminal and civil penalties for corporate and financial sector misconduct that apply under the Corporations Act 2001, the Australian Securities and Investments Commission Act 2001 (the ASIC Act), the National Consumer Credit Protection Act 2009 (the Credit Act), and the Insurance Contracts Act 1984. Background.…
The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 was given Royal Assent on 12 March 2019. The Act includes provisions designed to protect low-balance accounts and prevent trustees from allowing inactive accounts to be eroded by insurance premiums. They will commence on 1 July 2019. Additional measures that are intended to prohibit opt-out insurance for members who are under 25 years old and on low-balance accounts were separated from the Bill and were…
ASIC and APRA have each given updates on their regulation of superannuation. The Financial Services Royal Commission endorsed the current ‘twin peaks’ model of financial regulation. Responsibility for conduct and disclosure regulation lies primarily with ASIC and responsibility for prudential regulation with APRA. ASICIn a recent speech ASIC Commissioner, Sean Hughes discussed the examples of the types of unacceptable conduct that were highlighted in the Royal Commission that relates to superannuation which include: poor governance and…
The Australian Prudential Regulation Authority (APRA) has released information for private health insurers on the implementation of the Governance, Fit and Proper, and Audit prudential standards, due to commence on 1 July 2019. APRA has set out its proposed approach to assessing applications for transitional arrangements relating to the three new prudential standards: Prudential Standard CPS 510 Governance (CPS 510);  Prudential Standard CPS 520 Fit and Proper (CPS 520); and  Prudential Standard HPS…
ASIC has released a consultation paper (CP 310) seeking feedback on the proposed coverage of its review of the ePayments Code. ASIC’s review will focus on testing the effectiveness of the following areas in the Code: complaints handling; unauthorised transactions; data reporting; and mistaken internet payments. The review will also consider options for future-proofing the Code. Recent developments in payments include mobile banking, digital wallets, the New Payments Platform (which is new infrastructure…
The fourth edition of the ASX Corporate Governance Council’s Principles and Recommendations has been released. Background. The amended Principles will apply to listed entities on an “if not, why not,” basis for financial yearscommencing on or after 1 January 2020. Board Charter Recommendation 1.1 has been amended to be consistent with the recommendations of the Financial Services Royal Commission. It specifically identifies issues that the board of a listed entity should be responsible for under…