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The Reserve Bank’s Payment System Board’s latest minutes show that the Board has endorsed the Reserve Bank working with the industry and Australian Prudential Regulation Authority on a standard set of operational performance statistics to be disclosed by individual institutions in relation to operational outages in retail payment services. The requirement to report is in response to an increase in disruptions over the past year which have caused considerable disruption to customers of the authorised…
The Department of the Prime Minister and Cabinet has issued a calendar of the Proposed Parliamentary Sittings for the remainder of 2019. Starting on 2 July Parliament will sit for only 8 weeks for the rest of the year. After various tax and superannuation bills, the legislative agenda is expected to include: Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019; Commonwealth Registers Bill 2019; National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting)…
The Australian Banking Association has published Mr Sedgwick’s interim review into the progress of banks on the implementation of his 21 original 2017 recommendations relating to the remuneration practices and product-based payments in retail banking in Australia. He recommended implementation by 2020. Background. The Financial Services Royal Commission’s Final Report recommended that banks should implement fully the recommendations of the Sedgwick Review. Sedgwick concludes that overall, while banks are moving at different speeds in…
Although the protections for small business credit are increasing, the definitions of what is a small business are inconsistent across financial services legislation and rules particularly in relation to the thresholds for employee headcount and lending amounts that determine whether a business is a small business for the relevant purpose. Different lenders may apply wider definitions. The National Credit Act does not apply to small business credit. Here is a summary. AFCA RulesFor small business…
Treasury has released a discussion paper seeking submissions on the proposed financial institutions’ supervisory levies that will apply for the 2019-20 financial year. The financial industry levies are set to recover the operational costs of APRA and other specific costs incurred by certain Commonwealth agencies and departments, including the Australian Securities and Investments Commission, the Australian Taxation Office, and the Australian Competition and Consumer Commission. The total funding required is a 10.6 percent increase from…
In a recent speech Deputy Chair John Lonsdale discussed APRA’s new cross-industry standard, CPS 320 Actuarial and Related Matters, which comes into effect on 1 July 2019. APRA is introducing this standard to strengthen the influence of the Appointed Actuary in general, life and private health insurers. He argued that actuaries cannot limit their considerations to traditional financial risks, given the substantial damage to prudential soundness that can arise from the poor management of non-financial…
The Australian Prudential Regulatory Authority (APRA) has sent a letter to private health insurers setting out its expectations for private health insurers (PHIs) to improve their resilience to sustainability challenges following its review of 15 of PHIs. APRA has reminded PHIs of the risks posed by declining affordability for policyholders, and the impact on PHIs of government policy changes in response to cost pressure across the wider health system. APRA’s review of PHI resilience has…
In Australian Securities and Investments Commission v Vocation Limited (In Liquidation) [2019] FCA 807 the Federal Court of Australia decided that Vocation Ltd (In Liquidation) made misleading and deceptive statements to the ASX and UBS AG Australia in a 25 August 2014 ASX announcement and in a due diligence questionnaire (DDQ) which formed the basis for a placement in September 2014 which raised approximately $74m from investors. It also found that Vocation’s CEO Mark Hutchinson…
ASIC Corporations (Amendment) Instrument 2018/40 has amended ASIC Corporations (Generic Calculators) Instrument 2016/207 to defer the commencement of the requirement for a generic financial calculator relating to superannuation and retirement to include the present value of future receipts and payments using an assumed rate of inflation of 3.2% until 5 December 2019. ASIC Corporations (Generic Calculators) Instrument 2016/207 provides relief for providers of generic financial calculators from the requirement to hold an AFS licence with…
APRA has published an Information paper Self-assessments of governance, accountability and culture examining the responses of APRA-regulated institutions to the Final Report of APRA’s Prudential Inquiry into the Commonwealth Bank of Australia which highlighted weaknesses by financial institutions in the management of non-financial risks – in particular, operational, compliance and conduct risks. The CBA Report listed 35 recommendations focussing on five key levers of change: more rigorous board and executive committee governance of non-financial risks;…