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Treasury has released for consultation the Financial Accountability Regime (FAR) draft Bill which will extend the Banking Executive Accountability Regime to all APRA-regulated entities, with joint administration from APRA and ASIC. An accountable entity is generally the entity which is licensed or otherwise authorised by APRA to carry on banking, insurance or superannuation business. The FAR legislation is being prepared for introduction and passage in the 2021 Spring sittings of Parliament. The Financial Accountability Regime…
The Treasurer has announced the Government’s decision on limited class exemptions to the deferred sales model for add on insurance as well as the products that will not be covered by the anti-hawking regime. Background. Both of these reforms were included in the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 and  commence on 5 October 2021. Deferred sales exemption The Government will exempt from the deferred sales model the following classes of…
Treasury has issued a consultation paper Relief to Foreign Financial Service Providers on options for relief from the requirement to hold an Australian Financial Service Licence (AFSL) if they carry on a financial services business in Australia The relief would be limited to FFSPs that deal with wholesale clients and professional investors. The options are: provide Australian licensing relief to FFSPs that are already similarly licensed and regulated in other jurisdictions that want to enter…
The Australian Prudential Regulation Authority (APRA) has released for consultation its draft expectations regarding ADIs’ preparedness for the possibility of zero and negative interest rates. Although the Reserve Bank of Australia has stated that a negative cash rate is highly unlikely in Australia, APRA says that irrespective of the level of the cash rate, it is possible that other interest rates determined in the financial markets could fall to zero or below zero at any…
The Sedgwick Review into product sales commissions and product based payments in retail banking in Australia addressed conduct and culture issues in banks. The review related to bank staff and third parties who receive payments for selling bank products such as deposit accounts, mortgages and credit cards. Background. The Australian Banking Association has now published the 2021 Final Review & Report. The report concludes: Links between remuneration and sales are now rare and,…
The Australian Retail Credit Association is consulting on proposed changes to the Privacy (Credit Reporting) Code. Changes are required to be made to the Code as a result of changes to the National Credit Act and the Privacy Act by the National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Act 2021 which take effect on 1 July 2022 . Background. The changes relate to: Licensed credit provider to disclose (and receive)…
This year all parts of the financial services sector have been affected by change: from banking and lending to payment services, financial advice, insurance, and superannuation. There has been an increase in the businesses that require a licence (insurance claims handlers and debt management firms) as well as an increase in the obligations of financial services licensees, credit licensees, and responsible superannuation entities. In October we’ll see changes to the breach reporting regime, as well…
A key element of the product design and distribution obligations of financial services and credit licensees which commence on 5 October 2021 is identifying your product’s target market. In developing a product for a target market you have to understand their needs and whether vulnerable customers are a part of that customer base. Neither the Corporations Act, the National Credit Act or ASIC RG274 Product design and distribution obligations define who are vulnerable customers. Background
Austrac has released its money laundering and terrorism financing (ML/TF) risk assessment of Australia’s non-bank lending and financing sector, which shows a medium level of ML/TF risk to the sector. For the purposes of the report, a non-bank lender and financier is a business that offers individuals and businesses loans, mortgages, personal finance, credit cards and other types of finance, but does not hold a banking license. They do not feature on the Australian…
The Government has released exposure draft legislation to facilitate the use of technology in holding meetings, to execute company documents, and send meeting-related materials. These reforms make permanent the temporary measures put in place during the COVID-19 pandemic relating to electronic execution of company documents and meeting notifications which expired on 21 March 2021. They also modify the Treasury Laws Amendment (2021 Measures No.1) Bill 2021 which temporarily allows some changes (until 15 September 2021)…