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ASIC has issued a consultation paper (CP 309) to update its guidance on the responsible lending provisions in the National Credit Act in Regulatory Guide 209 (RG 209). ASIC’s guidance in RG 209 has been in place since 2010 when the responsible lending laws were first introduced. It was last revised in November 2014. ASIC requests submissions by 20 May 2019 and it expects to respond to submissions in September 2019.…
The Government has introduced the Treasury Laws Amendment (Mutual Reforms) Bill 2019 into the Senate. The objects of the Bill are to: introduce a definition of a mutual entity into the Corporations Act; clarify the demutualisation provisions in Part 5 of Schedule 4 of the Corporations Act for building societies, credit unions, friendly societies and other State and Territory regulated financial institutions that transferred to Commonwealth regulation in 1999; and expressly permit mutual entities registered…
The Treasurer has announced that he has appointed a panel of 3 experts to undertake a capability review of the Australian Prudential Regulation Authority (APRA) as recommended by the Banking, Superannuation & Financial Services Royal Commission Final Report and the Productivity Commission. As part of its activities, it is anticipated that the panel will give specific consideration to APRA’s capability to promote financial stability within its frameworks as well as its readiness to respond to…
The Commonwealth Parliament will resume on 12 February 2019. The parliamentary calendar shows that it will sit for 2 weeks in February, not at all in March and then for 3 days in the week of 2 April when the Budget will be announced. It is expected that an election will then be called. Bills not passed by the time the election is called will lapse. Here is the status of some current bills. It…
The Australian Prudential Regulation Authority (APRA) has announced its plans in relation to specific recommendations relating to it contained in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Royal Commission made 10 recommendations requiring APRA to strengthen its prudential and supervisory framework. Of the 10, APRA expects that four will be completed in 2019, and a further five will be completed by the end of…
The fourth quarterly Notifiable Data Breaches report from the Office of the Australian Information Commissioner (OAIC) shows 262 data breaches involving personal information were notified to the OAIC between 1 October and 31 December 2018. The leading cause of notifiable data breaches in the December quarter was malicious or criminal attack (168 notifications, 64%), followed by human error (85 notifications, 33%) and system faults (9 notifications, 3%). Most data breaches resulting from a malicious or…
Commissioner Hayne has recommended that the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Power) Bill 2018 which is currently stalled in Parliament be extended to apply the Design and Distribution Obligations to National Credit Act products and ASIC Act products and the ASIC Product Intervention Powers be extended to apply to ASIC Act products which are not otherwise regulated by the Credit Act. If passed in its current form the Bill will…
Much was said by Counsel assisting the Financial Services Royal Commission about whether particular conduct breached a licensee’s duty to act “efficiently, honestly and fairly” and whether a further breach occurred as a result of the licensee’s failure to report that breach to ASIC. Commissioner Hayne has helpfully analysed the general conduct obligations in the context of his six norms of conduct: obey the law; do not mislead or deceive; act fairly; provide services that…
In Australian Securities and Investments Commission v Westpac Securities Administration Limited and BT Funds Management Limited [2018] FCA 2078, the Federal Court of Australia decided that even though the marketing campaign by Westpac and BT to encourage customers to roll over superannuation accounts into their account held with Westpac and BT avoided being personal advice, Westpac and BT failed to do all things necessary to ensure that the financial services covered by their financial…
The Government has released the 3 volume Financial Services Royal Commission Final Report (download here) together with the Government’s Response. The Commissioner has made 76 recommendations dealing with banking (including consumer and small business lending), financial advice, superannuation, insurance, culture, governance and remuneration, regulators and other matters. The recommendations are wide-ranging and do not simply deal with the regulatory system but also matters that will have governance risk and compliance impact for financial…