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An important lesson of the recent responsible lending decision in ASIC v Westpac is that principles-based regulation can be interpreted by a business differently from ASIC’s interpretation and the business’s interpretation can still be lawful as long as it achieves the right outcome. Principles-based legislation relies on general principles to express the outcomes to be achieved by regulated businesses rather than detailed prescriptive rules and processes. If a law does not prescribe exactly what a…
The government has released the final report of the ACCC Foreign Currency Conversion Services Inquiry. Background. The ACCC found that while there were signs that recent competition from new non-bank entrants is delivering better consumer outcomes through lower prices and improved services there is scope for more competition in the supply of international money transfers (IMTs). The ACCC’s recommendations include measures aimed at: reducing a key barrier to entry and expansion for non-bank suppliers…
The ACCC has published the final version of the proposed Competition and Consumer (Consumer Data Right) Rules 2019 that it is submitting to the Treasurer for consent. These rules cover the foundational rules required to implement the Consumer Data Right in banking. The objective of the CDR is to provide consumers with the ability to efficiently and conveniently access specified data held about them by businesses (data holders) and to authorise the secure disclosure of…
The Office of the Australian Information Commissioner has published their report on notifications received by them under the Notifiable Data Breaches (NDB) scheme between 1 April 2019 and 30 June 2019. Malicious or criminal attacks accounted for 151 data breaches in the quarter, while human error accounted for 84 data breaches. System faults accounted for 10 data breaches. Data breaches caused by human error included sending personal information to the wrong recipient via email (35…
The Australian Prudential Regulation Authority (APRA) has updated its Enforcement Approach to include principles that APRA will take into account when considering when and how to publicise its enforcement actions, and guidance on APRA’s approach to enforcement for data submissions.  Background. APRA says it will consider when and how to publicise the enforcement actions it takes on a case by case basis. However, unless there are likely to be risks to beneficiaries’ interests…
Assistant minister for superannuation, financial services and financial technology Jane Hume has announced plans to legislate to provide extra time for existing advisers to meet new Financial Adviser Standards and Ethics Authority’s requirements. Background. Under the new requirements, advisers on the Financial Adviser Register as of 1 January 2019 would have one extra year to complete the FASEA-approved exam (by January 1, 2022) and two additional years to meet FASEA’s qualification requirements (by January…
The Australian Prudential Regulation Authority (APRA) has finalised its review of Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) following the passage of Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Act 2019. The key changes made to the revised SPS 515 are: a requirement for each RSE licensee to undertake an annual business performance review (BPR), to assess its performance in achieving its strategic objectives…
Treasury has released for consultation an exposure draft of the National Consumer Credit Protection Amendment (Mortgage Brokers) Bill which will amend the National Credit Act to require mortgage brokers to act in the best interests of consumers when providing credit assistance. Conflicted remunerationThe Bill also deals with conflicted remuneration by providing that: Where there is a conflict of interest, mortgage brokers must give priority to consumers in providing credit assistance in relation to credit contracts.…
One of the fundamental elements of the National Credit Act licensing regime is section 31(1) which prohibits credit licensees from conducting business with parties engaging in credit activity without an Australian credit licence. ASIC has announced that it has commenced Federal Court proceedings against NAB seeking declarations and penalties in relation to ASIC’s claims that between 3 September 2013 and 29 July 2016, NAB accepted information and documents in support of consumer loan applications from…
ASIC has announced that it has approved changes to the Australian Financial Complaints Authority (AFCA) Rules to allow the scheme to name financial firms in published determinations. While determinations have been published by AFCA’s predecessor external dispute resolution schemes, the names of firms involved in financial services, superannuation and credit complaints have not been published to date. Consumers who are a party to a complaint will continue to be anonymised in all determinations. To support…