Keeping on top of the latest financial services regulatory & compliance trends?

Investing time in your professional development within a rapidly changing financial services industry is challenging. To meet that challenge, the Australian regulators weekly wrap is designed to keep you at forefront of your practice by quickly setting out the top 5 developments from the past week, analysis and practical considerations for the future.

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  1. FAR (Senate): both houses resume this week — expect the financial accountability regime, and compensation scheme of last resort to be passed. Generation defining changes, and work to implement FAR should begin now if it has not already. It takes 9–12 months for an average insurer / super fund in our experience.
  2. CBA / crypto (CBA): Australia’s largest bank has has limited transfers to ‘high-risk’ crypto exchanges (which it has not specified). In addition to some outright bans, CBA will impose a 24-hour transaction hold for customers wanting to transfer money to any crypto exchanges, as well as a $10,000 monthly limit. The banks are incentivised to protect their customers against scams, sure, but we need to figure out a way to support crypto companies and other fintechs as well. We cannot have them effectively debanked (and create concentration risk in one or two banks who have taken a different position). Their potential for the economy — now, and in the future, is immense.
  3. Debanking (AUSTRAC): fascinatingly, the same week CBA has issued its news, AUSTRAC has issued guidance which notes the risk that some sectors pose though make clear that there is no requirement in the AML/CTF Act or Rules to decline to provide designated services to whole industry sectors, notwithstanding a financial institution’s assessment of the industry sector’s relative risk. A timely reminder.
  4. Binance / Coinbase (SEC): the US Securities and Exchange (SEC) issued lawsuits against Binance and Coinbase. The charges against Binance include selling unregistered securities — BNB and BUSD — and operating as an unregistered securities exchange and broker-dealer in the US. The lawsuit seeks disgorgement of “ill-gotten funds” and permanently banning the firm from operating as a crypto and securities business in the US. It’s a really harsh action. SEC Chair Gary Gensler has previously made known his views on crypto, stating “Congress included a long list of 30-plus items in the definition of a security, including the term ‘investment contract’…. the vast majority of crypto tokens meet the investment contract test. … Thus, crypto security issuers need to register the offer and sale of their investment contracts with the SEC or meet the requirements for an exemption”. It is a little tricky to my mind; the US doesn’t have a consistent policy framework for crypto assets (despite what the SEC says), and so the regulators are adopting a ‘regulation by enforcement’ approach. (Which is the opposite of Braithwaite’s pyramid approach to responsive regulation.) The situation is arguably paralleled in Australia. Better, would be calibrated, proportionate regulation which protects consumers and encourages industry — all of whom desperately want to comply / be licensed. Treasury is doing a good job, and now we need the red team’s i.e. Stephen Jones strong support behind them.
  5. Payments system (Treasury): a glut of materials from Treasury, which has released: 1) Strategic Plan for the future of Australia’s payments system, which sets out its policy objectives and priorities for the payments system; 2) Government statement in response to the Statutory Review of the Consumer Data Right; 3) Licensing of payment service providers — payment functions; and, 4) Reforms to the Payment Systems (Regulation) Act 1998. There is quite a lot in here, and with everything else to cover this week, I suggest you look at page 2 of the strategic plan. If you think that something covers you e.g. licensing, then look at the relevant separate paper. In relation to licensing specifically, which is a big one, that paper states “The lack of clarity around the scope of the existing regulatory perimeter means only some PSPs have an AFSL, and two businesses providing functionally equivalent payment services to customers may not be regulated consistently.” Expect the number of businesses required to be licensed to rise (one hopes ASIC is being appropriately resourced to handle the influx!).

Thought for the week: CPS 511 comes into play for many large organisations at the start of July 2023. It is not just the policy that needs to be calibrated though, it is the surrounding artefacts which will connected in under FAR e.g. consequence management structure / frameworks. Get in touch if you’d like a copy of a list (value-add).



Liam Hennessy

AU financial services lawyer in compliance, regulatory & disputes. Email sign-up: and LinkedIn: