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. Corporate plan (APRA): APRA’s new Corporate Plan for 2022–2023 are based around the twin themes of “protecting the community today”, as well as ensuring the Australian financial system is “prepared for tomorrow”. The plan is designed to respond to rapid changes in APRA’s operating environment, including geopolitical tensions, inflationary pressures and rising interest rates, and the impact of new technologies. By way of particularity, APRA plans to increasing its focus on the evolving financial landscape in Australia including responding to the impact of new financial activities and participants; helping to find solutions to important challenges such as superannuation retirement income products, retirement income longevity solutions, insurance accessibility and affordability for Australians, and the financial risks associated with climate change; and, adopting the latest regulatory tools, techniques, and practices. APRA updates are never as good as ASIC ones, in terms of their generality, but there are a few gold nuggets in there. For example, this action item in relation to the forthcoming FAR regime “Update Prudential Standards CPS 220 Risk Management; CPS 510 Governance; and CPS 520 Fit and Proper and related guidance, to ensure they are, amongst other things, reflective of current practices and aligned with the proposed new Financial Accountability Regime (FAR).” (See page 11)
  2. Investment behavior (ASIC): ASIC has released Report 735 Retail investor research (REP 735) capturing retail investor motivations, attitudes and behaviours in the period following the onset of the COVID-19 pandemic. The research surveyed 1,053 Australian retail investors aged 18 and over who had directly traded in securities, derivatives or cryptocurrencies at least once since March 2020. 44% reported holding cryptocurrency, making it the second most common product type held after Australian shares at 73%. After bank trading platforms (used by 31% of surveyed investors), the three most commonly used platforms all specialised in cryptocurrency. Mr Longo said: “We are concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products. …ASIC is also concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of crypto-assets to better protect investors”. No major crypto platform would push back vehemently apropos regulation —so we need to get on with it. We need to pick up Senator Bragg’s report, and better calibrate it (there are a number of major wrinkles — see here) so we can catch up to the UK and US (see here) and others in supporting an industry which is here to stay and patently appealing to many investors. The ball is in the policymakers’ court here, and they need to stop dedicating so much energy to pet Labor issues e.g. litigating funding, and move to more difficult issues such as crypto, FAR and CSLR which have a bigger impact.
  3. Greenwashing (ASIC): ASIC’s Karen Chester continues to bang the greenwashing drum, following the release of INFO 274, stating that ASIC expects issuers to ensure investors have adequate information to make informed investment decisions by reference to the following questions: Have you used vague terminology?; Are your headline claims potentially misleading?; Is there a reasonable basis for a stated sustainability target?; and, Is it easy for investors to locate and access relevant information. Ms Chester stated that sustainability targets — such as net-zero commitments — require clear, time-based action plans to avoid breaching the misleading statement prohibitions. Some good guidance for those in the green investments space — there are an increasing number!
  4. Privilege (ACCC): the ATO (famously) and ASIC have long had issues with claims of privilege to resist production, and now the ACCC appears to be getting in on the action. It has set out a helpful guide on when privilege can be claimed, the format that it wants to see where privilege is claimed — complete with excel spreadsheet, and alternative approaches to claiming privilege. For example, legal professional privilege claims being particularised by reference to categories of documents, rather than by individual documents. The ACCC has state that failure to voluntarily provide the legal professional privilege information may: lead to further inquiries; result in the ACCC issuing a further notice; and, lead to action being taken for failure to comply with a notice if material has been withheld without a valid legal professional privilege claim. Overall, a balanced approach from the ACCC here in my view.
  5. Climate change guidance (FSC): the FSC has released guidance to assist investment managers in meeting their disclosure obligations. IT is a very helpful guidance note, which develops a set of common considerations for the investment management industry on the following topics: approach to assessment of emissions in portfolios, setting net-zero targets and aligning portfolios to net zero targets; appropriate product labelling and avoidance of greenwashing; and, application of Taskforce on Climate Related Financial Disclosures reporting to asset manager. For example, disclosing the fund’s objectives. The general, financial, and specific carbon or environmental objectives sought should be clearly described in the documents given to investors. If a new fund is being designed with the intention of investing in companies that will support the transition to the low carbon economy the fund should disclose this objective. A representation that a fund has specific climate risk objectives should also demonstrate that the climate related factors are substantial or significant. Together with ASIC’s guidance, this is a great piece of work to my mind!

Thought for the future: a minor rant on policymaking priorities above, is perhaps a little unfair this soon after the election. It won’t be unfair at the six month mark though, especially with our woefully short 3 year election cycles in Australia, so lets get on with the hard stuff!



Liam Hennessy

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