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. Breach reporting (Treasury): the Financial Services Sector Reform (Hayne Royal Commission Response — Breach Reporting and Remediation) Regulations 2021 was issued last week. It removes some — unfortunately not many — civil penalty provisions from the new AFSL breach reporting regime commencing in October 2021 (which we have spent the last 8 months compiling in a huge register). I have summarised them for you in the attached factsheet.
  2. ASIC approach (ASIC): Six reforms arising out of recommendations from the Royal Commission and other inquiries will commence in October. The new laws include design and distribution obligations, restrictions on the unsolicited selling of financial products (hawking), a deferred sales model for add-on insurance products, reference checking and information sharing requirements for financial advisers and brokers, and new requirements around how breaches are reported to ASIC and disputes are managed internally in firms. ASICs has now confirmed that it will adopt a transitional approach in terms of policy i.e. it will not immediately come down hard from an enforcement perspective. ASIC Chair Joe Longo has stated: “ASIC’s initial approach extends to technical or inadvertent breaches, where firms have systems changes underway and act quickly to address problems as they arise. However, where firms are not acting in good faith or where we detect conduct causing actual harm, we will not hesitate to enforce the law.”
  3. Electronic execution (Treasury): the Federal Government has just passed the Treasury Laws Amendment (2021 Measures №1) Bill 2021 (“the Bill”) to facilitate the electronic execution of documents under s127 of the Corporations Act 2001 (Cth). It provides that the fixing of a common seal can be witnessed electronically; a document in physical form may be signed using split execution; a director, secretary or witness may electronically sign a document (or a copy or counterpart of the document); and, a copy or counterpart need not include all signatures. I will be updating our master spreadsheet of the electronic executions laws across various jurisdictions, instruments and entities shortly — look out for that one shortly.
  4. Financial advisers disciplinary body (Treasury): the Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021 establishes a single disciplinary body for financial advisers and the requirement that all financial advisers who provide personal financial advice to retail clients be registered. It was introduced into Parliament on 24 June 2021. The Government has released a policy paper seeking feedback on two matters which will be included in regulations to support the single disciplinary body, being the circumstances when ASIC must convene the single disciplinary body to determine a disciplinary matter, and the types of administrative sanctions made against a financial adviser that must be included on the Financial Advisers’ Register. The consultation is open until 20 August 2021.
  5. FAR (Treasury): the consultation for the financial accountability regime has finalised. Hopefully, there will be a number of strong submissions pushing back on some of the more contentious aspects, including the breadth of the product accountability role, the double jeopardy elements and more detail around the interpretation to be applied to the obligations. You can read Gadens’ submission here.

Thought for the future: we are delivering a lot of DDO, breach reporting and FAR presentations at the moment, in preparation for October 2021. Do get in touch if you are interested in learning more!

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AU financial services lawyer in compliance, regulatory & disputes. Email sign-up: http://eepurl.com/gG9Kk1 and LinkedIn: https://www.linkedin.com/in/lthennessy/

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Liam Hennessy

Liam Hennessy

AU financial services lawyer in compliance, regulatory & disputes. Email sign-up: http://eepurl.com/gG9Kk1 and LinkedIn: https://www.linkedin.com/in/lthennessy/

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