Australian regulators weekly wrap — Monday, 24 April 2023

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. RBA review (Treasury): the Federal Government has released a review of the RBA. It has made 51 recommendations on topics including monetary policy and the RBA’s corporate governance. The Government has said it agrees with the recommendations, and will implement them. One of the reccomendations is more robust corporate governance, including the establishment of a new governance board to support and oversee management — basically a two tiered board structure.
2. Scams (ASIC): ASIC analysis revealed that scam losses for major bank customers exceeded $550m last financial year and impacted more than 31,700 customers — Report 761 Scam prevention, detection and response by the four major banks. The report found that the overall approach to scams strategy and governance of major banks was variable and overall less mature than expected, and there were gaps and inconsistencies in how the banks detect and stop scam payments. Useful reading, as the prevalance and seriousness of scams rises Australia-wide!
3. Super product performance (APRA): the prudential regulator has released two guides on product performance histories. The first is a technical determination on technical determination that would remove the need for APRA to make individual determinations for lifecycle MySuper products, while the second is an information paper outlining APRA’s methodology for combining performance histories of trustee-directed products for this year’s performance test. The papers are available here.
4. Tranche 2 reforms (AUSTRAC): the AG has released a consultation on proposed reforms include extending the existing AML/CTF legislation to capture additional ‘tranche-two’ high risk entities including lawyers, accountants, trust and company service providers, and real estate agents and certain commodities dealers. The reforms also aim to: reduce complexity and regulatory burden on industry, ensure the regime remains fit for purpose, and harden Australian businesses and sectors against exploitation by serious organised criminals.
5. Merger control (ACCC): one I missed a few weeks back — the head of the ACCC has said that “Merger control is an important lever used by competition authorities to help preserve a competitive economy. Changes to Australia’s current regime are needed. It is no longer fit for purpose.” She has said that Australia’s merger regime needs to move away from a voluntary enforcement model to a formal clearance model. Big changes there, and one to watch for the future!

Thought for the future: Tranche 2 AML / CTF reforms are a massive change, and one which is well overdue in my view!