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. Shipton & Crennan (ASIC): ASIC’s Chairman will temporarily step aside after it was revealed ASIC paid more than $118,000 for him to receive personal tax advice. Mr. Shipton has agreed to repay the money for the advice, which he received after he relocated to Australia from the United States to head up ASIC in 2018. The situation was uncovered by an investigation by the Australian National Audit Office (ANAO), and Mr Shipton said ASIC accepted all the findings. The audit office also raised concerns about a $70,000 housing cost payment made over two years to ASIC’s deputy chair Daniel Crennan QC, following his relocation from Melbourne to Sydney in early 2019. Both Shipton and Crennan are repaying the monies. You can read more on the development in ASIC’s announcement here, which presents a challenge for a regulator which has been successfully rebuilding its image in the wake of the Hayne Royal Commission. Watch the very capable Karen Chester, who has assumed Shipton’s role in an acting capacity, and may be poised for the top job…
  2. Electronic meetings (Treasury): the Government is seeking stakeholder views on exposure draft legislation that makes permanent changes to the Corporations Act 2001 in relation to virtual meetings and electronic document execution. By modernising the Corporations Act 2001 and associated regulations through these reforms, companies have the opportunity to utilise technology to satisfy their legal obligations. The reforms make permanent the temporary relief, which allows companies to hold meetings virtually, send meeting-related materials electronically and validly execute documents electronically. In response to stakeholder feedback, the reforms proposes additional enhancements to ensure corporate accountability and transparency. A long overdue change, and a (small) silver lining to COVID-19, public consultation on the exposure draft legislation and explanatory material will close on 30 October 2020.
  3. Bribery & Corruption (BCA): Asia Taskforce Discussion Paper No. 2 Managing Bribery and Corruption: A framework for Australian businesses has been prepared as part of a series of short reports on specific topics identified by the Asia Taskforce to supplement the findings and recommendations contained in the Taskforce Interim Report. One of the objectives of the Taskforce was to identify barriers to success in Asia — bribery and corruption (B&C) stands out as a key concern for management, boards and investors. There are ten takeaways, most of them put at a macro level (as you will see form the first takeaway!): 1) B&C is illegal in all markets in Asia and in Australia; 2) Australian businesses can be highly successful in Asia with well-structured frameworks to manage B&C risks; 3) B&C risk management must be an integral part of any market entry strategy with pre -market entry research and due diligence particularly important; 4) establish a comprehensive B&C risk management framework that evolves and is “live” in the business at all levels; 5) ensure Asian experience and B&C expertise is within reach through targeted hires and trusted advisors and consultants; 6) stakeholder mapping is critical to understand and manage vitally important in-market relationships; 7) B&C must involve a whole of company approach from the Board cascaded down through the company and its business partners; 8) market-relevant training, delivered in local languages and reflecting in-market conditions significantly enhances B&C risk management; 9) monitoring, audits and transparent processes will ensure B&C issues are identified, escalated and managed appropriately; and 10) Australian Government agencies can do more to support Australian businesses to understand and deal with B&C issues. An interesting, if not entirely ground-breaking report, it should nonetheless be useful in promoting its core aim of facilitating discussion around B&C.
  4. Unfair contract terms (ASIC): ASIC has updated its information sheets on unfair contract terms protections for consumers and small businesses. The protections will be extended to insurance contracts following the Government’s enactment of the Financial Sector Reform (Hayne Royal Commission Response — Protecting Consumers (2019 Measures)) Act 2020. The changes will take effect from 5 April 2021. Critically, information sheet 210 (INFO 210) and information sheet 211 (INFO 211) now provide information about how the unfair contract terms will apply to insurance contracts from 5 April 2021. For e.g., it provides that for insurance contracts, the main subject matter is limited to what is being insured — under a comprehensive car insurance policy, the main subject matter is the car that is being insured. The term that describes the car cannot be considered under the unfair contract terms law. It also specifies that a beneficiary under a small business insurance contract can also challenge a term in a small business contract if they think it is unfair. A beneficiary under an insurance contract is a party who is not expressly stated on the certificate of insurance to be the insurance policyholder but who stands to benefit directly from a claim under a policy. In preparation for the unfair contract term protections applying to insurance contracts, ASIC is undertaking targeted supervisory work with industry. The focus of ASIC’s supervisory work is on: a) terms that allow an insurer to cash settle a claim based on the cost of repair to the insurer; b) terms that are an unnecessary barrier to a consumer lodging a claim; c) terms that reduce the cover offered where compliance with the preconditions is unfeasible; and d) terms that use an outdated, and therefore inaccurate or restrictive, medical definition.
  5. Announcement (AFCA): AFCA is reminding firms that on 1 November 2020, the six-month temporary time extension for firms to provide responses to financial difficulty complaints and complaints that have already been through internal dispute resolution will come to an end. From 1 November 2020, AFCA’s process will revert to the original response timeframes, giving financial firms 21 days to respond to financial difficulty complaints and complaints that have already been through internal dispute resolution. The timeframes will revert and take effect after 31 October, relevant complaints received after that will be subject to a 21-day response. AFCA will also require initial responses to complaints that have reached the case management stage within the requested timeframe (7, 14 or 21 days as appropriate).The ceasing of this time extension follows AFCA’s announcement in April that for a six month period, financial firms would have an extra 9 days to respond to complaints that have already been through the firm’s internal dispute resolution process, taking the total time to respond from 21 days to 30 days. You can view AFCA’s detailed process map here showing the response timeframes (my top read for the week!).

Thought for the future: with thanks someone whose work I respect (Paul Muir), it appears that at least one service has arisen modelling itself on the consumer ‘debt adviser’ model (which industry segment ASIC / AFCA have each had things to say about) — but for financial services remediation. For example, for fees for no service or mis-sold products. ‘Remediator’ here advises on whether a consumer has a claim, pursues it (presumably via lodging an AFCA application on a consumer behalf) and takes a clip of the ticket to the tune of 20%. They are not lawyers, and do not hold an AFSL. Do watch out if they or those like them pop up in the course of your practice, in which case I’d be happy to discuss in more detail…

(These views are my own and do not constitute legal advice. These updates are not designed to be comprehensive. Photo credit Tom Wheatley)



Liam Hennessy

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