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. Litigation funders (Treasury): well, that did not take long! Assistant Treasurer Stephen Jones has put himself on record, stating that the process of funder backed class action will be removed from ASIC and remitted to the Federal Court and state supreme courts. It follows Attorney-General Mark Dreyfus’ statement earlier this year said Labor would look to roll back Coalition changes made to continuous disclosure laws that made it difficult for shareholders to sue companies and directors except where there was “knowledge, recklessness or negligence”.
  2. AML / CTF (NSW Parliament): onto a slightly less controversial topic, and the NSW government will introduce laws to confiscate unexplained wealth from criminal gangs and ban the use of encrypted devices as part of reforms to combat money laundering and organised crime. The new powers allow for the confiscation of unlawfully acquired assets of major convicted drug traffickers and expand powers to stop and search for unexplained wealth. Let’s see how effective it is when combined with cryptocurrency, which is the bête noire for regulators seeking to evolve the financial services regulatory framework for the most important shift since the internet itself. You can read more in our recent update here.
  3. AML / CTF data (ACAMS): speaking at ACAMS 2nd Annual AML & Anti-Financial Crime Conference Australasia, AUSTRAC CEO Nicole Rose gave a speech which caught my eye for the following statistic: “We see it in the quantity of reporting. Over the five years to 30 June 2021, AUSTRAC has seen a 318% increase in the reporting of suspicious financial activity, and a 63% increase in International Funds Transfer Instruction (IFTI) reports received…Compliance reporting across the entire population has continued to increase in both quality and quantity, particularly in some sectors that were coming off a very low base indeed.” Ms Rose stated that current focus continues to be on casinos and gambling institutions, though emphasised the importance of governance and the role of the Board and senior management in setting and maintaining a culture of compliance in terms of oversight and management of AML/CTF obligations. She also stated that cyber capabilities and scams are increasingly being deployed to steal customer’s details and commercially sensitive information, as well as target and exploit payment systems across the financial sector, and that AUSTRAC is observing cryptocurrencies being exploited across many traditional and emerging crime types, including; terrorism financing, national security, money laundering, child exploitation and ransomware. That is one of the reasons why it is critical for crypto firms to have a very bespoke Part A in their AML / CTF programs — the risks with Web3 assets are very different (though not necessarily greater) to those in other reporting entities.
  4. Super trustees (ASIC): ASIC has released the findings from its review of superannuation trustees’ communications with their members following their first performance test under MySuper. (The performance test was introduced by the Treasury Laws Amendment (Your Future, Your Super) Act 2021 with the purpose of holding trustees to account for underperformance through greater transparency and increased consequences. The test involves an assessment of: 1) investment performance by applying an objective benchmark for each product that reflects the strategic asset allocation the trustee has set for the product. This provides a measure of whether the investment decisions of the trustee have produced performance outcomes that are higher or lower than would have been achieved by investing passively in each asset class; and 2) administration fees, by assessing the fee charged in the last financial year relative to the median fee charged for the category of product.) ASIC’s REP 729 identifies communication strategies of concern including, for example: publishing the MySuper product’s failure of the test on a webpage less likely to be visited by persons interested in the product; highlighting other performance measures that were more favourable, such as recent positive past performance figures; or criticising aspects of the MySuper test to suggest it was not relevant to the particular product.
  5. CCIVS (ASIC): ASIC has released a range of documents to support the licensing and other requirements for corporate collective investment vehicles (CCIVs). Legislation introduced earlier in the year establishes the CCIV, a new type of company limited by shares and specifically designed for use in funds management. The CCIV promises to act as a direct competitor to the classic managed investment scheme structure — it is a big leap forward for Australia in which will come into effect in July 2022, when the CCIVs regime commences, and you can read more about it in our updated here. ASIC has also published Information Sheet 272 How to register a corporate collective investment vehicle and sub-fund (INFO 272). INFO 272 provides guidance on: CCIV and initial sub-fund registration requirements; the application process, including how ASIC will assess applications for CCIVs and initial sub-funds; CCIV Constitution and compliance plan requirements; and, the application process for registering further sub-funds. The licensing amendments are sensible in my view, and consistent with the broader licensing framework — we are starting to work on CCIVs now, and I am EXCITED to see them in the Asia-Pac market soon.

Thought for the future: the consumer data right means that at a consumer’s direction, a data holder (for example a bank) must electronically share the consumer’s data with: an accredited data recipient to which the consumer has given their consent (for example another bank, or a comparison service); or, the consumer. It was tricky enough to implement for the banks, but now it is being expanded more broader the challenges multiple. Like for general and life insurers, whos products are apples and oranges in terms of coverage, exclusions and the like. Read more here!



Liam Hennessy

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