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.
- Advice update (ASIC): ASIC has released a consultation paper setting out its proposals to update Regulatory Guide 263 Financial Services and Credit Panel (RG 263) to reflect legislative changes in the Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Act 2021. In December 2020, the Government announced that it would expand the operation of the FSCP to give effect to Recommendation 2.10, which called for a single, central disciplinary body to be established for financial advisers. The Better Advice Act gives effect to this recommendation by giving the FSCP its own legislative functions and powers. These functions and powers enable the FSCP to address a range of circumstances and misconduct, including less serious misconduct, by financial advisers. The CP set out the types of matters to be referred to a sitting panel, appeals to decisions and process questions. A sensible move in my opinion-ASIC needs to rely more on industry experience where appropriate / feasible-it is open for submissions until 28 March 2022.
- Digital platforms (ACCC): the ACCC will consider whether there is a need for a new regulatory framework to address the competition and consumer concerns identified in digital platform services markets to date. The ACCC released a discussion paper to seek stakeholder views on: whether there is a need for new regulatory tools to address competition and consumer issues in relation to the supply of digital platform services; and, if reform is needed, options for regulatory reform. The discussion paper includes a list of specific questions for stakeholders about these options which are due 1 April 2022. For example, “Do you consider that the CCA and ACL are sufficient to address competition and consumer harms arising from digital platform services in Australia, or do you consider regulatory reform is required?” With such a broad scope, this is one of the bigger consultations happening at the moment!
- Climate risk survey (APRA): the prudential regulator has released a cross-industry letter to advise on the purpose and timing of a voluntary climate risk self-assessment survey with medium-to-large APRA-regulated entities. The survey is intended to improve both APRA’s and industry’s understanding of the approaches being taken by APRA-regulated entities to identify, assess and manage climate-related financial risks. In particular, the survey is designed to gather insights on how entities are managing these risks, using APRA’s Prudential Practice Guide CPG 229 Climate Change Financial Risks which it released late last year.
- Cyber risk (ACSC): Australian Cyber Security Centre has released an unusual warning, encouraging Australian firms to urgently adopt an enhanced cyber security position. It states that: ‘Organisations should act now and follow ACSC’s advice to improve their cyber security resilience in light of the heightened threat environment… Following the attack of Ukraine, there is heightened cyber risk globally, and the threat of cyber attacks on Australian networks, either directly or inadvertently, has increased. While the ACSC has no specific intelligence relating to a cyber attack on Australia, this could change quickly.’ You can read more on the website here — my top read of the week — which is very prudent in my view. In my practice, I am seeing more cyber attacks on financial institutions and OAIC are watching…
- Short term credit (ASIC): ASIC has extended Class Order [CO 14/41] for a further two-year period to 1 April 2024. The class order relieves credit providers and lessors from the obligation to provide written notice to consumers about hardship contract variations of 90 days or less. The relief was due to expire on 1 March 2022 and has been extended by ASIC Credit (Amendment) Instrument 2022/81.
Thought for the future: enhanced breach reporting. It is just not achieving the objectives it was created for in my view, and instead increasing the burden on financial services institutions unnecessarily. We have (with Lawcadia), for that reason, commissioned independent research from CoreData to examine the framework and the impact on the industry — it may help in rolling back some of the more onerous provisions. Please get in touch if you wish to participate — naturally all answers are confidential, and it will take 5 mins.