2014

The PRA and FCA have published a joint consultation paper that follows up on the proposals set out in Consultation Paper 14/14: Strengthening accountability in banking: a new regulatory framework for individuals (CP14/14).

The consultation paper sets out the PRA’s and FCA’s proposed transitional arrangements for relevant firms and individuals, the application and notification forms necessary for implementing the new senior managers and certification regimes, and consequential changes to the PRA Rulebook/Handbook and FCA Handbook.

The FSI referred to studies undertaken after natural disasters revealing inadvertent underinsurance due to consumers struggling to make an informed decision about the sum insured.  Survey results highlight that even when consumers take the time to read insurance documentation, including the product disclosure statement, many misunderstand it, scan it briefly due to over-reliance on sales …

The FSI has recommended that the competency of financial advice providers be raised and an enhanced register of advisers introduced. 

The Government is currently considering mechanisms to raise minimum education requirements for financial advisers and the FSI recommends that this be prioritised.

The FSI found that the minimum standards are currently too low which affects …

The FSI identified the need to better align the interests of financial services providers with those of consumers to ensure better consumer outcomes.

The following strategies have been recommended to address some underlying issues:

  • Raising standards of conduct and levels of professionalism: This aims to address concerns regarding organisational cultures that do not focus on

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The FSI has recommended that ASIC be granted a product intervention power to enable it to take a more proactive approach to reducing the risk of significant detriment to consumers.  Specifically, this new power would allow the regulator to intervene to require or impose:

  • amendments to marketing and disclosure material;
  • warnings to consumers, and labelling

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The FSI shares concerns raised by ASIC that consumers are buying products that do not match their needs. The existing regulatory framework relies heavily on disclosure, financial advice and financial literacy. However, disclosure can be ineffective for a number of reasons, such as complexity of documents and misaligned interests. The FSI also considers that current …

The release of the final report of the Financial Systems Inquiry (FSI) brings us a step closer to a significant shift in conduct regulation in Australia.

 As we have previously reported, Australia seems set to join a UK and European trend away from regulation driven by disclosure  towards an approach where product providers bear …

2014 was another busy year for regulatory change for the financial services sector, and it appears that this pace is set to continue in 2015. Below is a description of some of the more important changes that are already on the books and coming into effect in 2015. Of course, other changes are likely to arise as well.

The Presidency of the Council of the EU has announced that it has reached political agreement with the European Parliament on the proposed Fourth Money Laundering Directive and the proposed Regulation to amend and replace the Regulation on information on the payer accompanying transfer of funds.

The approved texts, which the Presidency has commented go…

The European Securities and Markets Authority (ESMA) has published an opinion along with advice on investment based crowdfunding.

The opinion is addressed to Member State competent authorities and is intended to provide clarity on how crowdfunding business models fit within the existing EU regulatory framework.  The advice, which is addressed to the EU institutions, highlights concerns that strong incentives currently exist for crowdfunding platforms to structure their business models to fall outside the scope of regulation and asks them to consider policy options to reduce these incentives.