Authors: Ray Giblett, James Morris, Rajaee Rouhani, Stephen Lee, Jeremy Moller, Charles Nugent-Young, Merren Taylor, Timothy Chan, Joshua Kan, Dylan Sault and Steven Li 

Welcome to our first wrap up of the year! We are looking forward to sharing more updates with you this year.

November 2023

The month of November saw many new developments in the financial services regulatory landscape. Significantly, the industry saw the introduction of the new Unfair Contract Terms regime which broadened the scope of contracts protected and introduced harsher penalties for breaches. APRA was also active in November, releasing quarterly reports on statistics on superannuation products and private health insurance, and publishing a number of amendments and proposed amendments to prudential standards, reporting standards and FAQs.

Meanwhile, Treasury commenced several significant consultations, inviting submissions on draft legislation delivering the first tranche of the Delivering Better Financial Outcomes package of reforms, and proposed amendments to the continuous disclosure regime. It also confirmed Australia’s commitment to transporting the Crypto-Asset Reporting Framework into domestic legislative frameworks, flagged potential changes to the regulation of the use of genetic testing in life insurance underwriting, and published Australia’s new Sustainable Finance Strategy.

AUSTRAC unveiled a new one-stop shop for its guidance updates and published additional guidance on data breaches and the sexual exploitation of children. AUSTRAC also published its operational response to the Israel/Gaza conflict, recent collaboration to combat virtual kidnappings, and participation in an AFP podcast. Following the Financial Action Task Force’s update on high risk and increased monitoring jurisdictions, AUSTRAC published a reminder for reporting entities to update their risk assessments and compliance programs. AUSTRAC also co-hosted a Pacific Financial Intelligence Community meeting and provided the Cook Islands Financial Intelligence Unit with a new TAIPAN data analytics system. An external auditor’s confirmed AUSTRAC’s concerns regarding Gold Corporation’s non-compliance with its anti-money laundering obligations. Following this report, Gold Corporation gave an enforceable undertaking to complete its remediation program by April 2025 under enhanced oversight from AUSTRAC and an independent third-party expert.

December 2023 to January 2024

December 2023 to January 2024 was predictably quieter for the financial services sector, though not without a handful of significant developments. ASIC and APRA signed a memorandum of understanding setting out how the regulators will continue to work together to regulate the Australian financial services system. ASIC updated several legislative instruments, including extending relief from disclosure and reporting consistency obligations for super trustees.

APRA released its supervision and policy priorities for the first six months of 2024. The regulator aimed to promote operational and cyber resilience across all regulated entities, improve the prudential framework for authorised deposit-taking institutions, lift superannuation trustees’ practices on retirement incomes, and continue its efforts to balance financial sustainability with the need to enhance affordability and availability across the insurance industry.

Meanwhile, Treasury commenced a number of significant consultations during the holiday period, seeking public feedback on how to improve the retirement phase of superannuation, and releasing a consultation paper on a proposed licensing framework for payment services providers. It also published exposure draft legislation directed to delivering the Government’s promise to implement the financial market infrastructure reform package, and separate exposure draft legislation to introduce mandatory requirements for large businesses and financial institutions to disclose climate-related risks and opportunities.

AUSTRAC announced its 2024 regulatory priorities, welcomed Brendan Thomas as the new CEO, reflected on its 2023 international activities and advertised its 2024 RegTech Symposium. It also issued warnings to businesses to submit their 2023 compliance report, to enrol with AUSTRAC if they provide designated services, and to be cautious about scammers attempting to impersonate AUSTRAC officials. AUSTRAC also published two articles illustrating how suspicious matter reports (SMRs) are used to assist law enforcement to detect and disrupt the abuse of Australia’s financial system.

1             ASIC’s new website takedown capability knocks out over 2,500 investment scam and phishing websites

On 2 November 2023, ASIC outlined details of a new investment scam takedown capability that initiates takedowns of investment scams and phishing websites.

ASIC reported that since July 2023, it had taken down 2,100 sites with more than 400 additional sites in the process of being taken down. The disrupted websites include fake investment platforms, crypto-asset scam websites, and imposter scam websites where legitimate financial services businesses are impersonated.

An ASIC spokesperson said if you are unsure whether you are dealing with the legitimate business, contact the business by using their publicly listed phone number. It further encouraged people to report suspected investment scams to scamwatch.gov.au.

More information on ASIC’s investment scam website takedown capability can be accessed here. The full media release can be accessed here.

2             ASIC proposes temporarily extended relief from disclosure and reporting consistency obligations for super trustees

On 6 November 2023, ASIC commenced consultation on a proposed extension of the exemption from the consistency obligations in ASIC Class Order CO 14/541(CO 14/541)for two years.

Section 29QC of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) requires that information given to the public (for example, in disclosure documents) be calculated in the same way that the information is reported to APRA under an APRA reporting standard. CO 14/541 provides relief from this obligation.

ASIC granted the exemption in CO 14/541 due to uncertainty about how to achieve the disclosure requirements in subsection 29QC(1) of the SIS Act. The relief has been in place in some form since 1 July 2013.

The full media release can be accessed here.

3             ASIC takes civil penalty action against Telstra Super in Australian-first case

On 6 November 2023, ASIC commenced the first civil penalty proceedings under the internal dispute resolution regime, which makes the standards and requirements set out in ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98 (Instrument 2020/98) and highlighted in ASIC’s Regulatory Guide for Internal Dispute Resolution (RG 271) enforceable. The regime came into effect on 5 October 2021.

ASIC has alleged that between 22 October 2021 and 13 January 2023, 40% of Telstra Super’s responses to the 337 superannuation complaints it received did not comply with Telstra Super’s own dispute resolution requirements. The alleged conduct includes failures to respond to complainants within specified timeframes, provide reasons for delays, and inform complainants about their right to take their complaint to AFCA.

ASIC has further alleged that Telstra Super failed to operate efficiently, honestly and fairly when it failed to comply with its own procedures, sent delay notifications to complainants without justification, and did not have adequate resources to comply with its internal dispute resolution procedures.

ASIC Deputy Chair, Sarah Court, said ASIC expects the financial services industry to have effective dispute resolution procedures in place and to have the systems and resourcing necessary to put those dispute resolution procedures into practice.

The proceedings have been listed for case management on 7 December 2023.

The Originating Process can be accessed here. The Concise Statement can be accessed here. The full media release can be accessed here.

4             ASIC publishes new article on greenwashing 

On 7 November 2023, ASIC reiterated that greenwashing remains an enforcement priority in its new article, Red light for greenwashing. ASIC has identified greenwashing as one of its 2023 enforcement priorities following an influx of sustainability-related products into financial markets.

            The article provides an overview of recent ASIC enforcement action in response to concerns of greenwashing misconduct, ranging from warning letters, infringement notices and undertakings to civil penalty proceedings in the Federal Court of Australia.

ASIC has cautioned that future cases may move beyond misleading and deceptive conduct to licence obligations, directors and officers duties and a range of other obligations. ASIC said future areas of interest are likely to include net zero statements and targets, use of terms such as “carbon neutral”, “clean” or “green”, and the scope and application of investment exclusions and screens.

ASIC’s regulatory guidance on how to avoid greenwashing can be accessed here. The full media release can be accessed here.

5             ASIC releases new alert list highlighting suspicious investment opportunities

On 8 November 2023, ASIC released a new investor alert list to help consumers inform themselves as to whether an entity that are considering investing in could be fraudulent, a scam or unlicensed. The new list has replaced the previous “companies you should not deal with” list and includes domestic and international entities potentially operating in Australia without appropriate licenses, exemptions, authorisations or permissions.

ASIC’s publication of the investor alert list has coincided with an update to its investor checklist, which provides consumers with important information on what steps they can take before investing. At launch, the investor alert list includes 52 unlicensed entities and 25 websites impersonating legitimate entities.

The investor alert list can be accessed here. The investor checklist can be accessed here. The full media release can be accessed here.

6             Unfair Contract Terms reforms commence, ASIC publishes updated guidance materials

On 9 November 2023, the new unfair contract terms (UCT) regime, introduced by the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth), came into effect. The reforms to the UCT regime under the Australian Consumer Law, found in Schedule 2 of the Competition and Consumer Act 2010 (Cth), and the ASIC Act 2001 (Cth), make UCTs illegal and introduce substantial penalties for their use, with each UCT constituting a separate contravention of the applicable legislation.

In summary, the key reforms to the UCT regime include:

  • the introduction of a civil penalty regime prohibiting the use of, and reliance on, UCTs;
  • expansion of the protections under the UCT regime to more “small business contracts”;
  • clarification on the meaning of “standard form contract”;
  • clarification on the court’s powers to remedy breaches of the UCT regime;
  • clarification on contractual terms excluded from the UCT regime; and
  • new categories of contracts excluded from the UCT regime. 

To assist industry and consumers understand the reforms, ASIC has updated its existing UCT guidance materials:

  • INFO 210: Unfair contract term protections for consumers
  • INFO 211: Unfair contract term protections for small businesses
  • INFO 105: FAQs: Dealing with consumers and credit 

The full media release can be accessed here. See our recent article on how the new UCT regime applies to insurance contracts here.

Note: On 2 February 2024, ASIC provided a limited class no-action letter, informing industry that it does not intend to take action for certain contraventions under the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) in relation to the UCT regime. ASIC has made clear that that this does not prevent third parties, including the Director of Public Prosecutions, from taking legal action in relation to the conduct referred to in the letter. We will discuss this in further detail in our February 2024 edition of the FS Monthly Wrap-Up.

ASIC’s letter can be accessed here. The full media release can be accessed here.

7             ASIC targets misconduct in superannuation sector

On 15 November 2023, ASIC signalled its intention to commence targeted enforcement action in the superannuation sector as part of its focus on member outcomes.

The enforcement focus, which ASIC says will commence in the coming months and into 2024, follows ASIC’s recent enforcement and regulatory report for the July to September quarter. The report highlighted ASIC’s recent consumer protection achievements, which included calling on banks to ensure better outcomes for consumers, and the commencement and finalisation of various civil penalty actions.

ASIC’s enforcement and regulatory update for July to September 2023 can be accessed here. The full media release can be accessed here.   

8             ASIC consults on ABA’s proposed changes to the banking code of practice

On 17 November 2023, ASIC opened its consultation on the Australian Banking Association’s (ABA) proposed changes to its code of practice (Code). The Code contains contractually enforceable standards that subscribing banks must uphold. The consultation will inform ASIC’s decision on whether to approve the proposed updates to the Code.

ASIC has sought feedback on the following key issues:

  • whether the proposed Code imposes obligations on subscribers that are beyond those required by the law and, in doing so, addresses key potential consumer harms;
  • whether the proposed Code provides for effective administrative systems for monitoring compliance and whether the obligations are capable of being enforced;
  • whether any Code review recommendations that the ABA has not supported should be included in the proposed Code;
  • whether the recommendations accepted by the ABA are appropriately reflected in the proposed Code and proposed Charter;
  • whether the proposed Code strikes an appropriate balance between simplifying the Code and minimising regulatory duplication on the one hand, and promoting consumer awareness of protections applicable to their banking relationship on the other; and
  • the role of industry guidelines.

The consultation paper can be accessed here. The full media release can be accessed here.

9             ASIC announces 2024 enforcement priorities

On 21 November 2023, ASIC announced its enforcement priorities for 2024. ASIC Deputy Chair Sarah Court said ASIC’s goal was to create a culture of compliance across the financial system and corporate sector through decisive and high-profile enforcement action. 

Two new priorities have been included for the superannuation industry, including a focus on member services failures and misconduct relating to the erosion of superannuation balances. New priorities have also been added in relation to insurance claims handling, compliance with financial hardship obligations and the reportable situations regime, and technology and operational resilience for market operators and participants.

Existing priorities relating to greenwashing and the enforcement of design and distribution obligations have been retained, while ASIC’s focus on governance and directors’ duties has been added as an enduring priority.

The enforcement priorities for 2024 can be accessed here. The full media release can be accessed here.

10          ASIC publishes highlights from the ASIC Annual Forum 2023

From 21 to 22 November 2023, ASIC hosted the 2023 ASIC Annual Forum, which brings together through leaders and experts to explore strategies for adapting and evolving in a time of geopolitical, economic and technological change. The theme for the 26th edition of the ASIC Annual Forum was “Navigating Disruption”.

ASIC has to date published the following highlights from the 2023 Annual Forum:

  • Keynote opening address by ASIC Chair Joe Longo, which includes ASIC’s focus areas for 2024;
  • Enforcement by ASIC Deputy Chair Sarah Court, which includes updates on ASIC’s performance against the 2023 enforcement principles;
  • Impact of artificial intelligence on financial services, which includes a discussion on the opportunities and risks for Australian financial systems;
  • Responding to climate disruption, which follows an information session on the impacts of the net-zero economy on Australian businesses and includes discussion on a proposed new climate-related reporting regime;
  • Hardship and vulnerable consumers, which includes information on how credit providers can response to customers experiencing financial distress;
  • Regulator perspectives, which includes updates on how Australia’s financial services and consumer protection regulators are navigating constant change and disruption, including through the use of technology and automation;
  • How digital innovation is transforming financial markets, which follows an information session on the pace of technological change in global financial markets;
  • Disruption by natural disasters, which discusses the impact of increased natural disasters on insurers and their customers and identifies three areas of improvement across the insurance sector needed to ensure good consumer outcomes;
  • Retirement income covenant, which follows an information session on the impact of the retirement income covenant on the superannuation industry after its implementation in July 2022.

11          ASIC consults on remaking class order on Exchange Traded Funds

On 24 November 2023, ASIC released a consultation paper on proposed amendments to ASIC Class Order [CO 13/721] ([CO 13/721]).

[CO 13/721], which is due to expire (“sunset”) on 1 April 2024, provides equal treatment relief for responsible entities and corporate directors (issuers), ongoing relief disclosure, relevant interest relief, and substantial holding and beneficial trading relief for issuers.

ASIC plans to continue the relief currently provided in [CO 13/721] with a view to expanding the relief to a broader class of ETFs, including all types of quoted managed investment schemes and sub-funds of a corporate collective investment vehicle, but excluding funds that employ internal market making.

The consultation paper can be accessed here. The full media release can be accessed here.

12          ASIC releases guidance on the registration of financial advisers

On 28 November 2023, ASIC released two new information sheets providing guidance to financial advisers and Australian financial services licensees about the new registration requirements for financial advisers. The release follows the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 (Cth) which received royal assent on 27 November 2023.

From 1 February 2024, financial advisers who provide personal advice to retail clients on relevant financial products (Relevant Providers) must be registered with ASIC. ASIC has warned those that continue to provide such advice unregistered will be breaking the law.  

ASIC’s new information sheets are:

  • Information Sheets 276 FAQs: Registration of Relevant Providers (INFO 276) provides guidance on the registration requirement and process, registrations ceasing and multiple registrations.
  • Information Sheet 277 Registration of Relevant Providers: Guidance on Making Declarations (INFO 277) provides guidance about the declarations AFL licensees are required to make when applying to register their Relevant Providers.

The full media release can be accessed here.

13          ASIC and AFCA sign memorandum of understanding

On 1 December 2023, ASIC and AFCA signed a memorandum of understanding (MOU) setting out how they will continue to work together to support a fair and efficient financial services sector in Australia.

While the MOU is not intended to create legally binding obligations, it sets out how the regulators will continue to engage with one another, which includes information sharing and other forms of coordination and cooperation. The MOU also reflects ASIC and APRA’s intention to maintain an open and collaborative relationship to perform their respective functions and governs the administrative arrangements between them.

The MOU can be accessed here. The full media release can be accessed here.

14          ASIC intervenes to protect retail investors from high-risk offers and business practices

On 6 December 2023, ASIC announced it had intervened to protect new retail investors by disrupting potentially harmful offers of financial products and services by online trading providers. The announcement follows the release of REP 778 Review of online trading providers (Report) which highlighted ASIC’s observations from its surveillance operations, regulatory expectations and recent interventions.

The Report identifies numerous regulatory interventions, including court actions, stop orders and infringement notices, in relation to high-risk offers, inadequate supervision of representatives, misleading or deceptive statements, use of digital engagement practices (e.g. gamification and influencer marketing) and holding client assets and money.  

The Report follows ASIC’s warning to online trading providers in August 2022 against high-risk offerings to retail investors, including securities lending and crypto-asset trading. ASIC has encouraged online trading providers to consider their practices and how the observations and areas for improvement outlined in the Report may apply to their business.

The Report can be accessed here. The full media release can be accessed here.

15          ASIC temporarily extends relief from disclosure and reporting consistency obligations for super trustees

On 21 December 2023, ASIC released the Superannuation (Disclosure and Reporting Consistency Obligations) Instrument 2023/941, which continues the relief previously provided under ASIC Class Order [CO 14/541] which is due to expire on 1 January 2024.

Instrument 2023/041 provides an exemption to RSE licensees from complying with the disclosure and reporting consistency obligations under section 29QC(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) for a further two years.

ASIC granted the exemption in [CO 14/541] due to uncertainty around how to achieve the disclosure requirements in section 29QC(1) of the SIS Act. This provision makes reference to consistency with the data that must be reported under APRA’s reporting standards.

In light of APRA’s evolving reporting standards as part of the superannuation data transformation project, and following a consultation ending on 4 December 2023, ASIC determined the exemption in [CO 14/541] is operating effectively and efficiently, and continues to form a necessary part of the legislative framework.

The full media release can accessed here.

16          ASIC extends product intervention orders for short term credit and continuing credit contracts

On 5 January 2023, ASIC extended its product intervention orders made in relation to short term credit and continuing credit contracts until such time as they are revoked or they sunset on 1 October 2032. The orders are contained in the following ASIC instruments:

ASIC found the target market for these types of contracts includes vulnerable retail clients in financial distress who required loans for basic living expenses (many of whom had been declined regulated credit) and were charged significant fees in relation to these loans.

ASIC announced that the extension of the product intervention orders will provide ongoing protection against these high-cost lending products. ASIC also reemphasised that predatory lending practices targeting vulnerable customers is an ongoing priority for ASIC.

The full media release can be accessed here.

17          ASIC urges AFS licensees to register their financial advisers and provides a short extension to facilitate compliance

On 18 January 2023, ASIC announced that 26% of financial advisers who provide personal advice to retail clients on relevant products (relevant providers) were not registered with ASIC, despite a registration requirement commencing on 1 February 2024.

As the period for registration coincided with the summer holiday period, ASIC has passed ASIC Corporations (Amendment) Instrument 2024/23, to extend the registration period until 16 February 2024. From 16 February 2024, all relevant providers, including time-share advisers, must be registered. ASIC has said that no further extensions will be provided.

ASIC has reiterated that relevant providers will be in breach of a restricted civil penalty provision if they give personal advice while unregistered. The relevant provider’s authorising AFS licensee(s) will have also committed an offence of strict liability and contravened a civil penalty provision.

The full media release can be accessed here.

18          ASIC proposes to remake managed investment scheme legislative instruments

On 19 January 2023, ASIC began consultation on its proposal to remake the following class orders on managed investment schemes that are due to sunset on 1 April 2024:

ASIC proposes to remake the class orders for a period of five years, having assessed that they are operating effectively and efficiently and continue to form a necessary and useful part of the legislative framework. The consultation ends at 5pm on 16 February 2024.

The full media release can be accessed here.

19          Westpac to pay maximum penalty for unconscionable conduct for interest rate swap

On 31 January 2024, the Federal Court of Australia declared Westpac Banking Corporation (Westpac) engaged in unconscionable conduct during the execution of a $12 billion interest rate swap transaction, awarding a maximum penalty of $1.8 million.

The unconscionable conduct arose when Westpac engaged in pre-hedging ahead of an interest rate swap transaction.

The full media release, which includes the background to the case and a link to the agreed statement of facts, can be accessed here.

20          APRA releases minor amendments to standard on audit and related matters for life insurers

On 8 November 2023, APRA published an updated Prudential Standard LPS 310 Audit and Related Matters (LPS 310) to correct a minor error in Attachment A of LPS 310.

The error relates to the level of assurance required for two reporting standards: Statement of Policy Liabilities (LRS 400) and Assets Backing Policy Liabilities (LRS 420). The updated LPS 310 will be effective from 18 December 2023 and returns the level of audit assurance for LRS 400 and LRS 420 to the level required prior to 1 July 2023, being none.

The marked up LRS 310 can be accessed here. The letter to life insurers can be accessed here. The full media release can be accessed here.

21          APRA consults on proposed changes to liquidity and capital requirements

On 15 November 2023, APRA released for consultation proposed changes to liquidity and capital requirements directed to strengthening the banking sector’s resilience to future stress. The proposed amendments relate to how banks manage their liquidity, particularly banks that are subject to the Minimum Liquidity Holdings (MLH) regime, and reflect lessons learned from bank crisis events in the United States and Europe throughout 2023.

The proposed changes will be reflected in the following standards and guidance:

  • Prudential Standard APS 210 Liquidity;
  • Prudential Practice Guide APG 210 Liquidity; and
  • Prudential Standard APS 111 Capital Adequacy: Measurement of Capital.

The letter to industry, draft prudential standards and draft guidance can be accessed here. The full media release can be accessed here.

22          APRA publishes quarterly superannuation product statistics

On 21 November 2023, APRA published its Quarterly Superannuation Product Statistics publication for the quarter ending June 2023.

The publication lists all superannuation products offered by each APRA-regulated superannuation fund and the investment menus and investment options available through these products. It also includes information on fees and costs, investment performance, investment strategy and asset allocation for a range of products and investment options, including in relation to trustee directed products available through platforms.

The full media release can be accessed here.        

23          APRA publishes quarterly private health insurance statistics

On 22 November 2023, APRA published is quarterly private health insurance statistics for the quarter ending September 2023. The publication contains statistics on membership, coverage, benefits paid, medical gap, prostheses and medical services only.

The publication can be accessed here. The full media release can be accessed here.

24          APRA responds to consultation on amendments to private health insurance reporting standards

On 22 November 2023, APRA released a letter responding to consultation on its proposed amendments to three private health insurance (PHI) reporting standards. The updates follow an earlier consultation in August 2023 and aim to align the terminology used in the PHI reporting standards with the terminology used in recent and upcoming changes to the PHI legislation. The updated reporting standards are:

·         Reporting Standard HRS 601.0 Statistical Data by State;

·         Reporting Standard HRS 603.0 Statistical Data on Prosthetic Benefits; and

·         Reporting Standard HRS 605.0 Private Health Insurance Reform Data Collection.

The updated reporting standards will apply to all reporting periods ending on or after 31 March 2024. The current reporting standards will continue to apply to all reporting periods prior to the commencement of the updated reporting standards.

APRA’s response letter and the updated reporting standards can be accessed here. The full media release can be accessed here.

25          APRA publishes updates to FAQs on Superannuation Data Transformation project

On 24 November 2023, APRA published two new frequently asked questions (FAQs) and two updated worked examples for the Superannuation Data Transformation project.

The new FAQs (SRS 550.0aa and SRS 550.0 ab) and updated worked examples relate to reporting expenses under SRS 332.0 Expenses and SRS 550.0 Asset Allocation.

The new FAQs and updated worked examples can be accessed here.

26          APRA consults on new cross-industry standard to centralise existing standards on definitions for ADIs and insurers

On 27 November 2023, APRA released for consultation a new cross-industry standard which aims to centralise APRA’s existing standards on definitions for authorised deposit-taking institutions and general, life and private health insurers.

The proposed new Prudential Standard CPS 001 Defined terms (CPS 001) is part of APRA’s strategic initiative to Modernise the Prudential Architecture. CPS 001 does not introduce any new defined terms but simply aims to remove terms that are no longer in use, address duplication and consolidate APRA’s five existing definitions standards into a single consolidated standard.

The letter to industry and proposed new CPS 001 can be accessed here.

27          APRA releases new insights on superannuation performance

On 29 November 2023, APRA published new data on superannuation product performance, drawing upon the annual superannuation performance test data to analyse fees and investment returns across MySuper and trustee directed products (TDPs).

The data shows:

  • significant variance in the administration fees paid by members within each product segment, indicating scope for industry-wide fee reductions, particularly for TDPs;
  • TDPs offered through platforms generally have the highest fees;
  • larger funds tend to charge lower administration fees, which reinforces the efficiency and cost-savings benefits of scale that exist in superannuation;
  • while most MySuper products and non-platform TDPs are outperforming the investment component of the performance test, more than half of all platform TDPs are failing to meet the benchmark.

APRA has also published each product’s numerical results for the year’s performance test, showing had[NRFA1]  product performed relative to the tailored benchmarks beyond the “pass” and “fail” results announced in August.

The superannuation performance test results can be accessed here. The full media release can be accessed here.

28          APRA maintains current macroprudential policy settings

On 4 December 2023, APRA published its annual update on macroprudential policy and confirmed that existing policy settings were appropriate and would remain in place.

As a result of APRA’s decision:

  • the countercyclical capital buffer will remain at 1.0 per cent of risk weighted assets to ensure that banks have an additional capital buffer for stress situations;
  • the mortgage serviceability buffer will be kept at 3 percentage points to maintain prudent lending standards; and
  • capital distribution or lending limits were not applied given the improvement in new loan quality and the current composition of credit in the economy.

APRA noted that while its current macroprudential settings remained appropriate, they are dynamic and can be adjusted to address emerging risks as and when they arise.

APRA’s update on macroprudential standards for December 2023 can be accessed here. The full media release can be accessed here.

29          APRA releases findings of survey on life insurance in superannuation

On 7 December 2023, APRA published its findings from its 2022 survey on the sustainability of group life insurance in superannuation. The survey focused on the actions being taken by a sample of registrable superannuation entity (RSE) licensees, life insurers and reinsurers to address three areas of concern: premium volatility, availability and provision of data, and tender prices.

In relation to each of the priority areas, the survey found:

  • premium volatility is still evident, partly due to recent legislative changes impacting participation in group insurance arrangements and uncertainty from the pandemic;
  • there has been minimal progress in relation to the availability and provision of data and RSEs continue to face difficulties in obtaining member data from employers; and
  • improvement in tender practices with responses indicating that the time provided for insurers and reinsurers to engage in tenders was, in most instances, adequate.

The letter to industry provides a high-level overview of the key findings, including various “better practices” in relation to each of the focus areas.

The letter to industry can be accessed here. The full media release can be accessed here.

30          APRA releases update on the revocation of superannuation reporting standards

On 8 December 2023, APRA released an update to all registrable superannuation entity (RSE) licensees on the revocation of superannuation reporting standards as part of its commitment to reduce duplicate reporting and reporting burden.

The updates include the revocation of:

  • Reporting Standard SRS 530.0 Investments and Reporting Standard (SRF 530.0);
  • Reporting Standard SRS 702.0 Investment Performance (SRS 702.0);
  • Reporting Standard SRS 410.0 Accrued Default Amounts (SRS 410.0); and
  • Reporting Standard SRS 530.1 Investments and Investment Flows (SRS 530.1).

In addition, from the period ending 31 December 2032, RSE licensees are exempted from reporting under Reporting Standard SRS 533.0 Asset Allocation (SRS 533.0) in respect of MySuper products with a single diversified investment strategy. APRA has also updated its FAQ’s, amending FAQ 1.25, and adding a new FAQ 332.0 v on Report Standard SRS 332.0 Expenses (SRS 332.0), together with a revised SRS 332.0 worked example.

The letter to industry can be accessed here. The updated FAQs can be accessed here. The full media release can be accessed here.

31          APRA reinforces requirements for banks to manage interest rate risk

On 12 December 2023, APRA released updated requirements in Prudential Standard APS 117 Interest Rate Risk in the Banking book (IRRBB) (APS 117) for banks to better manage the impact of interest rate change on their financial position. The changes are aimed at:

  • reducing some of the volatility in the IRRBB capital charge;
  • creating better incentives for banks to manage their IRRBB risk, including raising standards of governance and measurement of risk; and
  • simplifying and removing complexities in the IRRBB framework.

APRA is now commencing a short consultation on aspects of APS 117 that relate to small banks, with a view to finalising APS 117 by the middle of 2024, ahead of the updated standard coming into effect from 1 October 2025. It is also consulting on a prudential practice guide and reporting standards and guidance to accompany the updated APS 117.

The full media release can be accessed here.

32          APRA and ASIC release an update on premium increases in the life insurance industry

On 14 December 2023, ASIC and APRA released a joint letter to life insurers and friendly societies (life companies) outlining their observations from a joint review of life companies’ past practices. The letter, which follows concerns raised by ASIC and APRA in December 2022, identifies regulatory expectations and industry focus areas in relation to future premium increases, disclosure and marketing materials, and product design.

The regulators have confirmed their expectations of life companies, including to:

  • have sound risk management and compliance assurance around re-rating practices and ensure any contract terms allowing for premium increases are transparent and not unfair;
  • clearly explain how premiums are calculated and may change over the life of the policy; and
  • design and price life insurance products factoring in consumers’ need for premium stability.

ASIC and APRA have warned that they will monitor the progress of life companies in meeting regulatory, consumer and community expectations of pricing decisions, marketing and disclosure, as well as product design to deliver better consumer outcomes. The regulators have also flagged appropriate regulatory action if their expectations are not met.

The letter to industry can be accessed here. The full media release can be accessed here.

33          APRA retires prudential practice guides on the risk management framework for life and general insurance

On 15 January 2024, APRA announced in a letter to industry it had retired two Prudential Practice Guides on the risk management framework for general and life insurers:

  • Prudential Practice Guide GPG 250 Balance Sheet and Market Risk (GPG 250); and
  • Prudential Practice Guide LPG 250 Asset and Liability Management Risk (LPG 250).

The decision to retire GPG 250 and LPG 250 is part of APRA’s strategic initiative to modernise the prudential architecture, which includes removing out-of-date guidance.

APRA announced that the risks considered in GPG 250 and LPG 250 are sufficiently addressed by the requirements in Prudential Standard CPS 220 Risk Management, supported by Prudential Practice Guide CPG 220 Risk Management.

The letter to industry can be accessed here. The full media release can be accessed here.

34          APRA releases consultation on amendments to the superannuation prudential framework

On 17 January 2024, APRA released for consultation proposed minor and consequential amendments to the superannuation prudential framework. The consultation follows recent legislative reforms to the financial reporting and auditing requirements for superannuation set out in the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 (Cth).

APRA proposes to update the following standards and guidance:

In addition to these changes, APRA also proposes to remove the requirement for an RSE auditor to use an APRA approved form as required in SPS 310 and retire Prudential Practice Guide SPG 310 Audit and Related Matters (SPG 310) because the minor and consequential amendments remove the substantive content of this guidance.

The consultation letter and draft prudential standards can be accessed here. The full media release can be accessed here.

35          APRA releases annual superannuation bulletin for 2022/23 financial year and quarterly superannuation statistics

On 31 January 2024, APRA released its Annual Superannuation Bulletin for the end of the 2023 calendar year and the Quarterly Superannuation Industry publication for the quarter ending September 2023.

The Annual Superannuation Bulletin provides an overview of the superannuation industry and information on funds, membership profile, key financial performance metrics, financial position, fees and expenses, while the Quarterly Superannuation Industry Publication presents industry-level data on products and member demographics.

The Annual Superannuation Bulletin can be accessed here. The Quarterly Superannuation Industry publication can be accessed here. The full media release can be accessed here.

36          APRA outlines 2024 supervision and policy priorities

On 31 January 2024, APRA published in a letter to industry its supervision and policy priorities for the first half of 2024. The announcement comes as an interim update ahead of APRA’s 2024-25 Corporate Plan, which is due at the end of August 2024.

In its letter, APRA announced that it would continue to focus on protecting the safety and resilience of regulated entities, promoting confidence and stability in the financial system, and supporting the community to achieve good financial outcomes. For the six-month period ahead, APRA will prioritise:

  • operational and cyber resilience for all regulated entities, reflecting the growing reliance on digital technologies by entities and the community;
  • embedding lessons from last year’s global banking turmoil through targeted changes to the prudential framework for authorised deposit-taking institutions;
  • lifting superannuation trustees’ practices on retirement incomes, implementing recommendations from the Financial Regulator Assessment Authority (FRAA) review, enhancing transparency and aligning APRA’s heatmaps with the performance test; and
  • across insurance, continuing to balance financial sustainability with the need to enhance affordability and availability.

APRA also included in its letter a timeline of key initiatives over the next six months, as well as a table outlining the planned supervision and policy activities it will undertake during this period.

The letter to industry can be accessed here. The full media release can be accessed here.

37          AUSTRAC unveils new webpage for guidance updates

On 2November 2023, AUSTRAC published a new webpage listing the guidance it has released and updated from January 2022.

The latest guidance updates page can be accessed here. The full media release can be accessed here.

38          AUSTRAC publishes guidance on data breaches

On 2 November 2023, AUSTRAC published its data breach guidance that applies to businesses subject to a data breach or which have been impacted by an external data breach affecting their customers or services.

The guidance aims to help businesses to understand their AML/CTF obligations in the event of a data breach, protect their business and customers from heightened money laundering and terrorism financing risks that can arise from data breaches, and identify potential indicators of identity crime, fraud and cyber-enabled crime.

The data breach guidance can be accessed here. The full media release can be accessed here.

39          AUSTRAC publishes financial crime guide combating the sexual exploitation of children for financial gain

On 2 November 2023, AUSTRAC published a financial crime guide to provide businesses with information on how to identify and stop the purchase of child sexual exploitation material and emphasises the importance of reporting of suspicious activity.

The guide recognises that child sexual exploitation is increasingly being facilitated by the internet. The guide was developed in collaboration with Fintel Alliance partners, Child Sexual Exploitation Response Team, International Centre for Missing & Exploited Children, the Australian Institute of Criminology, and several government agencies.

The financial crime guide is accessible here. The full media release can be accessed here.

40          AUSTRAC’s operational response to the Israel/Gaza conflict

On 2 November 2023, AUSTRAC announced that it established its operational response to the Israel/Gaza conflict known as Operation SALEM covering suspicious matter reporting, information sharing, engagement with industry and support for targeted financial sanctions.

AUSTRAC is collaborating with the Australian Federal Police, Sanctions Office, and foreign intelligence partners. It has also provided Fintel Alliance members with guidance on how industry monitoring and reporting can assist Operation SALEM.

The full media release can be accessed here.

41          AUSTRAC collaborates with police, industry and universities to combat virtual kidnappings

On 2 November 2023, AUSTRAC warned the public about a virtual kidnapping scam increasingly impacting Chinese speaking university students. This technology-enabled scam involves scammers coercing victims to fake their own kidnapping, so that the scammer can demand a ransom from their family.

To combat the rise in virtual kidnappings, AUSTRAC, state policing agencies, industry and universities have recently increased their collaboration. To detect and disrupt virtual kidnappings, AUSTRAC has helped with the development of financial indicators and methodologies used by the scammers. Information provided by AUSTRAC to the New South Wales Police led to police conducting welfare checks on a number of potential victims, which prevented further funds from being sent to the scammers.

The full media release can be accessed here.

42          AUSTRAC participates in AFP podcast about Operation Birks

On 2 November 2023, a representative from the AUSTRAC-led Fintel Alliance participated in the Australian Federal Police’s Crime Interrupted podcast about Operation Birks. The podcast discussed how the AFP and its partners brought down a syndicate stealing millions of dollars from Australian funds and share trading accounts.

The full media release can be accessed here.

43          AUSTRAC reminds reporting entities to update risk assessments and compliance programs following FATF’s jurisdictions update

On 8 November 2023, AUSTRAC urged reporting entities to maintain awareness of countries that pose a higher risk of money laundering or terrorism financing. AUSTRAC referred to the Financial Action Task Force’s (FATF) recently updated list of High-Risk Jurisdictions and Jurisdictions under Increased Monitoring.

The full media release can be accessed here.

44          AUSTRAC co-hosts the 2nd annual PFIC meeting and provides CIFIU with new data analytics system

On 16 November 2023, AUSTRAC and the Cook Islands Financial Intelligence Unit (CIFIU) hosted the 2nd plenary of the Pacific Financial Intelligence Community (PFIC).

PFIC members signalled their collective desire to broaden their efforts to share financial intelligence and collaborate to fight financial crime through the signing of a Statement of Intent. AUSTRAC also provided CIFIU with a new TAIPAN data analytics system that will aid in the detection of money laundering and be used to combat criminal and national security threats.

Pete Soros, the Acting CEO of AUSTRAC, acknowledged that “issues like money laundering, drug and human trafficking, and corruption are not specific to any one nation and transcend international borders. This is why uplifting financial intelligence capability in Australia and across the Pacific is crucial to regional security, economic stability, and community confidence.”

The full media release can be accessed here.

45          AUSTRAC accepts enforceable undertaking from Gold Corporation

On 23 November 2023, AUSTRAC accepted an Enforceable Undertaking from Gold Corporation to uplift its compliance with AML/CTF laws. The undertaking follows an external auditor’s report on Gold Corporation’s non-compliance with its anti-money laundering obligations. The undertaking requires Gold Corporation to complete its remediation program by April 2025 under enhanced oversight from AUSTRAC and an independent third-party expert.

The full media release can be accessed here.

46          AUSTRAC announces its 2024 regulatory priorities

On 13 December 2023, AUSTRAC announced its regulatory priorities for 2024.

Building on its commitment to strengthening Australia’s financial system against money laundering and terrorism financing, AUSTRAC is intensifying its focus on specific sectors deemed to be at higher risk. These include established high-risk areas like banking and gambling, but also emerging sectors like digital currency exchanges, payment platforms, bullion dealers, and non-bank lenders. Businesses within these sectors can expect greater scrutiny, particularly regarding board oversight, transaction monitoring, and outsourcing arrangements.

AUSTRAC has committed to promptly addressing emerging issues and serious non-compliance, promising swift intervention through increased monitoring, assessments, and, if necessary, enforcement action.

The full media release can be accessed here.

47          AUSTRAC welcomes Brendan Thomas as the new CEO

On 18 December 2023, the Commonwealth Attorney-General announced that Mr Brendan Thomas was appointed as AUSTRAC’s Chief Executive Officer for 5 years beginning 29 January 2024. AUSTRAC welcomed Mr Thomas’s experience leading, designing and delivering major public services and in leading organisational reform.

The full media release can be accessed here.

48          AUSTRAC reflects on its 2023 international activities

On 18 December 2023, AUSTRAC published a wrap up of its international activities for 2023. AUSTRAC’s work with regional and global partners is aimed at combatting money laundering and terrorism financing on a global level.

AUSTRAC’s key international efforts included:

  • supporting Pacific Financial Intelligence Units (FIU) through specialist financial intelligence training and the roll-out of new IT systems
  • providing technical assistance and training, and improving intelligence collaboration with Southeast Asian FIUs
  • supporting the Financial Intelligence Consultative Group’s work plan and rollout of a regional information sharing platform; and
  • supporting the 2023 AML/CTF Hackathon event led by FICG co-chair Malaysia to develop solutions together with public and private sectors to combat financial crime.

The full media release can be accessed here.

49          AUSTRAC explains how SMRs are used to detect and disrupt the abuse of Australia’s financial system and publishes a case study on misuse of payment text fields

On 18 December 2023, AUSTRAC published two articles to illustrate how suspicious matter reports (SMRs) are used to assist law enforcement. The reports detail how AUSTRAC’s intelligence analysts use SMRs to produce intelligence reports that are shared with AUSTRAC’s law enforcement partners, who go on to investigate and arrest people abusing Australia’s financial system.

AUSTRAC also published a case study on preventing financial transaction payment text fields from being used to harass victims. The Fintel Alliance payment reference project, which produced a financial crime guide, helped businesses to submit suspicious matter reports (SMRs) identifying the misuse of payment text fields. These SMRs have helped police agencies protect victims of domestic violence, a result that was featured in the Australian Public Service Commission’s State of the Service Report 2022-23.

Intelligence from financial institutions has also contributed to enhanced monitoring of text fields including providing safety reporting options for victims, blocking payments that contained explicit or threatening language, and developing machine learning models and algorithms to detect offending. AUSTRAC urges businesses to continue providing SMRs so that it can support its law enforcement partners to disrupt serious crimes. 

AUSTRAC’s article on SMRs can be accessed here, and its case study can be accessed here.

50          AUSTRAC’s RegTech Symposium

On 18 December 2023, AUSTRAC published a recap of the 2023 RegTech Symposium that it co-hosted with RegTech Association. The symposium discussed how technology solutions could support entities to comply with their AML/CTF obligations, with a focus on transaction monitoring programs and quality reporting.

The panel discussion topics included:

  • Transaction monitoring programs, quality reporting and the role of an administrator
  • Governance and assurance of transaction monitoring programs and reporting obligations
  • Actionable financial intelligence and law enforcement agency outcomes.

AUSTRAC will host a second RegTech Symposium in Melbourne in 2024, and encourages those interested in attending to complete an Expression of Interest form.

The full media release can be accessed here.

51          AUSTRAC reiterates its warning to businesses providing designated services to enrol

On 18 December 2023, AUSTRAC repeated its warning to businesses that have provided a designated service (such as financial or gambling services) for at least 28 days, to enrol with AUSTRAC. Reiterating its earlier warning from 24 October 2023, AUSTRAC noted that the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 was recently amended to clarify that unenrolled businesses that continue to provide designated services could be liable for a penalty of up to 12 penalty units ($3,756), or up to 60 penalty units ($18,780) for bodies corporate, for each day that the business remains unenrolled.

The full media release can be accessed here.

52          Scammers impersonating AUSTRAC

On 21 December 2023, AUSTRAC published a warning about scammers claiming to work on behalf of AUSTRAC and offering assistance to recover lost funds. AUSTRAC warns that it does not provide services to recover lost funds and would never request payment for them. AUSTRAC urges recipients of scam calls to report the incident to Scamwatch and to contact IDCARE if there are concerns about identity theft.

The full media release can be accessed here.

53          AUSTRAC reminds businesses to submit their 2023 compliance report

On 3 January 2024, AUSTRAC published a reminder for businesses to submit their 2023 compliance report by 31 March 2024.

To assist businesses with preparing their report, AUSTRAC also published an FAQ for the top five questions they received from businesses last year, and clarifying whether a report is required in certain circumstances. Business that do not submit their compliance report by the due date may be issued with a remedial direction and/or infringement notice.

AUSTRAC’s reminder can be accessed here, and its FAQ for completing the compliance report can be accessed here.

54          Treasury consults on review of the 2021 amendments to the continuous disclosure regime

From 1 November 2023 to 1 December 2023, Treasury consulted in relation to a review on the operation of the amendments made to the continuous disclosure regime by the Treasury Laws Amendment (2021 Measures No.1) Act 2021 (Cth) (Amending Act).

The Amending Act introduced a requirement for plaintiffs to prove that companies and their officers acted with “knowledge, recklessness or negligence” to be successful in a civil penalty proceeding for breaches of the continuous disclosure regime. 

Treasury’s review will be conducted in accordance with the terms of reference released on 19 September 2023. The terms of reference can be accessed here. The consultation paper can be accessed here.

55          Treasury consults on the Government’s new Sustainable Finance Strategy

On 2 November 2023, Treasury released Australia’s Sustainable Finance Strategy (SFS), which will support Australia’s pathway to net zero by providing an ambitious and comprehensive framework by reducing barriers to investment into sustainable activities.

The SFS’s policy priorities are structured in 3 key pillars, each containing a range of proposed tools and policies to support sustainable finance in Australia:

  • Pillar 1: Improve transparency on climate and sustainability;
  • Pillar 2: Financial system capabilities; and
  • Pillar 3: Australian Government leadership and engagement.

Treasury will seek feedback on the SFS, tools and policies until 1 December 2023. [NRFA2] 

The consultation paper and full media release can be accessed here.

56          Treasury publishes joint statement on collective engagement to implement the Crypto-Asset Reporting Framework

On 10 November 2023, Treasury published a joint statement by numerous signatories, including Australia, stating their commitment to transposing the Crypto-Asset Reporting Framework (CARF) into domestic legislative frameworks.

The CARF is a global tax transparency and compliance framework developed by the Organisation for Economic Co-operation and Development (OECD), directed to promoting tax transparency and the automatic exchange of information between countries to address the emerging tax evasion risks presented by cryptocurrency and digital assets.

The signatories intend to activate exchange agreements in time with a view to commencing exchanges by 2027, subject to national legislative procedures as applicable. Those signatories that have implemented the Common Reporting Standard (CRS) will also implement the 2023 amendments to the CRS, as agreed by OECD earlier this year.

The full media release can be accessed here.

57          Treasury publishes draft legislation on the Delivering Better Financial Outcomes package

On 14 November 2023, Treasury published for consultation draft legislation delivering the first tranche of the Delivering Better Financial Outcomes package of reforms.

The draft legislation, which amends the Corporations Act 2001 (Cth), Superannuation Industry (Supervision) Act 1993 (Cth) and other Acts, implements 11 recommendations from the Quality of Advice Review (Review). The Review’s final report made 22 recommendations as to how the regulatory landscape could better enable the provision of high quality, accessible and affordable financial advice to retail clients.

The draft legislation aims to increase accessibility and affordability of personal financial advice by providing legal certainty for the payment of adviser fees from members’ superannuation accounts, which adds considerable cost to the provision of financial advice. It also aims to improve consent requirements for certain insurance commissions.

The Quality of Advice Review can be accessed here. The draft legislation and explanatory materials can be accessed here.

58          Treasury consults on the use of genetic testing results in life insurance underwriting

On 27 November 2023, Treasury released a consultation paper regarding the use of genetic testing in life insurance underwriting.

The consultation relates to concerns around the Australian life insurance industry-led partial moratorium on the requirement to disclose genetic test results. The moratorium was introduced in 2019 to address concerns that individuals would not undertake genetic testing for fear of negatively impacting their ability to obtain affordable life insurance. There is a view that the moratorium continues to adversely impact participation in genetic testing research which might identify a need for potentially life-saving treatment.

Treasury has sought feedback on both the impacts of life insurers utilising genetic testing results in underwriting on genetic testing and research, and potential policy responses.

The consultation paper and full media release can be accessed here.

59          Treasury consults on mandatory industry codes to address scam activity

  • From 30 November 2023 to 29 January 2024, Treasury consulted on the introduction of new mandatory industry codes which outlined the responsibilities of the private sector, in particular the key sectors most targeted by scammers, in relation to scam activity.
  • The proposed framework focuses on banks, digital communications platforms and telecommunications providers in particular, and would introduce sector specific obligations to combat scam activity.

Where a business does not meet its obligations under the framework, internal and/or external dispute resolution mechanisms would ensure consumers have access to appropriate redress, and regulators would be given new enforcement and penalty powers.

The consultation paper can be accessed here.

60          Treasury consults on improvements to the superannuation system in retirement

On 4 December 2023, Treasury released a discussion paper seeking community and industry views on how to improve in the retirement phase of superannuation.

Treasury has observed that while much of the focus of trustees of superannuation funds, Governments and regulators to date has been on saving for retirement (the accumulation phase), there has been less emphasis on optimising the role of superannuation in retirement (the retirement phase).

The discussion paper focuses on three key areas to improve the retirement phase:

  • supporting members to navigate the retirement income system,
  • supporting funds to deliver better retirement income products and services; and
  • making lifetime income products more accessible.

The consultation closes on 9 February 2024.

The discussion paper can be accessed here.

61          Treasury consults on proposed licensing framework for payment service providers

On 8 December 2023, Treasury began consultation on a proposed licensing framework for payment service providers (PSPs) to ensure the regulation of payment services is fit-for-purpose and provides consistent regulation based on the activity a payment service provider performs.

The consultation paper, which follows an earlier consultation paper in June 2023 on the proposed framework, includes an updated list of payment functions to be licensed and leverages the Australian Financial Services framework to regulate PSPs.

The updated framework proposes:

  • a set of regulatory requirements to facilitate greater access to payment systems;
  • graduated regulatory requirements for stored-value facilities including payment stablecoins;
  • a framework for industry standard-setting; and
  • a new rule-making power to enable the introduction of a mandatory revised ePayments code to provide enhanced consumer protections.

The consultation closed on 2 February 2024.

The consultation paper, factsheet and full media release can be accessed here.

62          Treasury releases exposure draft legislation to introduce the financial market infrastructure reform package

On 15 December 2023, Treasury released for consultation exposure draft legislation, regulations and explanatory materials, directed to implementing the financial market infrastructure (FMI) reform package. The consultation follows the Government’s promise on 14 December 2022 to implement the FMI reforms.

 The FMI reform package:

  • includes powers for the Reserve Bank of Australia (RBA) to resolve a crisis at a domestic clearing and settlement facility to ensure the continuity of critical clearing functions, and to protect Australia’s financial stability;
  • includes powers for the RBA to assist a foreign regulator to resolve an overseas clearing and settlement facility licenced in Australia;
  • strengthens and streamlines ASIC and the RBA’s licensing, supervisory and enforcement powers over FMIs and reallocates powers between the minister and regulators to better accord with their respective mandates;
  • enhances regulator powers over foreign entities operating FMIs with a significant Australian nexus to ensure they are subject to appropriate oversight; and
  • implements the recommendations from the Council of Financial Regulators (CFR) in their advice to government on the FMI crisis and supervisory reforms in July 2020.

The consultation closes on 9 February 2024.

The exposure draft primary legislation, exposure draft regulations, and associated explanatory materials can be accessed here.

63          Treasury released exposure draft legislation on climate-related financial disclosure

On 12 January 2024, Treasury released for consultation exposure draft legislation to amend parts of the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) and the Corporations Act 2001 (Cth) (Corporations Act) to introduce mandatory requirements for large businesses and financial institutions to disclose their climate-related risks and opportunities.

The consultation follows the Government’s announcement of the final policy design for corporate climate-related financial disclosure requirements, which is aimed at providing Australians and investors with greater transparency and more comparable information about an entity’s exposure to climate-related financial risks and opportunities, and climate-related plans and strategies.

The amendments set out new climate-related financial reporting requirements for entities, leveraging the existing financial reporting regime under Chapter 2M of the Corporations Act, and include a new ‘sustainability report’ for a financial year which certain entities will need to prepare in addition to financial statements, notes to financial statements and a director declaration which form part of an annual financial report.

The consultation closes on 9 February 2024.

The exposure draft legislation, explanatory materials and other supporting materials can be accessed here.