Australia

Topic: Funds management

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Australian government announces tightened rules around foreign investment in Australian agricultural land

On 11 February 2015, the Australian government announced that it would be changing the threshold for notifications of agricultural land purchases by foreign investors from $252 million to $15 million from 1 March 2015. Existing investments included in the threshold The new $15 million threshold is a cumulative threshold – it applies to a foreign … Continue Reading

FSI Consumer Protection Recommendation 26: Insurance disclosure tools and calculators

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 … Continue Reading

FSI Consumer Protection Recommendation 25: Raising the competency of advisers

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 … Continue Reading

FSI Consumer Protection Recommendation 24 : Aligning with the interests of consumers

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 … Continue Reading

FSI Consumer Protection Recommendation 22: Product intervention powers

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 … Continue Reading

FSI Consumer Protection Recommendation 21: A targeted and principles-based product design and distribution obligation

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 … Continue Reading

Product governance and a proactive, interventionist regulator: the consumer protection recommendations of the Financial Systems Inquiry

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 the responsibility … Continue Reading

The Murray Inquiry – Technology and cybersecurity

As with the Murray Inquiry’s Interim Report, the Final Report highlights cyber security and technology related fraud risks as an emerging trend for the financial services industry that presents many challenges. At the forefront of the risks that arise is the rapid pace of technological change that is occurring within the financial system and how … Continue Reading

The Murray Inquiry – Retail corporate bond market

The expansion of debt capital markets funding by corporates has been on the agenda of both this present and previous governments, as they seek to encourage diversification of funding sources and create investment products for retail and institutional investors. The Murray Report’s  recommendation should be welcomed and supported by the industry which has long advocated … Continue Reading

The Murray Inquiry – Innovation, Technology and Regulators

The Murray Inquiry’s Final Report strongly endorsed facilitating innovation in the financial services industry and technology neutral approach to regulation of financial services providers. The Report recommends the establishment of a permanent public–private sector collaborative committee, the ‘Innovation Collaboration’, to facilitate financial system innovation. This is similar to the ‘Innovation Hub’ initiative by the UK’s … Continue Reading

The Murray Inquiry – Superannuation

The Murray Inquiry’s Final Report was a mixed bag for the super industry, with some recommendations going some way toward addressing the needs of industry and consumers but with many of the hard decisions left for another day and another review. Improving efficiency The Inquiry clearly has reservations about the effectiveness of the Stronger Super … Continue Reading

The Murray Inquiry – International competitiveness and the funds management sector

The Murray Inquiry’s Final Report brings good news for the funds management sector and its desire to compete internationally.  This is described as a priority area of reform and Government action as it is a key component of getting the blueprint right for the Australian financial system into the future. The Inquiry’s rationale for supporting … Continue Reading

The Murray Inquiry – Primary themes

The Murray Inquiry asserts that Australia’s financial system has performed well since the Wallis Inquiry and has many strong characteristics.  But it also has a number of weaknesses: taxation and regulatory settings distort the flow of funding to the real economy; it remains susceptible to financial shocks; superannuation is not delivering retirement incomes efficiently; unfair consumer … Continue Reading

The Final Report of the Murray Inquiry

On Sunday 7 December 2014 the Federal Treasurer, Mr Joe Hockey, released the Final Report of the Financial System Inquiry (or ‘Murray Inquiry’ after its Chair, David Murray) having received it at the end of November in accordance with the Terms of Reference.   The Inquiry was established by the Treasurer in December 2013 to review … Continue Reading

China allocates RMB 50 billion RQFII quota to Australia

The People’s Republic of China (PRC) announced the expansion of the Renminbi Qualified Foreign Institutional Investor (RQFII) program to include Australia. Australian investors will now be able to invest up to 50 billion yuan (RMB) ($A9.28 billion approx.) An agreement to allow RMB trades to be cleared in Australia was also announced. These developments follow … Continue Reading

ASIC works with industry on digital disclosure

After recently releasing a consultation paper aimed at facilitating innovative financial services disclosure (see our previous blog), ASIC has announced a joint industry project to develop such innovative disclosure. As part of the project, ASIC will work with AMP and Vanguard to develop and user-test a short, online ‘key facts’ sheet and a self-assessment tool … Continue Reading

High Court closes the door on in specie distributions in managed investment schemes without express power

On 5 November 2014 the High Court handed down its decision in Wellington Capital Limited v Australian Securities and Investments Commission [2014] HCA 43 concerning the in specie distribution of scheme property by a responsible entity.  However, the decision is applicable to trusts more generally. The key issue was whether, in the absence of a … Continue Reading
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