Australia

Topic: Market integrity and misconduct

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Sizing up the 3 BEARs

The Australian Treasury has released and completed its consultation process on its Exposure Draft and accompanying Explanatory Material for the Banking Executive Accountability Regime (Size of an Authorised Deposit-taking Institution) Determination 2018. This draft legislative instrument defines what small, medium and large Authorised Deposit-Taking Institutions (ADIs) under the Banking Executive Accountability Regime (BEAR) are: a … Continue Reading

ASIC updates INFO 225: Corporate regulator bytes back at misleading and deceptive ICOs

The Australian Securities and Investments Commission (ASIC) has released its updated guidance with respect to the treatment of initial coin offerings (ICOs) and cryptocurrencies. In its updated Information Sheet (INFO 225), the corporate regulator has clearly outlined its intent to crack down on any misleading or deceptive conduct by ICO issuers and cryptocurrency traders. Misleading … Continue Reading

Royal Commission is making the BEAR growl louder – striking FEAR into financial institutions

At Norton Rose Fulbright, we have commented on a number of occasions that we expect the Banking Executive Accountability Regime (BEAR) to be extended beyond just authorised deposit-taking institutions (ADIs) and so as to cover other areas of the financial services sector.  Such move, which we have previously informally nicknamed “FEAR” (Financial Executive Accountability Regime), … Continue Reading

Possibility of extending the claws of BEAR

As the financial sector waits for the Australian Prudential Regulation Authority (APRA) to fully awaken the Banking Executive Accountability Regime (BEAR) through the provision of further guidelines, there is already a lot of chatter as to whether BEAR should be extended beyond its initial coverage of APRA-regulated Authorised Deposit-taking Institutions (ADIs). The Parliamentary Joint Committee … Continue Reading

The BEAR Awakens!

After a much long and at times unbearable wait, Federal Parliament has yesterday passed the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2018 (BEAR Legislation). The BEAR Legislation amends the Banking Act 1959 to impose accountability, remuneration and notification obligations on authorised deposit-taking institutions (ADIs) and those in directorship and senior management … Continue Reading

Treasurer wants BEAR by the start of next financial year

The Treasurer, the Hon Scott Morrison MP, has given his Second Reading Speech in the Parliament with respect to the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2017 (BEAR Legislation) that introduces the Banking Executive Accountability Regime (BEAR). In his speech, the Treasurer made no surprises except that his Government still intends … Continue Reading

Encouraging results on consumers’ perception of banks

In April 2016, the Australian Bankers’ Association (ABA) initiated the Banking Reform Program – Better Banking (Program).[1]   The Program was developed to protect consumer interests, increase transparency and accountability, and to build consumer trust and confidence in banks through a range of initiatives. Edelman Intelligence has conducted two rounds of consumer research studies to track … Continue Reading

Royal Commission into Misconduct in Financial Services

The much anticipated Royal Commission was no surprise to the Australian banking industry.  What was surprising was the extension of its terms of reference to local and foreign deposit-taking institutions, life and general insurers, superannuation funds, as well as asset managers, financial planning businesses and all other holders of Australian financial services licences.  Let there … Continue Reading

Annual Financial Institution Symposium

Norton Rose Fulbright is pleased to offer you a rare opportunity to hear from some of the leading voices in risk and disruption. We will be hosting our annual Financial Institutions Symposium in our Sydney office on Thursday 27 October 2016. Discussion will focus on current ‘Risks & Disruptors’ in the global technology and regulatory … Continue Reading

Product suitability obligation and intervention powers to be fast-tracked: Government responds to calls for Royal Commission into the banks

In response to Opposition calls for a Royal Commission into the banking sector, the Australian Government has announced a $127 million reform package aimed at increasing the powers of Australia’s corporate watchdog, ASIC. A key component of that package will be the accelerated implementation of two key recommendations of the Financial System Inquiry: an obligation on … Continue Reading

Government response to the Financial System Inquiry

Government releases its Response to FSI Final Report. The Australian Government has released its Response to last December’s Final Report of the Financial System Inquiry or ‘Murray Inquiry’. The Government appears to have accepted almost all of the Inquiry’s recommendations and has also proposed additional measures that are consistent with the Murray Inquiry’s underlying philosophy. … Continue Reading

Privilege and internal investigations

Conducting investigations into allegations of regulatory breaches, fraud or corruption can present serious legal and commercial risk if privilege cannot be asserted over the findings of those investigations. That risk may be compounded if boards choose to conduct such investigations in-house, often with compliance managers or in-house counsel reporting the findings of those investigations directly … Continue Reading

Super fraud – APRA releases guidance on prevention and response

On 10 June 2015, the Australian Prudential Regulation Authority (APRA) released the final version of its Superannuation Prudential Practice Guide SPG 223 – Fraud Risk Management (SPG 223) following consultation with industry conducted in October 2014. As with other prudential practice guides released by APRA, SPG 223 is a non-binding document which sets out APRA’s … Continue Reading

Financial Services Tomorrow…

We are on the cusp of a new era in the evolution of the financial services industry. New technology, data analytics and behavioural economics are promising to revolutionise the customer experience. If the regulators remove the regulatory barriers, then using multi-media to deliver mandated and voluntary disclosure in different formats and through different devices will … Continue Reading

Regulatory disruption

Technology led innovation can cause much indigestion for conduct and prudential regulators as they try to find the right regulatory pigeion hole for innovators in their regimes that were not built to handle such innovation.  It is this disruptive impact of innovation that is shaping the regulation of tomorrow. Numerous conduct regulators around the world have acknowledged that a mandatory … Continue Reading

Innovation and Disruption

Financial Institution Symposium  Technology-led innovation has the potential to truly disrupt existing business models and distribution channels in the financial services industry. In Australia and more broadly, we have seen start-ups build innovative payment systems, peer-to-peer lending platforms, crypto-currencies, robo-advice and automated investment management. However, the large institutions are well capitalised, have large customer bases … Continue Reading

Australia’s bribery and corruption regulator flexing its powers: a ‘wake-up call’ to company directors

For the second time ever, the Australian Federal Police have laid bribery and corruption charges against directors of an Australian company. Unlike their regulator counterparts in the US and UK, the AFP have until now, been very reluctant to exercise their anti-bribery powers, but with a reported further 14 active foreign bribery investigations at the moment … Continue Reading

ASIC enforcement actions Q4 2014: is an increase in penalties on the cards?

ASIC has recently released its quarterly enforcement report detailing enforcement outcomes between 1 July 2014 and 31 December 2014.  The report addresses the range of criminal and civil action taken by the regulator, and highlights action taken against companies and directors resulting in criminal charges which were most significant during the period. In addition, significant … Continue Reading

CFTC staff extends no-action relief – allows four foreign clearing organizations to continue clearing swaps for US persons

On December 18, 2014, the Commodity Futures Trading Commission’s (“CFTC’s”) Division of Clearing and Risk (“DCR”) issued extensions of previously granted “No-Action” relief to four foreign clearing organizations. The relief allows these foreign clearing organizations to continue to clear swaps for certain United States persons (“U.S. persons”) without being registered as a derivatives clearing organization … 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
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