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
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
Recent enforcement action by ASIC against collapsed payday lender, the Cash Store Pty Ltd (TCS), has put the sale of consumer credit insurance (CCI) into sharp focus. On 19 February 2015, the Federal Court awarded penalties against TCS and its loan funder, Assistive Finance Australia Pty Ltd (AFA) of almost $19 million. It found that … Continue Reading
The Federal Government’s novel approach to tackling housing insurance affordability issues in North Queensland continued this week with the unveiling of ASIC’s home insurance comparison website. Replete with disclaimers and emphasising product features over policy price, the website is intended to aid consumer understanding and decrease underinsurance in a market struggling under flood and wind … Continue Reading
The Australian Securities & Investments Commission (ASIC) has continued its campaign for improved disclosure by insurers and their agents – this time in the motor vehicle insurance sphere. On 26 February 2015, ASIC published a report that examines the operation of no-claims discount (NCD) schemes for motor vehicle insurance and concluded that the schemes do not … Continue Reading
On 19 February 2015, we reported on ASIC enforcement actions in the second half of 2014. ASIC has since updated its regulatory guidance on enforceable undertakings (RG 100). The updated guidance will apply to enforceable undertakings accepted by ASIC from 9 March 2015. The changes made to the guidance centre primarily around the engagement of experts … Continue Reading
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
A spate of natural disasters in recent years has revealed a concerning level of underinsurance in the home and contents insurance market, according to reports released by ASIC in late 2014. ASIC has called on insurance providers ‘to implement measures that will meaningfully improve consumers’ understanding of their policy, and help ensure consumers buy a … Continue Reading
On 2 February 2015, the Australian Securities and Investments Commission (“ASIC”) issued a class exemption which seeks to provide guidance to foreign entities about when they will be regarded as having “entered into” an OTC derivative in Australia for the purposes of the ASIC Derivative Transaction Rules (Reporting) 2013 (“Australian DTRs”), as such OTC derivatives … Continue Reading
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
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
With the Streamlining Regulations now disallowed, a key question for the financial services industry will be what the future holds for dealings between advisers and their clients (see our previous blog for the consequences). In a statement issued by the Finance Minister, Senator Mathias Cormann, the Government has indicated an intention to return its proposed Future … Continue Reading
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
With continued public scrutiny and increased pressure on the financial advice industry, the Senate yesterday passed a motion disallowing the latest Future of Financial Advice Regulations (Streamlining Regulations). As a result, the original Future of Financial Advice (FOFA) reforms as enacted by the former Labor Government came into effect immediately. ASIC’s Facilitative Approach Recognising the … Continue Reading
ASIC has recently released Consultation Paper 224 seeking feedback on its proposed relief and updated guidance (revised RG 221) to facilitate electronic delivery and more innovative use of product disclosure statements (PDSs). ASIC Commissioner John Price said, ‘ASIC is focused on making disclosure more effective and meaningful for consumers of financial services. We want to … Continue Reading
ASIC has this week released its Strategic Outlook paper, a new initiative which sets out what it sees as its key challenges in 2014-2015. Among these key challenges is the important and reoccurring theme of ‘digital disruption’ in the context of the Australia’s financial services industry and financial markets. ASIC has identified that “[t]raditional business … Continue Reading
ASIC has reminded AFS licensees of their obligation to report significant breaches to ASIC promptly and of the need to ensure that internal risk management systems are sufficiently robust to identify, assess and escalate breaches and report significant breaches to the regulator. In an open letter to the Institute of Internal Auditors Australia, and a … Continue Reading
ASIC proposes new Class Order on Fee and Cost Disclosure Australia’s peak corporate regulator has just released a proposed Class Order that may have an impact on the PDS (Product Disclosure Statements) of MySuper, choice super and managed investment products. Frustratingly, PDS will again need to be reviewed and if necessary, amended to comply with … Continue Reading
