Allens

Banks & Financial Institutions

Our experienced Banking & Financial Services legal team regularly publishes articles and updates – the full list of publications appears below. These publications provide a snapshot of the latest legislation, court cases, policy changes and contentious issues. If you'd like to be notified when we add new publications to the site, please go to our subscription page to sign up for email alerts or, alternatively, you can subscribe to our RSS feed.

For publications in other legal areas see our recent publications page.

Banks & Financial Institutions Publications

  • Client Update: Amendments to PPS lease law - what you need to know

    22 May 2017

    Legislation has come into force that will amend the Personal Property Securities regime. The amendments are designed to reduce the PPSA's impact on the equipment hiring industry. Previously hirers' equipment leases and bailment arrangements of an indefinite term, or short term leases of a year or more were deemed to be PPS leases, and security interests. If they were not perfected by registration, the owner of the equipment could lose priority, and could lose the equipment altogether if the lessee or bailee became insolvent. Many hirers were caught inadvertently. Now, those arrangements will only be caught if they are initially for two years or more, or the lessee or bailee ends up holding the equipment for two years or more. Partners Nicholas Creed and Ben Farnsworth explain.

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  • Focus: Anti-money laundering and counter-terrorism financing: Key questions for boards and executives in 2017

    16 May 2017

    Australian boards and senior executives are expected to maintain oversight of risk and compliance issues including bribery, sanctions, human rights and anti-money laundering. In-house counsel perform a central role in supporting this oversight and maintaining compliance. In the fourth of a five-part series, Partner Peter Haig and Associates Andrew Shetliffe and Glyn Ayres look at the key questions that Australian boards and senior executives should be asking about anti-money laundering and counter-terrorism financing in 2017.

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  • Client Update: Environmental bond and mine rehabilitation reform in Queensland

    15 May 2017

    Major reforms to environmental bonds and rehabilitation requirements are proposed in two discussion papers released by the Queensland Government. All mining sector operators should understand how the reforms will impact their current and proposed operations. Partner Bill McCredie and Senior Associate Gobind Kalsi report.

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  • Client Update: 2017 Budget: increased scrutiny on competition and accountability in the financial system

    10 May 2017

    Treasurer Scott Morrison this week announced that he has tasked the Productivity Commission to review the state of competition in Australia's financial system. The Budget has also included other measures focused on competition in the financial sector, including funding to establish a dedicated ACCC unit to undertake regular inquiries into specific financial system competition issues, an ACCC inquiry into residential mortgage pricing, and an open banking regime. The Government has also announced the introduction of a Banking Executive Accountability Regime. These measures follow a series of recent reviews and inquiries into the financial services industry. Partner Carolyn Oddie and Senior Associate Lisa Lucak report.

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  • Unravelled: CIPRs - some interesting findings

    5 May 2017

    We recently hosted some workshops in Sydney and Melbourne to discuss the proposed CIPR framework. The outcomes of those workshops were interesting - in some respects surprising - and this article provides a brief report.

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  • Unravelled: Recent decision on FoFA advice provisions - ASIC v NSG

    5 May 2017

    The recent case of ASIC v NSG Services Pty Ltd considers the FoFA best interests and appropriate advice provisions, as well as obligations of licensees. While the facts of the case provide an extreme example of how advisers and licensees can fail to comply with these duties, it also provides some useful judicial commentary on the provisions.

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  • Unravelled: Reporting significant breaches - or something that may (or may not) be a breach?

    5 May 2017

    The Taskforce established by Treasury to consider ASIC's enforcement powers released its first consultation paper a few weeks ago on breach reporting. We examine the most significant of the Taskforce's 12 'preliminary positions'.

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  • Focus: Anti-bribery laws and deferred prosecution agreements

    20 April 2017

    The Australian Government is, via two new consultations, proposing wide-ranging reforms to tackle the challenges that it faces in detecting, and prosecuting, serious corporate crime. Through proposed amendments to foreign bribery laws and the introduction of a Deferred Prosecution Agreement regime, the Federal Government is seeking to remove obstacles to prosecuting foreign bribery and increase the incentives for companies to self-report this and other misconduct. Partners Rachel Nicolson and Peter Haig, Senior Associates Christopher Kerrigan and James Campbell, and Lawyer Malak Johnson report.

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  • Client Update: Lessons from Singapore's new collective investment vehicle

    13 April 2017

    The Monetary Authority of Singapore recently sought public consultation on the features of its proposed new vehicle for collective investment, the Singapore Variable Capital Company. Partners Marc Kemp and Charles Armitage, and Senior Overseas Practitioner James Kanabar review the key elements of the new vehicle and consider the lessons which might be gleaned in relation to the introduction of a new Australian corporate vehicle for collective investment, announced by the Federal Government as part of the 2016-17 budget and scheduled (perhaps somewhat optimistically) to be introduced by 1 July.

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  • Client Update: Ipso facto clauses, safe harbour for directors - our comments on the draft exposure legislation

    10 April 2017

    The Federal Government has released draft exposure legislation designed to facilitate company reconstructions. Senior Finance Counsel Diccon Loxton, Senior Associate Alicia Salvo and Associate Frances Navarro-Towan discuss some of the implications and issues. 

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  • Allens insights: Not worth the paper they're not written on?

    8 April 2017

    There are significant commercial benefits in executing documents electronically, and Allens has adopted e-signature (using DocuSign) as a service to clients. Allens Senior Finance Counsel, Diccon Loxton, has written an article in two parts that examines the efficacy of e-signatures, and concludes that they are effective, including under s127 of the Corporations Act 2001 and (in various circumstances) deeds.

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  • Unravelled: ASIC's report on financial advice

    7 April 2017

    ASIC has recently released a report about its work with the big four banks and AMP on adviser misconduct. The report is essentially an update on the progress of ASIC's Wealth Management Project, and mostly contains information we already know. The most interesting part deals with the results of ASIC's review of adviser audit processes by the banks and AMP. They indicate that internal audits are not identifying compliance issues.

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  • Unravelled: A step closer to industry funding of ASIC

    7 April 2017

    Last week, the Federal Government moved another step closer to implementing an industry funding model for the recovery of ASIC's costs, by introducing the ASIC Supervisory Cost Recovery Levy Bill 2017 (as well as two related Bills) into Parliament. These Bills implement the recommendations of the Financial Services Inquiry and the Senate Economics Committee that ASIC be industry funded, and follows a number of rounds of industry consultation on exposure drafts and proposal papers.

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  • Focus: Parliament passes diverted profits tax legislation

    31 March 2017

    Legislation to implement a diverted profits tax has passed the Federal Parliament. From 1 July 2017, the tax may potentially apply to the diversion of profits offshore through arrangements between related parties. Targeted at large multinational groups, the diverted profits tax is a fusion of anti-avoidance and transfer pricing rules. Partner Toby Knight and Senior Associate Scott Lang discuss the final form of the legislation and the steps multinational groups should take to prepare for its implementation.

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  • Client Update: Productivity Commission's proposed alternate default models for superannuation

    30 March 2017

    In the latest (and undoubtedly most significant) of its reports into the design of default superannuation arrangements in Australia, the Productivity Commission yesterday released its Draft Report in relation to Superannuation: Alternative Default Models. Partner Geoff Sanders of the Allens Superannuation team reports on how the Draft Report moves the Commission's thinking forward in relation to how default contributions might be allocated to superannuation products in the years to come.

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  • Client Update: Treasury consultation paper flags changes to stapled structures

    28 March 2017

    Stapled structures have been used as an investment platform in the property and infrastructure sectors for decades, and more recently have been deployed into renewable energy, agriculture and other areas. Through the issue of its Taxpayer Alert on stapled structures on 31 January 2017, the ATO indicated that it had serious tax integrity concerns with the proliferation of stapled structures. The Commonwealth Treasury has now revealed that it has also been concerned at the increasing impact of stapled structures on the corporate tax base by releasing a Consultation Paper calling for submissions on potential policy options in relation to stapled structures, the taxation of real property investments and the recharacterisation of trading income. Partner Martin Fry and Senior Associate Igor Golshtein report.

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  • Paper: 25 years of class actions

    27 March 2017

    Class action risk is changing. A new wave of entrepreneurialism by plaintiff lawyers and litigation funders has substantially changed class action dynamics in recent times. The 25th anniversary of the class action regime is a good opportunity to reflect on whether, in the light of those and other developments, the regime is still serving its objectives.

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  • Focus: Crowd sourced equity funding to gain traction with new legislation

    23 March 2017

    After a difficult journey, both Houses have passed the Corporations Amendment (Crowd-sourced Funding) Bill 2016 - introducing a new funding avenue for Australian startups and an opportunity for retail investors to access equity in emerging companies. Managing Associate Valeska Bloch, Senior Associate Tom Griffin, Summer Clerk Katherine Tsatsaklas and Applied Legal Technology Head Paralegal Hope Williams report.

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  • Client Update: Innovative Superannuation Income Streams - at last

    21 March 2017

    Earlier today, Treasury released exposure draft regulations for 'Innovative Superannuation Income Streams'. They set out income stream standards that will be relevant for products such as deferred annuities and group self-annuitised products. The Allens Superannuation team reports.

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  • Focus: Sanctions: The 5 questions your board and executives should be asking in 2017

    16 March 2017

    Australian boards and senior executives are expected to maintain oversight of risk and compliance issues including bribery, sanctions, human rights and anti-money laundering. In-house counsel perform a central role in supporting this oversight and maintaining compliance. In the second of a five-part series, Partners Rachel Nicolson and Peter Haig, Senior Associate Christopher Holland and Lawyer Malak Johnson look at the key questions that Australian boards and senior executives should be asking themselves about sanctions in 2017.

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  • Contract Law Update 2016

    15 March 2017

    When is a person bound by their e-signature? When does a breach of contract constitute a repudiation of that contract? When does an exchange of correspondence give rise to a binding contract? What is the latest on penalties? These were some of the contract law issues considered by appellate courts during the past year. In this update, we review the most important contract law decisions by Australian appellate courts in the past 12 months and consider their significance for the development of Australian contract law.

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  • Unravelled: Clearing the way for social impact investing

    10 March 2017

    The Commonwealth Treasury is seeking feedback on how to kickstart social impact investment in Australia.

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  • Unravelled: Consumer protection in the banking, insurance and financial sector

    10 March 2017

    The Senate Economics References Committee is conducting an inquiry into the regulatory framework for the protection of consumers in the banking, insurance and financial services sector.

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  • Focus: Anti-bribery & corruption: Key questions for boards and executives

    6 March 2017

    Australian boards and senior executives are expected to maintain oversight of risk and compliance issues including bribery, sanctions, human rights and anti-money laundering. In-house counsel perform a central role in supporting this oversight and maintaining compliance. In the first of a five-part series, Partners Rachel Nicolson and Peter Haig, Senior Associate Tim Farhall and Lawyer Shamistha Selvaratnam look at the key questions that Australian boards and senior executives should be asking themselves about anti-bribery regulation and compliance practice in 2017.

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  • Allens insights: Australia - Fund Finance 2017, 1st Edition

    24 February 2017

    Fund financing facilities have continued to flourish in Australia, providing sponsors, general partners and trustees with additional funding flexibility and liquidity. Allens Partner Tom Highnam, Managing Associate Rita Pang, and Associate Victoria Johns provide an overview of the funds sector, current funding options and structuring, the prevalence of sovereign wealth funds and what new developments may be expected over the next twelve months.

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  • Focus: Forge-ing ahead - the treatment of fixtures under the PPSA

    21 February 2017

    The Court of Appeal has confirmed that under the Personal Property Securities Act 2009 (Cth) 'fixtures' are to be understood in the same way as at general law and the same common law test applies to determining whether goods affixed to land have become fixtures (ie part of the land). In unanimously upholding a 2016 decision of the Supreme Court of New South Wales, the appeal decision serves as yet another remainder of the importance of registering security interests on the Personal Property Securities Register, including those arising under equipment leases. Partner Kim Reid, Senior Associate Przemek Kucharski and Associate Jonathon New, who acted for the successful party in this matter, report.

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  • Client Update: Take care! Court confirms the devil in the details for PPSA registrations

    10 February 2017

    In a recent case a leasing company lost $23 million worth of leased equipment because it had registered the lease against the lessee company's ABN rather than its ACN – involving just two extra digits. The equipment vested in the lessee company when it went into voluntary administration. The court upheld the constitutional validity of the provision under which this occurred. Senior Finance Counsel Diccon Loxton and Partners Karla Fraser and Renee Boundy report on the case: Alleasing Pty Ltd v Onesteel Manufacturing Pty Ltd (Admins Apptd) [2017] NSW SC 21, a decision of the New South Wales Supreme Court.

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  • Allens insights: Trends over the past year in the Australian projects and infrastructure sectors

    8 February 2017

    A substantial pipeline of both private and public infrastructure projects has attracted a variety of local and offshore project finance providers wishing to gain exposure to returns from these attractive Australian investment opportunities. Allens Partners Nick Adkins, Scott McCoy and Rob Watt look at how this is unfolding, the increase in non-bank lenders competing for projects, the various funding models at play, and the opportunities available in the near future.

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  • Unravelled: English High Court provides important guidance on approach to LIBOR mis-selling claims

    7 February 2017

    The English High Court has handed down its judgment on the first major case following the global regulatory investigations into alleged LIBOR manipulation.

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  • Unravelled: Retail banking remuneration review

    7 February 2017

    The Australian Bankers' Association last year commissioned Stephen Sedgwick to undertake a review of remuneration in retail banking.

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  • Unravelled: Improving external dispute resolution schemes - rather odd recommendations

    7 February 2017

    It is difficult to describe the interim recommendations of the Expert Panel reviewing the 'financial system external dispute resolution and complaints framework' as anything other than odd.

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  • Unravelled: Mandatory margining

    7 February 2017

    Late last year, APRA released the implementation schedule for its long-awaited Prudential Standard CPS 226 Margining and risk mitigation for non-centrally cleared derivatives.

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  • Client Update: ASIC announces fintech licensing exemptions

    19 December 2016

    As part of its implementation of the 'regulatory sandbox' for fintech companies, ASIC is providing relief for certain fintech businesses from the obligation to hold an Australian financial services or Australian credit licence. Relief may be available for up to 12 months and may be useful to businesses in what ASIC refers to as the 'testing' stage of their development. ASIC has also made some changes to the responsible manager requirements for licensees, which may be particularly useful to 'robo advice' providers. Managing Associate Simun Soljo and Associate Jonathan Gardner report.

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  • Client Update: A framework for CIPRs or just more work for super trustees?

    16 December 2016

    Yesterday, Treasury released a paper seeking feedback on a framework for Comprehensive Income Products for Retirement (CIPRs). It will permit trustees to offer members on a 'soft default' basis 'mass-customised, composite retirement income products' and, to encourage trustees to do what some might think they can already do, trustees will have no liability to a member who sues them because the CIPR was not in the best interests of the member. It is all most surprising, and for trustees it is a whole new kettle of fish. CIPRs are meant to be available from 1 July 2018, but there is a long way between the cup and the sip as they say and we suspect much of it won't make it into law. The Allens superannuation team reports.

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  • Client Update: Product design and distribution rules

    13 December 2016

    On 13 December 2016, Treasury released a paper seeking feedback on the proposed financial product design and distribution obligations, and proposed product intervention powers for ASIC. The proposals are intended to 'create new accountability obligations' for product issuers and distributors. On one view, it is a brave new world, on another, it is just more of the same. Which it turns out to be, we think, will depend on what product issuers make of it and what ASIC does with it. Industry has until March 2017 to make submissions on the detail, it is unlikely that more substantial objections to the policies will be successful. The Financial Services Regulation team report.

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  • Unravelled: Budget superannuation changes passed

    9 December 2016

    The Government's main changes to superannuation have been passed by Parliament. We look at what this means for the superannuation industry (and for you).

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  • Unravelled: Seeking judicial advice on whether to seek judicial advice

    9 December 2016

    For more than 150 years trustees have been able to obtain advice from courts on matters affecting the management or administration of trust property and on matters respecting the interpretation of trust deeds. Trustees would usually only seek such advice, however, if they had doubts about a proposed course of action.

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  • Unravelled: Insourcing investment management in super - challenges and opportunities for in-house teams

    9 December 2016

    With the release of an ASFA Best Practice Paper on insourcing investment management, we look at some of the challenges and opportunities for in-house legal teams that come with the seemingly inexorable move in the superannuation industry towards insourcing investment management functions.

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  • Client Update: Court confirms life easier for default interest clauses post-Paciocco

    6 December 2016

    A recent New South Wales Court of Appeal case considered the application of the penalties doctrine to default interest rate provisions in loan agreements following the High Court's liberal approach to the doctrine in Paciocco v ANZ. Senior Finance Counsel Diccon Loxton, Lawyer Hamish McCormack, and Law Clerk Ryan Abotomey report on Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328.

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  • Client Update: Updated fee and cost disclosure - transition period extended

    29 November 2016

    ASIC has today announced that superannuation fund trustees and responsible entities will have until 1 October 2017 to comply with the updated fee and cost disclosure rules for PDSs set out in ASIC Regulatory Guide 97 and ASIC Class Order 14/1252 - but only if they comply with certain conditions. Partner Geoff Sanders and Senior Associate Stephanie Malon report.

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  • Client Update: Successor Fund Transfers - all aboard!

    25 November 2016

    APRA yesterday released a draft guide on transferring a member's benefit from one superannuation fund to another without their consent. Because the member is not consenting, the law says that the receiving fund must, when compared with the existing fund, confer 'equivalent rights' in respect of benefits. APRA has interpreted this requirement narrowly. If APRA is correct, the requirement provides little, if any, protection to superannuation fund members. Senior Regulatory Counsel Michael Mathieson and Partner Michelle Levy report.

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  • Client Update: Review into four major banks - money for consultants?

    25 November 2016

    The Parliamentary Economics Committee released its report following its review into Australia's four major banks yesterday. Our Financial Services Regulation team has a look at the recommendations in this update.

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  • Focus: Road map to anti-money laundering and counter-terrorism financing reform

    4 November 2016

    The Federal Attorney-General's Department has released its draft Project Plan for the implementation of the wide-ranging recommendations arising from the recent statutory review of Australia's anti-money laundering and counter-terrorism financing regime. Partner Peter Haig, Associate Andrew Shetliffe and Lawyer Russ Marshall report.

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  • Unravelled: Life insurance, conflicted remuneration and commissions

    3 November 2016

    The Bill to amend the conflicted remuneration provisions in the Corporations Act for life insurance has been introduced into Parliament a second time and draft regulations have been released for comment. However, we struggle to know how to describe them because the changes seem to have conflicting purposes.

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  • Unravelled: Risk culture - 'an evolving area of supervisory practice'

    3 November 2016

    A director of a bank, life company or general insurer who read APRA's recent information paper on risk culture could be excused for indulging in a wry smile. Since mid-2015 he or she has been subject to legislative obligations concerning risk culture. However, the information paper suggests that APRA is still working out what risk culture is and how to assess it.

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  • Unravelled: The ASIC Enforcement Review Taskforce unloaded

    3 November 2016

    The ASIC Enforcement Review Taskforce members and terms of reference have been announced. The terms of reference are very broad and come as no surprise, with an emphasis on evaluating the adequacy of ASIC's enforcement toolkit. We analyse the key themes that are likely to emerge.

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  • Client Update: Financial advice and fees - ASIC reports

    27 October 2016

    ASIC released its report Financial advice: Fees for no service today. It says that there has been a systemic failure by advice licensees within some of the major banks and AMP to provide ongoing advice in return for ongoing fees. The report relates chiefly to arrangements between licensees and clients when the law still permitted product issuers to pay trail commissions. ASIC says that FOFA, specifically the opt-in and annual fee disclosure requirements, will substantially reduce the likelihood of similar systemic failures recurring, but then concludes that the advice industry 'may still have a culture of reliance on ongoing trail revenue (through commissions and fees) for a portion of their income, without necessarily providing advice to customers in return'. It is not clear why ASIC thinks that FOFA won't break that reliance. Partner Michelle Levy, Senior Regulatory Counsel Michael Mathieson and Managing Associate Simun Soljo report.

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  • Client Update: Conflicted remuneration and life insurance

    20 October 2016

    Exposure draft life insurance regulations were released yesterday. They are a marked departure from the existing conflicted remuneration provisions. Now, a benefit can only be conflicted remuneration if it could reasonably be expected to influence financial product advice. These regulations will create a new class of conflicted remuneration for life risk insurance products that does not depend on the benefit being expected to exert the relevant influence. This will apply 'in addition' to the existing definition of conflicted remuneration. Partner Michelle Levy, Senior Regulatory Counsel Michael Mathieson and Managing Associate Simun Soljo look at the draft regulations.

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  • Client Update: Mandatory margining: APRA final rules released

    20 October 2016

    APRA has released its long-awaited Prudential Standard CPS 226 Margining and risk mitigation for non-centrally cleared derivatives. While these rules are based on the Draft released in February of this year, and address some of the concerns raised during the consultation process, there are still a number of questions which remain unanswered. Partner Tom Highnam and Senior Associate Rod Aldus consider the new standard and some of the potential pitfalls for Australian and international derivative counterparties.

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  • Client Update: Life insurance industry gets a remuneration Bill, ASIC report and Code of Practice

    12 October 2016

    This is a significant week for the life insurance industry, with the re-introduction by the Federal Government of a Bill to reform commissions payable on life insurance policies, the release by ASIC of findings of its review of life insurance claims, and the launch yesterday by the Financial Services Council of its Life Insurance Code Of Practice. Partner Michelle Levy, Managing Associate Simun Soljo, and Lawyer Nicholas Borger report.

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