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

  • Unravelled: Conflicts of interest and the duty to manage them

    9 August 2016

    The Corporations Act 2001 (Cth) was amended in 2004 to include an additional obligation for Australian financial services licensees to have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities undertaken by the licensees in the provision of financial services. Conflicts were an afterthought, coming a couple of years after the Financial Services Reform Act (Cth) in 2001. At the time, it didn't seem to be a particularly onerous obligation, and so it has proved. The regulators and various enquiries and committees have criticised financial services providers for letting conflicts of interest get in the way of their customers' interests, but the Corporations Act obligation to have adequate arrangements for managing conflicts is a poor basis for requiring licensees to put their customers' interests first'

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  • Unravelled: Post-election policy recap

    9 August 2016

    As the dust settles following the recent federal election, it is a good time to reflect on what we can expect from the re-elected Coalition Government for the financial services sector. There are two main groups of policy proposals that are going to need to get through Parliament. The first is the fairly significant superannuation changes announced in the 2016/17 Budget in May. The second is the series of changes the Government announced in its response to the Financial System Inquiry. This brief article provides a refresher on each of them.

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  • Client Update: Penalties: The final word

    27 July 2016

    Today, the High Court handed down its long-awaited decision in Paciocco v Australia and New Zealand Banking Group Limited, bringing an end to six years of litigation. The High Court dismissed the appeal, holding that the late payment fee charged by ANZ on credit card accounts was not a penalty or otherwise unconscionable, unjust or unfair under the relevant statutory prohibitions. The decision provides the final word on the application of the penalties rule (at least for now). Partner Belinda Thompson, Managing Associate Kate Austin and Lawyer Kelly Roberts consider the decision and its implications.

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  • Unravelled: Brexit and financial services regulation

    6 July 2016

    The idea that the UK could, on leaving the EU, simply walk away from a significant amount of EU financial services regulation seems fantastical. It is likely that the UK will, instead, have to adopt (on exit) vast amounts of EU financial services regulation. However, the UK will have no say on the future direction of EU financial services regulation - and it will also have to manage the inevitable future divergence between that regulation and its own domestic law.

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  • Unravelled: Welcome changes to the derivative charging rules for superannuation trustees

    6 July 2016

    The Government has recently made changes to superannuation law that helps clear the way for trustees of regulated superannuation funds to charge fund assets in order to enter into a broad range of exchange-traded and Over-The-Counter derivative transactions. The changes are intended to make it easier for super fund trustees to manage risk in the post-GFC environment.

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  • Unravelled: Blockchain and why smart contracts still need smart lawyers

    6 July 2016

    There has been so much talk about blockchain and distributed ledger technology recently, especially in financial services, that you might be forgiven for thinking it might be more hype than substance. But we think it could be very important technology.

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  • Allens insights: Value capture and getting smart

    30 June 2016

    The Australian Government has identified value capture and innovative financing as key elements of its Smart Cities Plan. The move will have significant implications for traditional project finance. By Paul Kenny, Sector Leader, Government, and Phillip Cornwell, Project Finance, Consultant at Allens.

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  • Focus: Predictive coding endorsed again by English High Court

    29 June 2016

    In its second decision on predictive coding this year, the English High Court has again accepted the use of this innovative technology in discovery, this time in a contested application. Partner Duncan Travis, Managing Associate Kate Austin and Law Graduate Yi-Ling Ng examine the case and its implications.

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  • Client Update: Important AMIT regime developments

    24 June 2016

    The Australian Securities and Investments Commission has granted relief to assist responsible entities of registered schemes to make changes to their constitutions to qualify for the new attribution managed investment trust regime without holding a members' meeting. In addition, and in response to submissions from various industry bodies, the Australian Taxation Office has confirmed the deadline by which amendments need to be made for it to treat a trust as having qualified as an AMIT for any part of the income year commencing 1 July 2016. Partner Marc Kemp, Senior Tax Counsel Judith Taylor and Senior Overseas Practitioner James Kanabar review the key elements.

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  • Paper: How the UK's Brexit decision could affect you

    20 June 2016

    This week the UK will vote on whether it wants to remain part of the EU. This decision could have global economic impacts and affect your business. For instance, how will it impact on free trade agreements with Europe and the rest of the world, the pace of deals in the UK, and the UK regulatory environment? To learn more, see an EU referendum overview put together by our alliance partner, Linklaters.

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  • Special Report: Understanding the opportunities and navigating the legal frameworks of distributed ledger technology and blockchain

    17 June 2016

    Authored by a multidisciplinary team from Allens, Blockchain Reaction is designed to assist business stakeholders, decision makers and in-house counsel across a variety of sectors to understand the technology and how it is being used, as well as navigate the regulatory and legal opportunities and challenges.

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  • Client Update: ASIC releases consultation paper on regulatory sandbox exemption for startups

    9 June 2016

    ASIC has released a consultation paper on proposals to facilitate innovation in the financial services sector. The proposals include details of the long-awaited 'regulatory sandbox'. It will be of interest to both emerging companies who may rely on the relief, as well as investors in this space. Senior Associate Simun Soljo and Law Graduate Antonia Ross look at what the paper proposes.

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  • Allens insights: Green Renaissance in Australia

    8 June 2016

    After more than three years of inertia, the Australian renewable energy industry is finally showing signs of a resurgence. A series of reviews of the Renewable Energy Target since 2012, and the abolition of the carbon tax in 2014, created a climate of uncertainty that meant investment in new large-scale renewable generation slowed dramatically.

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  • Allens insights: Getting The Deal Through: Market Intelligence - Project Finance

    3 June 2016

    Allens Partners Phillip Cornwell, Michael Ryan and Ben Farnsworth were part of the global panel analysing the project finance market, including key economies, regional analysis and PPPs. In Getting the Deal Through's second annual issue focusing on the global project finance markets, Phillip, Michael and Ben analysed the evolving legal and regulatory landscape in Australia.

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  • Client Update: Registered schemes' constitution

    3 June 2016

    ASIC has said it will grant relief to assist responsible entities (RE) of registered schemes to make changes to their constitutions to qualify for the new attribution managed investment trust (or AMIT) regime without holding a unitholders' meeting. Partner Marc Kemp and Law Graduate Antonia Ross review the key elements of the announcement.

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  • Unravelled: A reprieve for ASIC and APRA ... but not for the FCA

    2 June 2016

    ASIC and APRA often cop flak from various quarters (including from us) and so today, for something different, we train our sights on the Financial Conduct Authority in the UK. What the FCA has said about providing personal advice to retail clients is interesting, debatable and likely to induce a strong sense of déjà vu.

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  • Unravelled: The end of the AML/CTF regime as we know it?

    2 June 2016

    The past year or so has been an action-packed one for devotees of anti-money laundering policy and the recent release of the Report on the Statutory Review of the AML/CTF Act 2006 may herald the most significant changes to our regime since it was introduced a decade ago.

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  • Unravelled: Coming this spring: ACCC to monitor large merchants' payment surcharges

    2 June 2016

    The Reserve Bank has now released a Standard which sets out what payment surcharges will be permitted for the purposes of the new Part IVC of the Competition and Consumer Act 2010 (Cth). The aim of the Standard is to improve competition and efficiency by providing to consumers price signals associated with the actual cost of using certain payment methods, with the ACCC given the power to monitor and enforce compliance with new laws.

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  • Unravelled: AMITs are here (at last)

    2 June 2016

    It has taken a while, but out of the dust of an early Federal Budget and double-dissolution election announcement, a new tax attribution regime for 'Attribution Managed Investment Trusts' has emerged relatively intact. While the AMIT regime should generally be welcomed as a positive thing for MITs in terms of certainty and flexibility, it remains to be seen whether it will achieve another of its original aims.

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  • Paper: The Public-Private Partnership Law Review

    18 May 2016

    Partners David Donnelly and Nicholas Ng examine public-private partnerships (PPPs) in Australia, including the year in review, the general framework, bidding and award procedures, recent decisions and the outlook for 2015.

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  • Focus: Australia and Singapore enter into Comprehensive Strategic Partnership

    17 May 2016

    The Australian and Singaporean governments have recently concluded discussions on a landmark agreement that will see the two countries cooperating across a range of strategic initiatives, including in the areas of trade and economics, innovation, education, people and defence. The Comprehensive Strategic Partnership builds on the already strong relations between Australia and Singapore and is expected to provide new cross-border investment opportunities through enhanced bilateral relations. Singapore-based Managing Associate, Jessica Choong, reports.

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  • Client Update: Personal Property Security regime commences in PNG

    10 May 2016

    The commencement of the Personal Property Security regime means important changes to the way companies transact business in Papua New Guinea. Partner Karla Fraser and Senior Associate Sarah Kuman report.

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  • Unravelled: New ASIC funding - looking beyond the headlines

    4 May 2016

    Along with the public release of the ASIC Capability Review Report, the Government announced a suite of reforms giving ASIC additional (but targeted) funding and has also sought to remove some of the shackles on hiring it believes may be hindering ASIC's ability to recruit top talent. At the same time, the Government confirmed that a 'user pays' model will be introduced for ASIC's funding needs from the second half of 2017 onwards.

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  • Unravelled: ASIC getting a bigger toolkit sooner than expected

    4 May 2016

    In its response to the capability review into ASIC, the Federal Government has made a commitment to accelerate the implementation of a product intervention power for ASIC and the product design and distribution obligations for the financial services industry, but it left to one side some other important issues raised by the review. We consider what this might mean for both the regulator and the regulated.

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  • Unravelled: 'Tough cop' ASIC vs a Royal Commission

    4 May 2016

    Has talk of a royal commission turned the ASIC Capability Review into an unlikely catalyst for an enhanced enforcement agenda? With Labor pushing hard for a royal commission into the banking and financial services industry and an election looming, the Government moved swiftly to announce broad reform measures to equip ASIC with stronger powers and funding, as well as a new Commissioner with a financial crime prosecution background, to ensure that, in ASIC, Australia has a 'tough cop on the beat'.

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  • Unravelled: A long time coming: The Retirement Income Streams Review Report

    4 May 2016

    Going into the 2013 election, the present Government promised a review of the regulatory framework for retirement income streams. Today, the Government finally released its report. It has been a long time coming. And while the main outcome – a new category of tax effective pensions and annuities – will be welcomed by many, there are unanswered questions and implementation may take a while.

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  • Client Update: 'Chain of Responsibility' amendments impose new environmental obligations in Queensland

    28 April 2016

    The Queensland Parliament has passed the 'Chain of Responsibility' Bill with important amendments prior to enactment. The amending Act establishes a new regime under the State's primary environmental legislation that exposes related bodies corporate, executive officers, financiers, shareholders and a select category of 'related persons' to the receipt of orders from the environmental regulator for those entities to satisfy the environmental obligations of companies operating in Queensland. Partner Bill McCredie, Senior Associate Gobind Kalsi and Paralegal Maggie Shelton report.

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  • Client Update: Court accepts market-based causation

    21 April 2016

    Perhaps the most important unanswered question in Australian class action law has been how causation may be established in a shareholder class action. After more than a decade of uncertainty, the Supreme Court of NSW has ruled that shareholders can prove causation by establishing that the price of the shares they bought was 'inflated' by a company's misleading statements. Partner Jenny Campbell and Senior Associate Mark Hare report.

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  • Client Update: Life insurance remuneration draft regulations released

    13 April 2016

    The Government has released an exposure draft of the Corporations Amendment (Life Insurance Remuneration Arrangements) Regulations 2016. The draft regulations provide some further detail to support the implementation of the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, which is currently before the Senate. Partner Michelle Levy and Senior Associate Georgia Cleeve report.

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  • Unravelled: Utmost good faith, life insurance and ASIC

    5 April 2016

    This year is the 250th anniversary of one of the most famous insurance cases. The judgment of Lord Mansfield in Carter v Boehm in 1766 is frequently cited as establishing the principle that parties to an insurance contract owe each other duties of utmost good faith.

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  • Unravelled: Bitter Harvest yields fertile ground for MIS reform

    5 April 2016

    Last month, the Senate Economics References Committee handed down its long-awaited report on the structure and development of agribusiness-managed investment schemes. The Committee's inquiry into agribusiness schemes had been instigated in June 2014 by Greens Senator Peter Whish-Wilson. While there had been an earlier Parliamentary Joint Committee inquiry, in 2009, into the high-profile agribusiness MIS collapses, the 2014 inquiry was intended to give the people and the rural communities affected by the MIS collapses a chance to be heard.

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  • Unravelled: Providing digital financial product advice to retail clients

    5 April 2016

    ASIC is consulting on a new regulatory guide for providers of digital financial product advice, or 'robo-advice'. The regulatory guide is intended to help new entrants and existing Australian financial services licence holders. For new entrants and licensees needing a reminder, there is a nice summary of the differences between information (that they are keen on calling 'factual information') and financial product advice, and between personal advice and general advice. ASIC points out that the law is the same whether or not advice is provided in person or by means of a computer program.

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  • Unravelled: Spotting hurdles in the race to market Australian funds in Asia

    5 April 2016

    The introduction of the Asia Region Funds Passport (ARFP) has been in the works for some time. The ARFP was one of the recommendations coming out of the 2009 Johnson Report and aims to provide a basis for cross-border marketing of managed funds in the Asia region. While there has been a tendency to focus on the benefits of the ARFP to consumers and fund managers in isolation, it's a good idea to look at the ARFP in the context of some of the other Johnson Report recommendations that are being discussed, such as reforms to tax law and generally making different investment structures more attractive to investors.

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  • Client Update: ASIC's guidance on conflicts in vertically integrated funds-management businesses

    24 March 2016

    ASIC has released a report looking at the way 'vertically integrated' funds management businesses deal with conflicts of interest. The report summarises the findings of ASIC's recent review of a number of businesses, and sets out some good practice recommendations. Partner Marc Kemp and Senior Associate Simun Soljo look at the report.

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  • Client Update: Government and ASIC announcements for FinTech sector

    23 March 2016

    There were three announcements this week that will serve to bolster the emerging Australian FinTech sector. The Government released a statement in support of FinTech as part of its National Innovation and Science Agenda, while ASIC issued two sets of guidance: an information sheet for providers of marketplace lending products, and draft guidance to providers of digital financial product advice. Partner Gavin Smith, Managing Associate Valeska Bloch, Senior Associate Simun Soljo and Senior Paralegal Connie Ye report.

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  • Client Update: Productivity Commission kicks off inquiry into superannuation

    17 March 2016

    The Productivity Commission has released an issues paper inviting submissions on the criteria that should be used to assess the efficiency and competitiveness of Australia's superannuation system. This will be of interest not only to superannuation trustees but also to service providers, including fund managers, who may be put under greater scrutiny. Submissions are due by 20 April 2016. Partner Michelle Levy and Senior Associate Simun Soljo look at the issues paper.

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  • Client Update: New environmental responsibilities for corporates, officers, financiers and others in Queensland

    16 March 2016

    The Queensland Government proposes new powers to compel related bodies corporate, executive officers, financiers and shareholders, and a select category of 'related persons', to satisfy the environmental obligations of companies operating in Queensland. The Chain of Responsibility concept has been proposed in response to concerns arising from recent events in Queensland such as the difficulties of the Yabulu Nickel Refinery. Partner Bill McCredie and Senior Associate Gobind Kalsi report.

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  • Client Update: Defining the objective of superannuation

    9 March 2016

    The Government released a discussion paper on the Objective of Superannuation today. The paper says that the Government will 'enshrine in legislation' the primary objective recommended by the Financial System Inquiry being: 'To provide income in retirement to substitute or supplement the Age Pension.' Partner Michelle Levy, Senior Regulatory Counsel Michael Mathieson and Senior Associate Georgia Cleeve look at the discussion paper.

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  • Focus: Being 'professional' under D&O insurance policies

    8 March 2016

    In a recent decision, the Full Federal Court has clarified the scope of a ‘professional services’ exclusion in a Directors & Officers insurance policy. Partner Andrew Maher and Senior Associate Andrew Lazzaro report on a case that gives some guidance on the relationship between professional indemnity and D&O insurances.

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  • Unravelled: Dodd Frank - promoting financial stability and other purposes

    7 March 2016

    The Dodd Frank Act is a bit like the US financial system it is trying to regulate – vast, complex and hard to wade through. It creates a bunch of new regulators on top of what was already a pretty solid cast and gives them wide-ranging powers. They can not only set capital and liquidity requirements for banks and make rules about what they can and cannot do, but they can also shut down or sell off parts of their businesses. But are these regulators smart enough or well enough resourced to identify the risks?

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  • Unravelled: Would you like best interests with that? Conflicted remuneration, American style

    7 March 2016

    Last month, we were fortunate enough to host Barney Frank, co-architect of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010, to discuss financial regulation reform. Coincidentally, a couple of weeks later, we were treated to a presentation on US financial regulation reforms by a US lawyer, David W. Powell, at the annual superannuation lawyers' conference. Powell's presentation focussed on US efforts to expand 'fiduciary' duties for financial advisers, including those advising on Individual Retirement Accounts. IRAs now constitute a large chunk of US retirement savings. There are some interesting comparisons to be made between the proposed US rules and existing Australian financial advice laws. But perhaps most interesting of all is the proposed 'best interest contract exemption'.

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  • Unravelled: Transparency and Accountability - and not just for Wall Street

    7 March 2016

    The regulatory law repercussions of the GFC remain endlessly fascinating. As an example, take the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010. It runs to 848 pages. Title VII addresses, perhaps optimistically, 'Wall Street Transparency and Accountability'. My favourite provision is section 716, headed 'Prohibition Against Federal Government Bailouts of Swaps Entities'. This heading suggests that, if there is ever another AIG, it can't be bailed out. Too-big-to-fail solved by legislative prohibition. If only it was that easy.

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  • Focus: You've got to be perfected - Equipment leasing and the PPSA

    7 March 2016

    A recent decision of the Supreme Court of New South Wales has again illustrated the potentially severe consequences for lessors of equipment and other goods under the 'vesting' provisions of the Personal Property Securities Act 2009 (Cth). The lease can be a security interest. If the lessors don't perfect the lease by registration, they can lose the equipment. Partner Kim Reid, Senior Associate Przemek Kucharski and Lawyer Kane Kersaitis report.

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  • Focus: Predictive coding: the future of electronic document production?

    25 February 2016

    A recent decision of the English High Court may pave the way for the use of 'predictive coding' in large scale discovery and regulatory investigations in Australia. Partners Nick Rudge and Duncan Travis, Managing Associate Kate Austin and Associate Emily Giblin look at the benefits and risks of the new software.

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  • Focus: New legislation introduces criminal offences for false accounting

    23 February 2016

    The Federal Government has proposed new legislation that introduces two new criminal offences for false accounting into the Commonwealth Criminal Code. The proposed false accounting offences are designed to help Australia comply with the OECD's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Partner Rachel Nicolson and Senior Associate James Campbell look at the relevance of these developments to your business.

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  • Focus: Australia has lifted certain sanctions on Iran

    18 February 2016

    In response to recent confirmation that Iran has met its international nuclear commitments, the Australian Government has lifted all nuclear-related economic and financial sanctions against that country. Partner Rachel Nicolson, Managing Associate Hilary Birks and Associate Sarah Jenkins report on what has changed and the potential opportunities for Australian businesses.

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  • Focus: Strangers no more - Taking action against an insolvent defendant's insurer

    16 February 2016

    The High Court of Australia has decided that a third party claimant can join an insolvent or potentially insolvent defendant's insurer to proceedings to seek a declaration that the insurer is liable to indemnify the defendant. Partner Andrew Maher and Lawyer Shelley Drenth discuss the decision and its implications. 

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  • Unravelled: Conflicted remuneration, dreaming and the law of common sense

    5 February 2016

    How many times have you heard someone say 'FoFA is settled'. Next time you hear that, you should reach for one of the many quotable quotes from The Castle and 'tell 'em they're dreamin'. First, there are the so-called 'Retail life insurance industry reforms'. Then, get ready for remuneration reforms in the mortgage broking industry. After that will come remuneration reforms in the stockbroking industry. And APRA recently set up a taskforce to examine the remuneration of banking executives.

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  • Unravelled: Crowd-sourced equity funding

    5 February 2016

    The Government has finally begun the process of implementing its policy on crowd-sourced equity funding (CSEF) by introducing a Bill and releasing draft exposure regulations late last year, which envisage the establishment of a CSEF regime in Australia. The Bill has been referred to the Senate Economics Legislation Committee who are expected to report later this month.

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  • Unravelled: Raising professional standards of financial advisers

    5 February 2016

    Following on from the reviews conducted by the Parliamentary Joint Committee and the Financial System Inquiry, the Government delivered on its promises by releasing an exposure draft of the Corporations Amendment (Professional Standards of Financial Advisers) Bill 2015 (the Bill) late last year for consultation. As its title suggests, the draft Bill proposes a number of amendments to the Corporations Act to raise the professional standards of financial advisers that are to apply from 1 July 2017. Many of these reforms impose obligations that licensees in the retail financial advice and superannuation trustees should carefully consider and begin making provision for.

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