Allens

Financial Services Regulation

We regularly publish articles on topical financial services (and related) matters. These publications contain commentary and analysis to help financial services providers and other industry professionals keep up-to-date with and have a better understanding of the complex and challenging issues in Australian financial services regulation.

The full list of our publications appears below. If you would like to be notified when we add new financial services publications to the site, please go to our subscription page to sign up for email alerts.

For more information, see also our Financial Services Regulation pages and, in particular, our Breaking News section which is updated regularly for current developments.

Financial Services Regulation Publications

  • Unravelled: Expert review into fees and costs disclosure - further changes ahead

    20 August 2018

    Many of you will be familiar with the long and tortured history of fees and costs disclosure regulation in Australia. The most recent set of issues can be traced back to 2014, when ASIC tried to address what it considered to be gaps in and inconsistent application of the former regime.

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  • Unravelled: Competing class actions - a problem in need of a solution

    20 August 2018

    As fertile ground for class actions, the Royal Commission has highlighted an ongoing problem with Australia's class action regime – there is no clear, consistent means for resolving competing class actions.

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  • Client Update: Design and distribution of financial products - regulating 'retail product distribution conduct'

    30 July 2018

    The revised exposure draft Bill concerning design and distribution obligations for issuers and distributors of financial products, and new intervention powers for ASIC, includes some modest, yet mostly welcome, changes to the December 2017 exposure draft. Senior Regulatory Counsel Michael Mathieson reports.

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  • Unravelled: Update on the Royal Commission

    19 July 2018

    Have you been wondering what the Royal Commission will make of the numerous witness statements and vast amounts of other information collected from superannuation trustees in recent times? You will find out soon enough. But first, there are some curiosities from the Round Four hearings to consider – including a hint as to what the superannuation hearings will include.

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  • Unravelled: Where we are with superannuation retirement income changes

    19 July 2018

    The Government has slowly been changing the superannuation retirement income system, with the aim of increasing the range of retirement products available to Australians. A number of changes have already been implemented, and more are to come with the proposed 'Comprehensive Income Products for Retirement' (CIPRs) regime. We thought it was a good time to take stock and look ahead.

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  • Unravelled: Australian Financial Complaints Authority: a 'one-stop-shop' for financial dispute resolution

    19 July 2018

    The new Australian Financial Complaints Authority is to replace each of the Superannuation Complaints Tribunal, the Financial Ombudsman Service and the Credit and Investments Ombudsman in November 2018.

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  • Unravelled: What might the PC review into superannuation mean for fund investments?

    22 June 2018

    The Productivity Commission Draft Report into the Efficiency and Competitiveness of Australia's superannuation system, weighing in at a substantial 549 pages, contains a treasure trove of information on, and analysis of, a wide range of aspects of the industry.

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  • Unravelled: Update on the Royal Commission

    22 June 2018

    A lot has happened since our most recent update. The Royal Commission has published the submissions received from ASIC and industry participants on policy questions posed by Counsel Assisting at the end of the financial advice hearings. And the small business lending hearings have been held.

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  • Client Update: ASIC overhauls AFS licensing relief for foreign financial service providers

    5 June 2018

    The Australian Securities and Investments Commission has released its highly anticipated consultation paper on licensing relief for foreign financial services providers. The said new licensing regime will be broadly in line with that applied to other AFS licensees, but with relief from some provisions of the Australian Corporations Act and the imposition of certain additional tailored licence conditions. Partner Penny Nikoloudis, Senior Associate Jo Ottaway and Law Graduate Tom Lawson report.

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  • Unravelled: 2018-19 Federal Budget - superannuation

    15 May 2018

    The 2018-19 Federal Budget has introduced a number of proposed superannuation-related changes, with a focus on protecting small balances, young members and existing retirees.

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  • Unravelled: Breach reporting by AFS licensees

    15 May 2018

    In the hurly burly of the Royal Commission’s recent hearings concerning financial advice, you may have missed some very important information about breach reporting by AFS licensees contained in the witness statement prepared by Mr Peter Kell, Deputy Chair of ASIC.

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  • Unravelled: Royal Commission update

    15 May 2018

    The hearings in the Financial Services Royal Commission have been compulsory viewing, not only for financial services industry participants and their regulators and professional service providers. The hearings have exposed wide-ranging actual or alleged wrongful conduct that has captured the attention of politicians, media and the general public.

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  • Pulse: Cyber security

    3 May 2018

    In this bulletin, we give you the rundown on proposed reforms to encryption laws; offer a practical guide to cyber insurance; look at APRA's proposal for a cross-industry framework for information security; give tips for fostering a culture of cyber awareness; examine the key findings from the OAIC's first quarterly report under the new Notifiable Data Breaches Scheme; and look at the steps that governments at home and abroad are taking to combat the growing risk of cyber attacks on critical infrastructure.

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  • Focus: ASIC's sanctions and powers to be strengthened

    23 April 2018

    The Federal Government has announced that it proposes to strengthen ASIC's powers, and to increase the severity of penalties (civil and criminal) that can be imposed on individuals and corporations, in line with the ASIC Enforcement Review Taskforce's recommendations. Partner Rachel Nicolson and Senior Overseas Practitioner Chris Kerrigan report.

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  • Unravelled: Draft code of ethics for financial advisers - in need of much more work

    9 April 2018

    You would be hard pressed to find a bigger load of nonsense than the draft code of ethics for financial advisers issued recently by the Financial Adviser Standards and Ethics Authority.

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  • Unravelled: CCIVs: lost in translation?

    9 April 2018

    The long-awaited Exposure Draft containing the tax treatment of the proposed new corporate collective investment vehicle (CCIV) was released for consultation on 20 December 2017. The CCIV is one of two main proposed solutions to the problem that offshore investors are dissuaded from investing in Australian funds because they do not understand unit trusts. The tax treatment of CCIVs will go a long way to determining their success.

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  • Unravelled: The Royal Commission heats up

    9 April 2018

    The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is well underway, with its first round of public hearings wrapping up less than a month ago. By reference to a number of case studies, the first round of hearings focused on consumer lending practices. In this article, we report on the key themes identified by the Commission as arising from the hearings.

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  • Focus: Trustee insolvency - the Full Federal Court weighs in to the debate

    29 March 2018

    We recently examined the implications of a Victorian Court of Appeal decision on trustee insolvency in the Amerind Appeal1. As we foreshadowed, the Full Federal Court has just released its decision on similar issues.2 It came to a similar position to the Victorian court in deciding that trust assets should be applied first in paying employees and other statutory preferred creditors (though for varied reasons). But it came to the opposite position in holding that trust assets could only go to trust creditors, not non-trust creditors. That finding will cheer lenders and others dealing with trusts, but leaves a confused landscape. Partner Philip Blaxill, Senior Finance Counsel Diccon Loxton and Associate Lucas Tan report.

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  • Client Update: Parliamentary Committee reports on the life insurance industry

    28 March 2018

    The Parliamentary Joint Committee on Corporations and Financial Services has published its report on the life insurance industry. The report includes a nice summary of previous 'inquiries, reviews, reforms and events' since 2013. The Committee appears to think that all of these previous efforts have been more or less inadequate. Senior Regulatory Counsel Michael Mathieson reports.

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  • Unravelled: Preparing a target market determination for a financial product

    21 March 2018

    As the 'design and distribution' obligations for issuers and distributors of financial products inch closer, there is a good deal of hand-wringing taking place. Much of it concerns what a target market determination should look like. Guidance from the European Securities and Markets Authority on MiFID II provides a sense of what local issuers may be in for. But first - Treasury's proposal.

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  • Unravelled: Personal advice and the best interests duty

    21 March 2018

    There has been a great deal of attention given to the meanings of 'financial product advice' and 'personal advice' in the Corporations Act and many of us are eagerly waiting to see what Justice Gleeson will say about the topic in the case ASIC has brought against the BT trustees. However, whatever Her Honour decides in that case, it is unlikely to help very much, because the line between general advice and personal advice will always turn on the facts and, where the facts change with each interaction with a customer or client, it will continue to be difficult for licensees to be confident that they and their representatives are not giving personal advice. While that is a pity, it is, in my view, a greater pity that more licensees are not prepared to take the plunge and give personal advice. If licensees assumed that their interactions with customers and clients about financial products was personal advice, the difference between general advice and personal advice would not matter much.

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  • Focus: Statutory priority of secured creditors and trustee insolvency: implications of Re Amerind appeal decision

    13 March 2018

    The recent unanimous Victorian Court of Appeal decision1 in an appeal from Re Amerind has been widely welcomed by insolvency practitioners and others, as it brought some clarity to the question of whether the statutory order of priority applies to trust creditors. However, not all aspects of the decision will be as widely welcomed. In particular, in favouring a previous controversial decision of the court suggesting that trust assets should be applied in paying non-trust creditors, the Court of Appeal has resurrected a longstanding debate. Trust creditors and beneficiaries will be concerned if it is followed. Further, though insolvency practitioners and statutory preferred creditors will be generally pleased by the court's adoption of a wide interpretation of what is a 'circulating security interest' for the purpose of determining statutory priorities, it will concern secured creditors. Partner Philip Blaxill, Senior Finance Counsel Diccon Loxton and Associate Lucas Tan reflect on the decision and its ramifications.

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  • Pulse: Cyber security

    21 February 2018

    In this bulletin, we shine a light on the incoming Notifiable Data Breaches Scheme. We assume that with the scheme taking effect this week, you're now across the basics (if not, you can read about them here and here). So, this issue highlights the things you didn't know that you need to know, how to deal with data breaches involving multiple organisations, the key takeaways from the Office of the Australian Information Commissioner's just-published Data breach preparation and response guide and our quick reference guides to preparing a data breach response plan, determining when you've suffered an eligible data breach and how to notify when you have.

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  • Unravelled: Superannuation reform - the year ahead in 2018

    20 February 2018

    2017 was a busy year in superannuation. The Allens superannuation team takes stock of the legislative and regulatory reform proposals that have been mooted for 2018 and gazes into the crystal ball to see what might lie ahead this year.

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  • Unravelled: Productivity Commission releases draft report on competition in the financial system

    20 February 2018

    The Productivity Commission's draft report on competition in the financial system, released earlier in February, makes 25 draft recommendations, a key focus of which are reforms to the regulatory system. We take you through the key issues and recommendations.

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  • Client Update: Financial advice - vertically integrated institutions and conflicts of interest

    25 January 2018

    ASIC has released its report on financial advice provided by 'vertically integrated institutions', which is likely to be read with great interest by Commissioner Hayne and his team. Senior Regulatory Counsel Michael Mathieson and Partner Michelle Levy report.

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  • Pulse: Cyber security

    22 January 2018

    In this issue, we shine a light on ransomware – what it is, how it works, how much it costs, the continuing effects of recent attacks, and the key considerations to keep in mind when deciding whether to concede to a ransomware hacker’s demands. We also look at how data breaches might trigger a listed company’s continuous disclosure obligations, the OAIC’s investigation into Precedent Communications, and the Australian Cyber Security Centre’s 2017 Threat Report.

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  • Client Update: Financial products - design and distribution obligations and product intervention powers

    22 December 2017

    After a gestation period roughly one-and-a-half times as long as that of an elephant, the proposed new design and distribution obligations for financial products, and intervention powers for ASIC, took their first, tentative steps yesterday, with the release of exposure draft legislation. The consultation period is not so long - you have until 9 February 2018 to make a submission. Senior Regulatory Counsel Michael Mathieson reports.

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  • Unravelled: A Commission of Inquiry - of the Royal, not the Parliamentary, kind

    19 December 2017

    Since the announcement of the Royal Commission into, ahem, financial services, much has been written and said – a lot of which suggests that little attention is being paid to the terms of reference. In this article I take a look at those terms.

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  • Client Update: Strengthening member outcomes in superannuation - APRA's proposals

    15 December 2017

    APRA this week released a discussion paper and draft prudential standards and practice guides. The standards and guides will apply to all RSE licensees from 1 January 2019. As Partner Michelle Levy and Senior Regulatory Counsel Michael Mathieson report, they will lead to significant changes across the superannuation industry.

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  • Client Update: Updated guidance on conflicted remuneration and other banned benefits

    7 December 2017

    Earlier today, ASIC released an updated version of Regulatory Guide 246, concerning conflicted remuneration and other banned benefits such as volume-based shelf-space fees. The changes are largely to address the life insurance remuneration reforms, which take effect on 1 January 2018. But there are other changes too, some of them reasonably significant. Partner Michelle Levy and Senior Regulatory Counsel Michael Mathieson report.

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  • Client Update: BEAR Bill implementation date likely to change

    24 November 2017

    This afternoon, the Senate Standing Committee on Economics released their report on the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2017 (BEAR Bill). The Economics Committee recommends that the BEAR Bill be passed but recommends the commencement date be pushed out for 12 months from the date of enactment.

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  • Unravelled: The BEAR has dropped, where to from here?

    9 November 2017

    The commencement date of the BEAR legislation is fast approaching and institutions should start planning how to comply with the regime. We look at the changes made to the BEAR legislation following industry submissions, the timing for implementation and key steps to take.

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  • Unravelled: The beginning of the end of the unit trust's monopoly? CCIV legislation and ASIC guidance

    9 November 2017

    Avid readers of Unravelled over the past few years cannot have failed to notice that there are moves afoot to introduce two new forms of collective investment vehicle, each promising a shiny, tax-neutral alternative to the unit trust and, hopefully, saving Australian lawyers a lot of sleepless nights and migraines attempting to explain the finer points of trust law to overseas counterparties and their advisers.

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  • Client Update: First civil penalty order for breach of FOFA duties

    6 November 2017

    The Federal Court recently imposed a $1 million civil penalty on a licensee for breaches by its representatives of the best interests and appropriate advice duties. The penalties were the same amount that was agreed between ASIC and the licensee. The decision is a reminder to financial services licensees that they are responsible for their advisers' advice and that ASIC can and will take enforcement action against licensees when it identifies breaches of personal advice duties. Partner Michelle Levy, Associate Katie Gardiner and Lawyer Jamil Diu report.

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  • Client Update: ASIC recommends tougher corporate penalties

    24 October 2017

    The ASIC Enforcement Taskforce's latest consultation paper pushes for a tougher penalty regime for corporate and financial sector misconduct, which has been key focus of the Taskforce's Terms of Reference, and indeed of ASIC's reform agenda for some time. Partner Belinda Thompson, Senior Associate Michela Agnoletti and Associate Katie Gardiner look at what the consultation paper proposes.

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  • Focus: The Asia Region Funds Passport begins to take shape

    17 October 2017

    It's been a busy few months for the development of the Asia Region Funds Passport. In late August, the Federal Government released exposure draft legislation to accommodate the introduction of the Passport in Australia. Once implemented, the Passport will allow fund managers from participating economies to market and sell interests in qualifying funds to retail investors in other passport jurisdictions within a streamlined regulatory framework. Partner Penny Nikoloudis, Senior Associate Rebecca Sheehy and Associate Mai Go report on the proposed multilateral regulatory framework for the Passport and some of the issues arising from the exposure draft legislation. 

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  • Pulse: Cyber security

    16 October 2017

    In this issue we look at how to create a cyber resilient supply chain, ASIC's renewed focus on cyber resilience, how the incoming GDPR could affect you, medical device cyber security and patient safety, lessons learnt from Yahoo's data breach disaster and Australia and the EU's new cyber security plans.

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  • Unravelled: Pseudo-investments and mobile apps - a new frontier for regulators

    4 October 2017

    It is hardly surprising that the Australian Securities and Investments Commission (ASIC) has taken an interest in the mobile app market, given that there has been an aggressive expansion into the mobile space by financial services providers. ASIC has recently cracked down on web and mobile based OTC derivative providers, and apps that facilitate binary options trading (BOT apps). In this article, we focus on issues that arise in connection with BOT apps.

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  • Unravelled: FX global code update

    4 October 2017

    The FX Global Code was launched in Australia earlier this year and applies to 'market participants', including most financial institutions, bank asset managers, brokers and E-trading platforms. The Code sets out 55 best practice principles and, although compliance is voluntary, it is expected that these principles will become the standard for the FX market industry.

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  • Unravelled: Spring overhaul of Australia's market licensing regime

    4 October 2017

    Australia's market licensing regime has long been crying out for an overhaul, with regulatory guidance that largely dates back to the early 2000s struggling in the face of significant developments in financial markets since then. Fortunately, ASIC has taken heed and is due to release an updated market licensing regulatory guide this month. If the draft guidance is anything to go by, we should soon see a much more modern and flexible approach to market licensing.

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  • Client Update: Blockchain reaction update - ASIC joins chorus on ICO regulation

    3 October 2017

    While ASIC has published information on the issue of coins or tokens in initial coin offerings, other regulators around the world have also been issuing guidance, with some taking a much more restrictive approach. Although Australia remains a relatively friendly regulatory environment for such offerings, there are a number of potential regulatory traps, both here and overseas, that issuers should carefully consider before launch. Managing Associate Simun Soljo, Senior Associate David Rountree and Lawyer Chris Walsh report.

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  • Client Update: The BEAR roars into action

    26 September 2017

    The Federal Government has released the exposure draft of the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill, together with a draft Explanatory Memoradum. This follows on from the release of the Banking Executive Accountability Regime (BEAR) consultation paper in July which raised eyebrows with its short three-week consultation period. The exposure draft only provides five working days for interested parties to lodge a submission. This is a clear indication of the Government's desire to implement BEAR swiftly. Partner Michelle Levy and Senior Associates Sarah Burgemeister and Brenton Pollard report.

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  • Unravelled: APRA's new powers in superannuation - A worthy idea, but checks and balances required

    12 September 2017

    APRA is in line to get significantly increased powers of direction in respect of RSE licensees and their 'controlled entities' as part of the package of superannuation reforms announced in the Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017.

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  • Unravelled: Extraordinary new power proposed for APRA

    12 September 2017

    The exposure draft of the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017, will, if passed, give new powers to the Australian Prudential Regulation Authority in relation to the authorised non-operating holding company and other related bodies corporate of APRA-regulated entities (including foreign regulated entities).

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  • Pulse: Cyber security

    5 September 2017

    In our first issue we look at the outcome of the OAIC's investigation into the Australian Red Cross data breach, lessons learnt from one of the largest cyber attacks in history, directors' liability in relation to cyber resilience, the incoming mandatory data breach notification regime, the NSW Government's recent $11.4 million investment to help tackle critical technology challenges including cyber security, and the Federal Government's new mission to decode cyber vernacular

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  • Unravelled: Productivity Commission on super system competitiveness and efficiency

    7 August 2017

    With all the media attention on the Government's surprise announcement of its proposed package on improving accountability and member outcomes in super last week, you would be forgiven if the Productivity Commission's latest issues paper on competitiveness and efficiency in the super system had slipped under your radar.

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  • Unravelled: Approved product lists and FoFA adviser duties

    7 August 2017

    The FoFA duties that apply to personal advice given to retail clients have been operating for over four years now. ASIC has enjoyed some recent success in the courts in cases brought on the basis of those duties. In this context, it is worth revisiting approved product lists and whether they assist, or impair, compliance with the FoFA duties.

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  • Unravelled: Australian Government proposes new foreign bribery offences

    7 August 2017

    Australia's lack of enforcement of foreign bribery legislation has attracted increasing criticism in recent years, but the Federal Government is expected to soon table legislation proposing wide-ranging reforms. We look at two key proposed changes for Australian companies.

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  • Client Update: Improving accountability and member outcomes in superannuation?

    25 July 2017

    The Federal Government's proposed new superannuation legislation imposes significant new obligations on RSE licensees and could have a material effect on shareholders. The Allens Superannuation team reports on the key changes.

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