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: APRA's guidance on the Protecting Your Super changes

    16 May 2019

    On 8 May, APRA released its answers to some 'frequently asked questions' about the Protecting Your Super changes. I would politely suggest that the questions asked and answered by APRA make up a fairly small subset of the questions that are, in fact, being asked (in some cases very frequently) about the PYS changes. Even so, I would like to say something about some of APRA's answers.

    Read More
  • Unravelled: Compensating superannuation members for 'fees for no advice'

    16 May 2019

    Read More
  • Client Update: APRA releases 'constructively tough' Enforcement Approach

    18 April 2019

    In the wake of the Financial Services Royal Commission (Royal Commission) and the introduction of the Banking Executive Accountability Regime (BEAR), APRA has undertaken a review of its enforcement strategy. The Enforcement Review Final Report (APRA Final Report) and an updated Enforcement Approach have now been released. While the new Enforcement Approach falls short of ASIC's 'why not litigate' approach, it suggests APRA will take a more active and 'constructively tough' approach to enforcement, supported by a new enforcement team.

    Read More
  • Unravelled: Trustees, start your reviewing! Super funds and the 'Member Outcomes Act': what needs doing, and when

    17 April 2019

    The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2019 was first introduced in the Senate in September 2017. One and a half years later, and with significant amendments, the Bill is now an Act, having passed both houses of Parliament and receiving Royal Assent on the same day, 5 April 2019.

    Read More
  • Unravelled: Design and distribution obligations - products caught (or excluded)

    17 April 2019

    Four and a half years after the FSI recommended a 'targeted and principles-based design and distribution obligation', the Design and Distribution Obligations and Product Intervention Powers Act 2019 (the Act) has recently received the Royal Asset. Although the design and distribution obligations will not commence for another two years, it is worth examining some of the financial products that will be caught (or excluded).

    Read More
  • Unravelled: AFCA: The first six months - and the year ahead

    17 April 2019

    The Australian Financial Complaints Authority (AFCA), the new 'one-stop-shop' for resolving financial complaints, has had a very busy first six months of operation.

    Read More
  • Unravelled: Considering Robo-advice

    17 April 2019

    The Australian Financial Complaints Authority (AFCA), the new 'one-stop-shop' for resolving financial complaints, has had a very busy first six months of operation.

    Read More
  • Client Update: ACCC releases draft Consumer Data Right Rules for consultation

    15 April 2019

    In preparation for the implementation of the first phase of the Consumer Data Right on 1 July 2019, the ACCC has released draft CDR Rules for consultation. The draft rules detail how the CDR will function across all designated sectors in practice, including how data is to be shared, the criteria for accreditation, dispute resolution requirements and privacy safeguards. They also contain rules that are specific to the banking sector. This article provides an overview of the draft rules, the key changes made since the release of the Rules Framework in October 2018 and the Rules Outline in December 2018 and the key issues left open for further consideration.

    Read More
  • Unravelled: Superannuation - 'not a product to be sold'?

    18 March 2019

    In his typically blunt way, Commissioner Hayne declared: 'Superannuation is not a product to be sold'. As Mr Hodge QC was fond of saying, I would like to 'tease that out' a little.

    Read More
  • Unravelled: ASIC consultation on fees and costs disclosure reform following expert review

    18 March 2019

    It's been a long five years or so of amendments to, and consultation on, the fees and costs disclosure regime for superannuation and managed investments products. And industry might be forgiven for feeling a sense of déjà vu, with the release earlier this year of ASIC's consultation paper on the regime.

    Read More
  • Focus: ASIC's change of tone in action

    15 March 2019

    ASIC's 'why not litigate?' approach to enforcement activities and its change in tone confirm the new era of regulatory engagement has arrived. Partner Kim Reid, Senior Associate Natalie Oliver and Lawyer Micaela Bassford report

    Read More
  • Client Update: Protecting Your Superannuation Package - what you need to do, and when

    7 March 2019

    Recently passed legislation, part of a package of reforms designed to 'protect Australians' superannuation savings from undue erosion by fees and insurance premiums', introduces a series of important changes that will create challenging implementation timeframes for funds and administrators in the coming months. Partner Geoff Sanders and Lawyer Zoe Chapman report on the effects of the amendments, and what they mean for trustees of superannuation funds.

    Read More
  • Client Update: Amendments to include insurance claims handling in the definition of 'financial services'

    5 March 2019

    The Federal Government has released a consultation paper which takes action on Recommendation 4.8 of the Banking Royal Commission's Final Report. If implemented, the handling and settlement of insurance claims will become a 'financial service' under the Corporations Act 2001 (Cth) and will be subject to oversight by the Australian Securities and Investments Commission (ASIC). Even with careful and staged implementation, such a change would likely cause disruption, and require insurers and service providers to review their services and compliance with the newly imposed obligations. Partner Simun Soljo and Lawyer Virginia Wang report.

    Read More
  • Client Update: ASX Corporate Governance Principles and Recommendations: 4th edition - what do they mean for you?

    1 March 2019

    The 4th edition of the ASX Corporate Governance Principles and Recommendations focuses strongly on the link between culture, values and community expectations, consistent with the themes that emerged from the Royal Commission. Entities should start to take steps now to address the new and revised principles and recommendations. Partners Kate Towey, Robert Pick and Associate Isaac Wall report.

    Read More
  • Client Update: Expanded ban on employer incentives for super - amendment passed in the Senate

    15 February 2019

    The Senate has passed amendments that will greatly expand the scope of the prohibition on trustees and their associates providing incentives to employers in section 68A of the Superannuation Industry (Supervision) Act 1993 (Cth). It will also make the section a civil penalty provision. The amendments will need to be passed by the House of Representatives to become law, but this appears to be imminent, and the expanded prohibition will apply from the day after the Royal Assent - meaning it could begin to apply as early as sometime next week. Trustees and their associates should urgently review how they currently interact with employer-sponsors and prospective employer-sponsors.

    Read More
  • Client Update: Hayne report - first impressions

    5 February 2019

    Commissioner Hayne's recommendations may initially seem somewhat modest - they do not undo vertical integration, impose limits on executive remuneration or ban bonuses and they do not recommend that directors prefer the interests of their customers. But, while it is true that the recommendations are not radical, there is much in the report that will mean some real changes for financial services companies, their Boards and their executives, as well as for their regulators and advisers. The Federal Government has said that it agrees with (or supports) all of the recommendations.

    Read More
  • Unravelled: Productivity Commission's report on superannuation - an odd mix of recommendations

    1 February 2019

    Before we are crushed by a heavy tome on Monday afternoon, I would like to say something about the recommendations in another heavy tome - the Productivity Commission's report on superannuation. The recommendations are an odd mix.

    Read More
  • Unravelled: The future age of AI

    1 February 2019

    We will be able to cease speculation on what is in or not in the Final Report of the Financial Services Royal Commission on Monday evening (or after whatever time it takes to read and digest!).

    Read More
  • Unravelled: Comments invited on proposed retirement income product disclosure

    20 December 2018

    Treasury has released a consultation paper on a new proposed simple, standardised product disclosure document, as part of the Federal Government's framework for Comprehensive Income Products for Retirement. The proposed new disclosure document will sit alongside existing PDS requirements.

    Read More
  • Unravelled: What's ahead for home loans in 2019

    20 December 2018

    As we, and many others, have written over the course of this year, the Royal Commission will bring (and, in fact, already has brought) monumental changes both in how banks are regulated and to the actual laws that apply to them.

    Read More
  • Unravelled: Changes to the FSC Life Insurance Code of Practice

    20 December 2018

    Proposed changes to the FSC Life Insurance Code are afoot and the deadline for comments is fast approaching. The present review of the Code is designed to improve standards in product design, sales, underwriting, customer service, complaints and claim handling

    Read More
  • Client Update: ASIC extends transition period for fees and costs disclosures, and delays consultation paper to January 2019

    14 December 2018

    ASIC has extended the transition periods for certain fees and costs disclosure obligations applicable to superannuation funds and managed investment schemes by a further year, pending the release of its consultation paper on the regime. It has also delayed the expected release date for the consultation paper until January 2019. Senior Associate Stephanie Malon and Lawyer Katerina Dandanis report.

    Read More
  • Focus: A new enforcement landscape for Australian corporations in 2019 and beyond

    10 December 2018

    The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry Interim Report, and a raft of announcements at the federal level over the past 12 months, point clearly to a more robust enforcement environment for corporate Australia in 2019 and beyond. Partner Paul Nicols, Senior Overseas Practitioner Chris Kerrigan and Associate Samantha Naylor Brown report.

    Read More
  • Focus: New APRA prudential standard raises bar for information security obligations and incident notification requirements

    15 November 2018

    As companies and regulators across the world grapple with ever-increasing cyber security threats, Australia's financial services regulator, APRA, has released the final form of a new prudential standard. It will require APRA-regulated entities to establish and maintain information security controls to protect customer data, and to notify APRA of information security incidents that have, or may have, a material effect on customers' interests. This will have significant implications both for regulated entities and for their boards of directors. Partners Gavin Smith and Simun Soljo and Lawyer James Higgins report.

    Read More
  • Unravelled: AFCA's powers and obligations - 'systemic issues'

    13 November 2018

    In his Interim Report, Commissioner Hayne rejected claims that misconduct in the financial services sector was the fault of 'a few bad apples' and did not raise 'broader or systemic concerns'. Commissioner Hayne's comments made me think about AFCA and what it can do (and must do) about 'systemic issues' identified in the course of handling complaints.

    Read More
  • Unravelled: The ins and out (goings) of responsible lending

    13 November 2018

    Very broadly speaking, current legislation relating to responsible lending says that a person must not recommend or make an 'unsuitable' loan to a consumer - an unsuitable loan being one that either does not meet the consumer's requirements and objectives, or imposes repayment obligations that they are unable to meet without substantial hardship.

    Read More
  • Pulse: Cyber security

    17 October 2018

    In this bulletin, we offer a practical guide for navigating cyber security risks in M&A transactions; examine the obstacles that data breach class actions face in Australia and lessons learned from high profile class actions overseas; explore the prevalence of data breaches in the healthcare sector; track the ongoing effects of Yahoo's 2014 data breach; and consider the debate at home and abroad about whether 'hacking back' against cyber criminals is a viable (and legal) option.

    Read More
  • Unravelled: Slater & Gordon begins its superannuation class actions

    11 October 2018

    In our article on competing class actions dated 20 August 2018, we made the fairly obvious observation that the Royal Commission would inevitably prove to be a hot bed for class actions. And in years to come, we will undoubtedly look back on the Royal Commission as a watershed moment in class action history, which, just like the GFC, spawned multiple large and long-running class actions.

    Read More
  • Unravelled: Efficiently, honestly and fairly - overarching and fundamental obligations?

    11 October 2018

    In his recent Interim Report into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne makes a lot of the duties of an Australian financial services licensee and an Australian credit licensee to provide financial services or credit activities, as the case may be, efficiently, honestly and fairly.

    Read More
  • Unravelled: Royal Commission: Round 1 - experiences with consumer lending practices

    2 October 2018

    In examining the topic of consumer lending, the Commission considered issues arising from the sale of credit products – including residential mortgages, car finance and credit cards - by reference to case studies involving the four major banks as well as Aussie Home Loans and Citi.

    Read More
  • Unravelled: Royal Commission: Round 2 - experiences with financial advice

    2 October 2018

    Although the Commissioner says that the Royal Commission is part of the executive and not the judiciary and that he is therefore not able to make any findings of law, he comes pretty close in his views in response to Round 2. And in some important respects, those views do not correspond with conventional views.

    Read More
  • Unravelled: Royal Commission: Round 3 - experiences with SME lending

    2 October 2018

    The third round of the Royal Commission's hearings concerned lending practices to small and medium enterprises (SMEs). The hearings considered a range of case studies.

    Read More
  • Unravelled: Royal Commission: Round 4 - experiences with financial service entities in regional and remote communities

    2 October 2018

    In the Interim Report, the Commissioner identifies four principal issues relating to agricultural lending.

    Read More
  • Client Update: Treasury proposes tougher penalties for corporate and financial sector misconduct

    26 September 2018

    The Federal Government has released exposure draft legislation for public consultation that, if enacted, will implement many of the recommendations of the ASIC Enforcement Review Taskforce to strengthen the penalty regime for corporate and financial sector misconduct. Partner Simun Soljo and Lawyer Roseanna Bricknell take a look at the proposed laws.

    Read More
  • Unravelled: Are CCIVS the beginning of the end for the Unit Trust's monopoly?

    19 September 2018

    Avid, or even occasional, readers of Unravelled over the past few years cannot have failed to notice the Federal Government's proposal to introduce two new forms of collective investment vehicle - each a shiny, tax-neutral alternative to the unit trust which (and note the heavy dose of self-interest here) will hopefully lead to a marked reduction in the sleepless nights and migraines resulting from the task of explaining the finer points of trust law to overseas counterparties and their advisers.

    Read More
  • Unravelled: Close and continuous monitoring - the new ASIC approach of embedding its officers in banks

    19 September 2018

    ASIC has recently announced a new supervisory approach that involves embedding ASIC officers in the four major banks and AMP. The initial media reporting on this approach suggested that it would involve embedding 'teams of up to 20 agents for weeks at a time to sit with bank staff, drop into meetings and trail the CEO, executives and directors to identify misconduct before it arises.'

    Read More
  • Client Update: Competition in electricity and financial services markets - common issues, common solutions?

    30 August 2018

    The level of competition in both the electricity and financial services sectors has been closely scrutinised by the Australian Competition and Consumer Commission and the Productivity Commission. While there are fundamental differences in market structures in both sectors, the respective commissions have identified common concerns and made common proposals to address those concerns.

    Read More
  • Unravelled: Counsel Assisting the Royal Commission alleges significant superannuation misconduct

    27 August 2018

    The list of alleged breaches are divided into breaches of the SIS Act, the Corporations Act and the ASIC Act we consider each of these and what it might mean.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More
  • 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.

    Read More