Allens

Superannuation

Our experienced Superannuation 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 affecting superannuation. If you'd like to be notified when we add new superannuation 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.

Read about Allens' track record in this dynamic area.

Superannuation Publications

  • 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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  • 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: 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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  • 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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  • 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: 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: 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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  • 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: 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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  • Unravelled: Default superannuation under the microscope

    7 October 2016

    You may be forgiven for thinking the Productivity Commission is fixated on superannuation at the moment. Its latest review centres on developing alternate models of allocating default members to products.

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  • Unravelled: Are super funds and managed investment schemes the next frontier for shareholders with activist agendas?

    7 October 2016

    A recent Federal Court appellate decision highlights the fundamental tension in the Corporations Act between shareholders' power to propose resolutions at members' meetings and the proposition that a company is to be managed by its Board of directors.

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  • Unravelled: Productivity Commission report into superannuation system bodes well for the future

    6 September 2016

    At first glance, the recent Productivity Commission Draft Report on How to Assess the Competitiveness and Efficiency of the Superannuation System (August 2016) could be dismissed as nothing more than a procedural step along the road to the ultimate goal (as recommended by the FSI) of developing an alternative system of allocating default members to superannuation funds. However, to dismiss the Report so easily would belie the wealth of detail contained in it and the quality of research undertaken by the Commission. In particular, much of the value of the Report lies in the numerous observations made on the current state of the industry in its weighty 285 pages.

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  • Unravelled: Financial Services Class Actions

    6 September 2016

    Our class actions team recently published our Class Action Risk 2016 report. The objective of the report is to look behind the headlines and hype that often surrounds class actions to provide a more holistic and objective assessment of class action risk for our clients. This is particularly important in an environment in which the press surrounding class actions has often heralded a developing crisis for Australian business.

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  • Unravelled: Not better late - the Prime Trust appeal judgment

    6 September 2016

    The main Prime Trust appeal judgement is relatively well known, but a trust's responsible entities and their officers should look at what the appeal court had to say on other related matters.

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  • Unravelled: Protecting accrued superannuation benefits from adverse changes

    6 September 2016

    For a long time now, superannuation lawyers have tried to work out the meaning of the following words: 'a beneficiary's right or claim to accrued benefits, and the amount of those accrued benefits, must not be altered adversely to the beneficiary by amendment of the governing rules or by any other act carried out, or consented to, by the trustee of the fund'. Two recent court decisions suggest that that endeavour may be unrewarding.

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  • 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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  • 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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  • 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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  • 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: 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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  • 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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  • 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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  • 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: 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: 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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  • 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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  • 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: 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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  • Client Update: New measures on resilience, collateral protection and client money

    22 December 2015

    The Government yesterday released for consultation draft legislation containing 'resilience and collateral protection' measures. Think payment systems, netting and derivatives. But also think superannuation trustees and life companies investing in centrally-cleared OTC derivatives – and restrictions on charging assets. The Government also released a policy paper on how to make the client money provisions more protective. Partners Tom Highnam and Michelle Levy and Senior Regulatory Counsel Michael Mathieson look at some of main points of the new draft legislation.

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  • Client Update: Superannuation product dashboard and portfolio holdings disclosure draft legislation released

    11 December 2015

    The Federal Government has released an exposure draft of new superannuation legislation and associated regulations, which refine the current rules on portfolio holdings disclosure and product dashboards for superannuation funds. The changes in the portfolio holdings disclosure area particularly (including the extended start date of 31 December 2016) are likely to be welcomed by many and, we think, do a fairly good job of achieving what the Government says they have – ie to 'provide a balance between improving member outcomes and minimising compliance costs for the superannuation industry'. Partner Geoff Sanders and Associate Georgia Cleeve report.

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  • Unravelled: Government launches innovation agenda - now wait for the ideas boom

    8 December 2015

    You might be getting tired of all of the talk about 'innovation', and keen to see some of it actually happen. The Government's recent announcements could help, but there is a long way to go before the 'mining boom' becomes the 'ideas boom'.

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  • Unravelled: FSI outcomes - what will happen and when?

    8 December 2015

    Are you interested in the financial system and how it is regulated? The Federal Government's response to the Financial System Inquiry was recently handed down but it can be hard to work out where, exactly, things are heading. We have put together a table that sets out what is likely to happen and when.

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  • Client Update: Life insurance advice remuneration legislation released

    4 December 2015

    The Government released yesterday an exposure draft of the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2015. The Government says the Bill 'removes the current exemption in the Corporations Act from the ban on conflicted remuneration for benefits paid in relation to certain life risk insurance products'. That statement is not correct. Senior Regulatory Counsel Michael Mathieson explains

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  • Unravelled: What does the Government's response to the FSI mean for banks?

    6 November 2015

    The short answer is: it depends on which kind of bank you are. The Financial System Inquiry's final report and the Government's response mean a lot for ANZ, CBA, NAB and Westpac, particularly given their significant residential mortgage portfolios. They also mean a lot for Macquarie. As for the rest of the banks, they are likely to see the ramifications for the major banks as their own gain.

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  • Unravelled: Government says 'Yes ASIC'

    6 November 2015

    The FSI recommended that the Government 'Introduce an industry funding model for Australian Securities and Investment Commission (ASIC) and provide ASIC with stronger regulatory tools'. This recommendation (No.29) covers two topics that ASIC has pursued on a number of occasions, including in its submissions to the FSI. The first is ASIC's preference to move to an industry funding model; and the second is ASIC's recommendation that penalties under ASIC-administered legislation be increased.

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