Australia
Legislative and Regulatory Amendments
- Australian Securities and Investments Commission (ASIC)
Final Rules and New Information for the Financial Accountability Regime
ASIC and the Australian Prudential Regulation Authority (APRA) have published new information to help insurers and superannuation trustees prepare for the commencement of the Financial Accountability Regime (FAR). The FAR already applies to the banking industry and takes effect for the insurance and superannuation industries from 15 March 2025. It imposes a strengthened responsibility and accountability framework to improve the risk governance cultures of APRA-regulated entities, their directors, and most senior executives.
Date of Release: 11 Jul 2024
Implementation on: 15 Mar 2025
Applicable to: Insurers and Superannuation Trustees
MOU between ASIC and OAIC to Accelerate Data and Privacy Breach Responses
ASIC and the Office of the Australian Information Commissioner (OAIC) have signed a Memorandum of Understanding (MoU) for the sharing of data and privacy breach information. The MoU allows for information sharing, enabling the two agencies to proactively share information for the purposes of exercising powers or performing functions, and in response to written requests.
Date of Release: 19 Jul 2024
Implementation on: 19 Jul 2024
Applicable to: Regulated Entities
Release of Equity Market Cleanliness Snapshot Report 786 July 2024
ASIC released its latest market cleanliness report. The report indicates that Australia’s equity markets maintain a high level of integrity and consistently rank among the cleanest in the world. It details ASIC’s enforcement track record in detecting and prosecuting insider trading matters and information leaks prior to material, price-sensitive announcements, and sets expectations for firms to protect confidential information.
Date of Release: 24 Jul 2024
Implementation on: N/A
Applicable to: Equity Markets
Further Extension of Transitional Relief for Foreign Financial Services Providers
ASIC announced an extension of the transitional relief for Foreign Financial Services Providers (FFSPs) from the requirement to hold an Australian Financial Services (AFS) licence when providing financial services to Australian wholesale clients for a further 12 months. To provide certainty for FFSPs that are currently relying on ASIC relief, ASIC extends this transitional relief until 31 March 2026. After this date, FFSPs will be required to notify ASIC of their intention to rely on the new licensing exemption regime, unless they choose to opt in by notifying ASIC earlier.
Date of Release: 31 Jul 2024
Implementation on: 31 Mar 2025
Applicable to: Foreign Financial Services Providers
MOU between ASIC and State Securities Commission Viet Nam
ASIC announced that it has signed its first Memorandum of Understanding (MoU) with the State Securities Commission (SSC) Viet Nam in Sydney to support information sharing arrangements under a formalised capacity building program supported by the Department of Foreign Affairs and Trade (the Program). The Program is focused on strengthening technical cooperation in the regulation and supervision of securities markets, information sharing, and other areas of mutual interest supporting fair, orderly, and transparent markets.
Date of Release: 5 Aug 2024
Implementation on: 2 Aug 2024
Applicable to: Securities Markets
ASIC published financial advice update, which is a round-up of regulatory developments and issues affecting financial advice. It covers all areas of financial advice regulation and includes a broad range of content relevant to AFS licensees who are advice licensees and financial advisers. The topics included in the update: (i) maintaining accurate records on the financial advisers register; (ii) assessing adviser qualifications; (iii) ASIC’s review of cold calling for superannuation switching business models; (iv) cyber security – third-party exposure; (v) financial adviser registration; (vi) Report 779 Superannuation and choice products: What focus is there on performance?; (vii) provisional relevant providers; and (viii) keeping up to date with financial advice news.
Date of Release: 9 Aug 2024
Implementation on: N/A
Applicable to: AFS Licensees who are advice licensees and financial advisers
Anti-scam Practices of Banks outside the Four Major Banks
ASIC released a report into the anti-scam practices of 15 banks outside the four major banks. Report 790 Anti-scam practices of banks outside the four major banks (REP 790) examined the scam prevention, detection and responses of these 15 banks. The report highlighted issues including significant variability in the maturity of scam strategies and governance, inconsistent and narrow approaches to determining liability, and a lack of support for scam victims.
Date of Release: 20 Aug 2024
Implementation on: N/A
Applicable to: Banks
Expansion of Strategic Priorities for Coming 12 Months
ASIC announced that Australia’s public and private markets and emerging financial products will form a new pillar of ASIC’s expanded strategic priorities, as outlined in ASIC’s latest Corporate Plan.
Date of Release: 22 Aug 2024
Implementation on: N/A
Applicable to: Public and Private Markets
Action on Misleading Claims to Deter Greenwashing Misconduct
ASIC published Report 791 ASIC’s interventions on greenwashing misconduct: 2023–2024 (REP 791). The report outlines the range of interventions that ASIC has made to address greenwashing misconduct. The report also details findings, recommendations and good practice examples from its surveillance activities from 1 April 2023 to 30 June 2024. ASIC’s greenwashing surveillance activities covered a broad range of sectors, including listed companies, managed funds, superannuation funds and the wholesale green bond market. ASIC urges entities to consider the findings and recommendations in this report as well as Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products and Report 763 ASIC’s recent greenwashing interventions to reduce the risk of greenwashing.
Date of Release: 23 Aug 2024
Implementation on: N/A
Applicable to: Listed Companies, Managed Funds, Superannuation Funds and the Wholesale Green Bond Market
Pilot Portal for AFS Licence Applications
ASIC announced that it is piloting a new digital portal for licensing, which includes the ability to apply for, maintain, and vary AFS licences. The new AFS license portal simplifies and streamlines the digital application experience. It provides a user-friendly and streamlined experience by pre-filling information already known to ASIC, and only presenting questions relevant to each applicant’s application.
Date of Release: 28 Aug 2024
Implementation on: Scheduled to go live in the first quarter of 2025
Applicable to: AFS Licensees
Enforcement and Regulatory Update
ASIC released its “Enforcement and Regulatory Update” report, which sets out recent outcomes in enforcement and regulation from 1 January and 30 June 2024. In the first half of the year, the report highlights that ASIC was successful in 95% of its civil and criminal prosecutions, securing $32.2 million in civil penalties and nine criminal convictions. It also notes that ASIC launched 63 new investigations, commenced 12 new civil proceedings and completed 550 surveillances throughout the period.
Date of Release: 9 Sep 2024
Implementation on: N/A
Applicable to: Banking and Superannuation Sector
Distribution Practices of Product Issuers for DDO Compliance
ASIC released its findings of its surveillance of 19 issuers of high-risk investment, insurance and credit products between October 2023 and August 2024 in Report 795 “Design and distribution obligations: Compliance with the reasonable steps obligation.” The report provides a snapshot of compliance with the design and distribution obligations across multiple industries and products. ASIC’s review revealed that many issuers had limited due diligence arrangements to assess and monitor third party distributors, some issuers of high-risk products were relying on broad search terms in online marketing, many issuers used poor quality consumer questionnaires, and only a few issuers monitored consumer outcomes and product performance. In addition, ASIC released minor updates to Regulatory Guide 274 “Product design and distribution obligations” (RG 274) to provide greater clarity around ASIC’s guidance on the appropriateness requirement for Target Market Determinations (TMDs). The changes to RG 274 will not require product issuers to update their TMDs.
Date of Release: 10 Sep 2024
Implementation on: 10 Sep 2024
Applicable to: Product Issuers
Expansion of Operational Resilience Guidance for Market Participants
ASIC released a letter to market participants outlining technological and operational resilience guidance, clarifying how to identify critical business services and notification of a major event. The guidance relates to the technological and operational resilience requirements detailed in Chapters 8A and 8B of the ASIC Market Integrity Rules (Securities Markets) 2017 and ASIC Market Integrity Rules (Futures Markets) 2017.
Date of Release: 17 Sep 2024
Implementation on: 17 Sep 2024
Applicable to: Market Participants
ASIC issued a media release to remind large Australian businesses and financial institutions of their mandatory climate reporting obligations, which will take effect from 1 January 2025. This follows the passage of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) in Parliament on 9 September 2024, which received Royal Assent on 17 September 2024. The mandatory climate reporting requirements will be phased in over the next three years across three groups of reporting entities, with the first reporting cohort required to prepare annual sustainability reports for the financial year commencing on or after 1 January 2025. The second and third reporting cohorts are required to prepare annual sustainability reports for the financial years commencing on or after 1 July 2026 and 1 July 2027 respectively. To assist reporting entities, ASIC has established a dedicated sustainability reporting page on its website to provide information about the new regime and how it will be administered. Furthermore, ASIC will consult with stakeholders on issuing new and/or updated regulatory guidance to assist them in complying with their sustainability reporting obligations.
Date of Release: 18 Sep 2024
Implementation on: 1 Jan 2025 (for first cohort)
Applicable to: Australian businesses and Financial Institutions
New Powers under Financial Market Infrastructure Reforms
ASIC issued a media release to inform the market about its new powers resulting from the passage of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 in Parliament and the receipt of Royal Assent on 9 September 2024 and 17 September 2024, respectively. The new Australian Financial Market Infrastructure (FMI) laws strengthen the existing regulatory regime, ensuring that ASIC and the Reserve Bank of Australia (RBA) have strong and dependable powers to monitor, manage, and respond to risks related to FMIs. As a next step, ASIC will collaborate with the RBA to develop and provide information and guidance on the use of these new powers.
Date of Release: 19 Sep 2024
Implementation on: 17 Sep 2024
Applicable to: Financial Market Infrastructure
Regulatory Guide 121 on Doing Financial Services Business in Australia
ASIC reissued Regulatory Guide 121 Doing financial services business in Australia (RG 121) to provide the latest guidance to individuals and companies from outside Australia that wish to conduct a financial services business in Australia. This version replaces guidance issued in June 2013. RG 121 has been reissued to: (i) remove references to expired or repealed AFS licencing relief, including class relief granted by ASIC to FFSPs and foreign collective investment schemes; (ii) amend descriptions of AFS licensing exemptions and relief to reflect those currently available; (iii) update the description of the Courts’ interpretation of ‘carrying on a business in Australia’, such as the general indicators of carrying on a business, other relevant factors and when a one-off transaction may amount to the carrying on of a business; and (iv) update descriptions of, or references to, financial products and services, obligations of AFS licensees, legislation administered by ASIC, other applicable rules and legislation, and ASIC’s regulatory documents to reflect the current legal and regulatory framework.
Date of Release: 20 Sep 2024
Implementation on: 20 Sep 2024
Applicable to: Financial Services Business in Australia
Extension of Reportable Situations Relief and Personal Advice Record Keeping Requirements
ASIC announced the extension of ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716, ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801, and ASIC Class Order 14/923 Record-keeping obligations for Australian financial services licensees when giving personal advice (the “Former Instruments”) following its consultation that ended on 4 September 2024. The Former Instruments provide relief from reporting requirements for the reportable situations regime, and to prescribe record keeping requirements for personal advice situations. ASIC concluded that the Former Instruments were operating efficiently and effectively and continue to form a necessary and useful part of the legislative framework. The Former Instruments were extended on the same terms for five years (October 2029).
Date of Release: 24 Sep 2024
Implementation on: 23 Sep 2024
Applicable to: AFS and Credit Licensees
Extension of Consultation Agreement with Financial Markets Standards Board
ASIC announced two-year extension of its Consultation Agreement (Agreement) with the Financial Markets Standards Board (FMSB) to 25 September 2026. ASIC and FMSB first signed the Agreement in September 2022 to promote global standards for fair and effective wholesale financial markets, and to formalise ASIC’s active interest in the development of global industry standards. The two-year extension to the Agreement will further facilitate FMSB’s consultation with ASIC in the development of draft standards and other publications and provide ASIC with periodic updates on FMSB’s strategy.
Date of Release: 26 Sep 2024
Implementation on: 26 Sep 2024
Applicable to: Wholesale Financial Markets
Expiry of Instrument for Primary Production Managed Investment Schemes
ASIC announced that the specific requirements relating to land used in primary production managed investment schemes under ASIC Corporations (Land Holding for Primary Production Schemes) Instrument 2024/15 will no longer apply from 1 October 2024. The instrument imposed minimum standards that a responsible entity must meet in relation to the holding of certain interests in land for certain types of registered managed investment schemes. ASIC has decided that the specific requirements for primary production schemes covered by this instrument are no longer necessary
Date of Release: 26 Sep 2024
Implementation on: 1 Oct 2024
Applicable to: Registered Managed Investment Schemes
Updates to the Guidance for Participants in the Carbon Market
ASIC released its updated regulatory guidance for carbon market participants in Regulatory Guide 236 Do I need an AFS licence to participate in carbon markets? (RG 236). RG 236 provides guidance for participants in the carbon markets, including people involved in the Australian Carbon Credit Unit (ACCU) scheme, responsible emitters for safeguard facilities, market intermediaries and advisers to participants in the carbon market. As the name suggests, the guidance will assist participants in carbon markets in deciding whether they need an AFS licence to engage in activities associated with participation in the carbon market. The updates to RG 236 are to address the safeguard mechanism reforms that commenced on 1 July 2023 and reflect changes to the ACCU Scheme that have occurred since RG 236 was last re-issued in May 2015.
Date of Release: 30 Sep 2024
Implementation on: 30 Sep 2024
Applicable to: Participants to the Australian Carbon Markets
Extension of Relief for Employee Redundancy Funds
ASIC announced the extension of existing relief granted to operators and promoters of employee redundancy funds from the AFS licensing and managed investment provisions of the Corporations Act for a transitional period of 18 months. Under the transitional relief, entities relying on the relief will be required to notify ASIC. Existing entities relying on the relief will need to notify ASIC by 31 October 2024. This will assist to ensure all fund operators can be contacted in connection with the upcoming consultation. Entities can notify ASIC of their reliance on the relief by emailing ASIC at rri.consultation@asic.gov.au.
Date of Release: 30 Sep 2024
Implementation on: 1 Oct 2024
Applicable to: Operators and Promoters of Employee Redundancy Funds
- Australian Prudential Regulation Authority (APRA)
Oversight of Retirement Strategy Implementation
APRA and ASIC are calling on superannuation trustees to boost efforts to track and measure the impact of their strategies to improve retirement outcomes for members. A recent pulse check has shown that while trustees have made good progress, some significant gaps remain a year after a joint APRA and ASIC thematic review identified a lack of urgency by trustees in embracing the intent of the Retirement Income Covenant.
Date of Release: 2 Jul 2024
Implementation on: N/A
Applicable to: Superannuation Trustees
Core Prudential Standard to Support Outcomes for Members in Superannuation
APRA has enhanced a core prudential standard governing strategic planning and member outcomes in superannuation. The updated Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) and related guidance reinforce trustees’ duty to act in the best financial interests of members. The changes ensure members’ interests are front-and-centre in trustees’ strategic and business planning, financial resource management, implementation of the retirement income covenant and fund transfers.
Date of Release: 4 Jul 2024
Implementation on: 1 Jul 2025
Applicable to: Superannuation Trustees
APRA has released a response to consultation on proposed minor amendments to the prudential framework for Authorised Deposit-taking Institutions (ADIs) and general, life and private health insurers. The response letter is issued following the release of the proposed updates for consultation in April 2024.
Date of Release: 17 Jul 2024
Implementation on: Refer to the effective dates indicated in the list of standards or guidance proposed to be updated
Applicable to: ADIs and General, Life and Private Health Insurers
Completion of the Program to Modernise the Prudential Architecture
APRA has delivered its multi-year project to Modernise the Prudential Architecture (MPA), with the publication of the final version of its new digital Prudential Handbook. The new Prudential Handbook, which was released in beta version last month, brings together all of APRA’s prudential standards, prudential practice guides and relevant supporting information into one place. The digital format ensures the Prudential Handbook can be easily navigated and caters to a range of different users across regulated industries and in the broader community.
Date of Release: 23 Jul 2024
Implementation on: N/A
Applicable to: Banks, Insurers, and Superannuation Trustees
Release of the Annual Private Health Insurance Coverage Survey
APRA has released its annual Private Health Insurance Coverage Survey publication for the December 2023 reference period. It provides a snapshot of the number of people, by age, gender and state, with hospital treatment cover in December each year.
Date of Release: 25 Jul 2024
Implementation on: N/A
Applicable to: Private Health Insurance Sector
Further Insights on Common Cyber Control Weaknesses
APRA has shared further insights and guidance on common cyber control weaknesses. This letter is part of APRA's ongoing commitment to supervising cyber resilience across industry and follows the previous letter on the security and adequacy of back-ups. The letter details the common issues observed in terms of security in configuration management, privileged access management and security testing.
Date of Release: 15 Aug 2024
Implementation on: 15 Aug 2024
Applicable to: Regulated Entities
New Cross-Industry Prudential Standard CPS 001 Defined Terms
APRA has finalised the new cross-industry Prudential Standard CPS 001 Defined terms (CPS 001). The new standard consolidates all existing standards on definitions for ADIs and general, life and private health insurers.
Date of Release: 22 Aug 2024
Implementation on: 1 Oct 2024
Applicable to: ADIs and General, Life and Private Health Insurers
New Priorities in 2024-25 Corporate Plan
APRA has published its latest Corporate Plan outlining how it will maintain the strength and stability of Australia’s banks, insurers and superannuation trustees over the next four years. In addition to APRA’s strategic priorities, this latest Corporate Plan incorporates – for the first time – APRA’s annual policy and supervision priorities, as well as a new inclusion of data priorities.
Date of Release: 28 Aug 2024
Implementation on: 28 Aug 2024
Applicable to: Banks, Insurers, and Superannuation Trustees
Internal Reorganisation of APRA
APRA announced some changes to its internal structure designed to ensure it remains equipped to deal with emerging and future challenges. The most significant change will see APRA move to having its five industry supervision groups being managed in two supervision divisions instead of the current three frontline supervision divisions – Banking, Superannuation and Insurance (encompassing general, life and private health insurance). From 2 September 2024, the two frontline supervision divisions will be a General Insurance and Banking division and a Life Insurance, Private Health Insurance and Superannuation division.
Date of Release: 28 Aug 2024
Implementation on: 2 Sep 2024
Applicable to: Banks, Insurers, and Superannuation Trustees
Release of APRA's Response to Consultation on Enhancements to Superannuation Data Collections
APRA has issued a response to the recent consultation on enhancements to superannuation data collections relating to indirect investment costs and trustee financial statements reporting. APRA’s response to the consultation feedback has been divided into two releases in order to prioritise the data required on investment costs and financial statements. APRA will release a second response package later this year, covering the remaining topics.
Date of Release: 20 Sep 2024
Implementation on: Please refer to the commencement dates indicated in the attached documents
Applicable to: Superannuation Sector
- The Reserve Bank of Australia (RBA)
Assessment of ASX Clearing and Settlement Facilities
RBA released the 2024 Assessment of the ASX Clearing and Settlement (CS) Facilities. This assesses the performance of the ASX CS Facilities against the Bank’s Financial Stability Standards (FSS). The ASX CS facilities were rated as having ‘observed’ or ‘broadly observed’ many of the individual FSS. However, RBA assessed that the CS facilities ‘partly observed’ requirements under the specific FSS on Governance, Framework for the Comprehensive Management of Risks, and Operational Risk. Consistent with these ratings, RBA’s assessment considers that the key areas of concern for ASX continue to be technology and cyber risks, and risk management.
Date of Release: 25 Sep 2024
Implementation on: N/A
Applicable to: CS Facility Licensees
- Council of Financial Regulators (CFR)
Climate Change Activity Stocktake 2024
The Council of Financial Regulators Climate Working Group (CFR CWG) issued a paper outlining the activities carried out during the financial year ended Jun 2024 and the planned work for the 2024/2025 financial year. The CFR CWG’ work for the 2023/2024 financial year focused on: (i) exploring the impact of climate change through scenario analysis, monitoring climate-related trends in domestic financial markets, and enhancing climate modelling capability; (ii) improving transparency and consistency of sustainability-related information by promoting good governance, disclosure, and compliance with existing laws while progressing the implementation of internationally aligned climate-related financial disclosure requirements; (iii) supporting the development of an Australian sustainable finance taxonomy; and (iv) continuing Australia's domestic and international engagement on sustainable finance.
Date of Release: September 2024
Implementation on: N/A
Applicable to: Financial Industry
Consultations
- Australian Securities and Investments Commission (ASIC)
Sunsetting of ASIC Corporations (Land Holding for Primary Production Schemes) Instrument 2024/15
ASIC announced its proposal to allow the sunsetting of ASIC Corporations (Land Holding for Primary Production Schemes) Instrument 2024/15 on 1 October 2024. It is noted that the relief for primary production schemes covered by this instrument may no longer be required by the managed fund sector. On this regard, AFS licensees, superannuation trustees, platform operators, responsible entities, consumer groups and other interested stakeholders are requested to provide their feedback.
Consultation Period: 8 Jul – 9 Aug 2024
Applicable to: Managed Fund Sector
ASIC released a consultation paper on proposed rules to facilitate competitive outcomes in cash equity clearing and settlement services provided by the ASX Group. The consultation seeks feedback on ASIC’s proposals to: (I) implement the 2017 Council of Financial Regulators Regulatory Expectations for Conduct in Operating Cash Equity Clearing and Settlement Services in Australia (Regulatory Expectations) as enforceable obligations; and (ii) impose additional requirements in several key areas, including technical interoperability, management of intragroup conflicts of interest, and external assurances on pricing and barriers to competition.
Consultation Period: 30 Jul – 10 Sep 2024
Applicable to: Equity Clearing and Settlement Services provided by the ASX Group
Proposal to Extend Relief for Employee Redundancy Funds
ASIC announced its proposal to extend the relief currently provided to employee redundancy funds from the AFS licensing and managed investment provisions of the Corporations Act. The relief is due to expire on 1 October 2024. The proposal involves remaking ASIC Corporations (Employee redundancy funds relief) Instrument 2015/1150 and extending the relief for a period of five years.
Consultation Period: 30 Jul – 23 Aug 2024
Applicable to: Employee Redundancy Funds
Proposal to Extend the Operation of Three Legislative Instruments
ASIC announced its proposal to extend the operation of three legislative instruments for a further five years: (i) Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice, (ii) ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716, and (iii) ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801. ASIC has assessed that these instruments, which are due to expire in October 2024, are operating efficiently and effectively, and continue to form a necessary and useful part of the legislative framework. A consultation paper was not issued for this consultation.
Consultation Period: 7 Aug – 4 Sep 2024
Applicable to: AFS Licensees and Credit Licensees
- Australian Prudential Regulation Authority (APRA)
Consultation on Minor Updates to the Prudential Framework for ADIs, Insurers, and RSE Licensees
APRA has released for consultation a number of minor updates to the prudential framework for ADIs, general, life and private health insurers and Registrable Superannuation Entity (RSE) licensees. This consultation is part of the minor framework update process, intended to ensure technical and clarifying changes to the prudential framework can be made in a timely manner. The proposed amendments are primarily technical clarifications and do not present any material change in policy settings.
Consultation Period: 6 Sep – 4 Oct 2024
Applicable to: ADIs, Insurers, and RSE Licensees
- Council of Financial Regulators (CFR)
Consultation on Central Clearing of Bonds and Repos in Australia
The CFR has released a consultation paper on reassessing the case for central clearing of bonds and repos in Australia. The CFR is seeking feedback from stakeholders on the magnitude of any costs and benefits that may accrue from the introduction of a central clearing of bonds and repos in Australia. Additionally, feedback is requested to understand the circumstances under which an overseas operator could safely and efficiently manage bond and repo central clearing, as well as any additional protections that may be required in such a scenario.
Consultation Period: 24 Jul – 4 Sep 2024
Applicable to: Bonds and Repos Market
This document is provided for information purposes only and does not constitute legal, tax, investment, regulatory, accounting or other professional advice. For more information on the legal and regulatory status of IQ-EQ companies please visit www.iqeq.com/legal-and-compliance.