From fintech to regtech: a new area for innovation focus

From fintech to regtech: a new area for innovation focus

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By Dr Drew Donnelly, Compliance Quarter. Today, continuing in our series of articles concerning developments in the fintech regulatory space (including blockchain), we discuss regulatory technology or ‘regtech’. Specifically, we look at a recent report from the Australian Securities & Investments Commission (ASIC) on its fostering of the sector. What is regtech? In many industries, both in Australia and internationally, regulatory compliance is becoming increasing complex – and costly. At the same time the risk of non-compliance for a business is growing, both through increased enforcement and the potential for reputational damage. By way of example, in Budget 2017 and financial services: an opening for the minnows and a warning for the sharks, we discussed the Government’s implementation of a new banking executive accountability regime, as well as increased funding…
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Future possibilities for Australian business with blockchain

Future possibilities for Australian business with blockchain

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    By Dr Drew Donnelly, Compliance Quarter. Last year, the Federal Government announced its commitment to Australia being a world-leader in Financial Technology (fintech). One aspect of this is fostering the use of digital currency (such as ‘bitcoin’) in Australia. In Three ways that financial technology changes can grow your business, we discussed the Government’s recent support for the use of digital currency through removing the ‘double GST’ which often applies to digital currency transactions. In its fintech priorities (read here at http://fintech.treasury.gov.au/australias-fintech-priorities), the Government also confirms its support for fostering ‘blockchain’ technology in Australia. So, what is blockchain? And how might it revolutionise Australian industry and government administration? What is Blockchain? Blockchain is a distributed ledger system, originally created to support the use of digital currencies such as…
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The Australia-Hong Kong Fintech Agreement: Q & A

The Australia-Hong Kong Fintech Agreement: Q & A

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  By Dr Drew Donnelly, Compliance Quarter. On 13 June, The Hong Kong Securities and Futures Commission (SFC) and Australian Securities & Investments Commission (ASIC) signed a Cooperation Agreement on financial technology (fintech or FinTech). This agreement aims to facilitate the sharing of information about fintech developments and to assist fintech firms looking to operate in one another's jurisdictions. Last month, we discussed the expansion of the ‘regulatory sandbox’ for fintech in Australia through ASIC’s Innovation Hub. Hong Kong has a similar regulatory sandbox and this agreement will mean that the respective hubs will be able to refer businesses from their own jurisdiction to the other for advice and support. In today’s article, we suggest three questions you might have about the agreement and provide our answers based on the…
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The Productivity Commission’s proposed comprehensive consumer right to data

The Productivity Commission’s proposed comprehensive consumer right to data

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By Dr Drew Donnelly, Compliance Quarter. Over the last couple of weeks we have asked the question ‘Is your business prepared for roll out of the Notifiable Data Breaches Scheme?’, we have also discussed the impact that recent changes to European Union (EU) privacy laws may have on businesses that hold information on EU citizens. Today, we look at a proposed change to data regulation in Australia that would see individual privacy playing a more muted role in a new comprehensive consumer right to data. This right is proposed in the Productivity Commission’s Inquiry Report into Data Availability and Use. For the full 658-page report see http://www.pc.gov.au/inquiries/completed/data-access/report/data-access.pdf. Australia’s under-utilised resource The Productivity Commission (The Commission) observes that Australia is behind other countries with similar governance arrangements (such as New Zealand…
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A stocktake on the fisheries red-tape reduction programme

A stocktake on the fisheries red-tape reduction programme

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  By Dr Drew Donnelly, Compliance Quarter. The Australian Fisheries Management Authority (AFMA) has just announced that it has passed the milestone of 50 initiatives aimed at streamlining and updating the regulatory environment for the fishing industry. However, neither the Government’s announcement, the AFMA website, nor any accompanying media provide an up-to-date explanation of which of those initiatives have been implemented, which are being progressed and which have stalled. Furthermore, on 9 June a new national peak body for the seafood industry, ‘Seafood Industry Australia’ was launched. This body will provide a unified, non-fragmented, voice for the industry and will almost certainly place pressure on the Government and its agencies to demonstrate more progress in the area. Today, we provide a quick stocktake on some key initiatives that we know…
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Is Energy Regulation Fit for Purpose? Review of regulatory arrangements for embedded networks – AER submission

Is Energy Regulation Fit for Purpose? Review of regulatory arrangements for embedded networks – AER submission

AU Energy Compliance
By Anne Wardell, Compliance Quarter. In a recent article, Embedded Networks under the spotlight, Connor James outlined the Australian Energy Market Commission (AEMC) review of the regulatory arrangements for embedded networks. The AEMC released a consultation paper and sought submissions. The Australian Energy Regulator (AER) lodged a submission on 17 May 2017. In this article I consider the Australian Energy Regulator (AER) submission. Paula Conboy, Chair of the AER, has provided a covering letter which usefully summarises the recommendations made in the submission. Attachment A provides detailed answers to the questions asked in the Consultation paper. The AER is of the view that the review ‘provides an opportunity to consider whether the benefits of embedded networks outweigh the detriment’[1] The submission identifies both areas for improvement in the regulatory framework…
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Embedded Networks Under the Spotlight

Embedded Networks Under the Spotlight

AU Energy Compliance
By Connor James, Compliance Quarter. The Australian Energy Market Commission (AEMC) is reviewing the regulatory arrangements for embedded networks. Embedded networks operate in a unique space from the regulatory perspective. Common examples of embedded networks include shopping centres, retirement villages, apartment complexes and caravan parks. Embedded networks are also found in commercial buildings. Below we discuss the AEMC review and the broad regulatory challenges with embedded networks. What is an embedded network? Embedded networks are private electricity networks connected to the distribution and transmission system of the national electricity market through a parent connection point (gate meter). Consumers within embedded networks are typically individually metered and sold electricity from the ENO. ENOs own network infrastructure and on-sell electricity from the gate meter within the embedded network to the occupants. There…
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Dousing the phoenix: Three measures that could curb this dodgy insolvency practice

Dousing the phoenix: Three measures that could curb this dodgy insolvency practice

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                              By Dr Drew Donnelly, Compliance Quarter. We mentioned last time that the Government is consulting on some options for curbing the misuse of the ‘safety net’ available for companies unable to pay employment entitlements on insolvency. There, we discussed the possibility of Government action to stop an illegal ‘phoenix company’, otherwise known as ‘phoenixing’ or ‘phoenix activity’. Today’s article is a deep dive into this particular practice: What is it, and what could be done to put a stop to it? The definition of “phoenix activity” In their 2015 report Business Set-Up, Transfer and Closure, the Productivity Commission defined illegal phoenix activity as: “the shifting of a business’s assets but not liabilities away from a…
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Complaints Resolution for Exempt Customers

Complaints Resolution for Exempt Customers

AU Energy Compliance
By Anne Wardell, Compliance Quarter. Small customers of authorised retailers and distributors of energy have access to free and independent dispute resolution through their state ombudsman. This is not the case for small customers of exempt energy sellers and exempt network service providers. These can be small customers who live in a caravan park, retirement village or high-rise apartment and receive energy by way of an embedded network which is private. There are numerous classes of deemed, registerable and individual energy sellers and network service providers. Although one of the conditions required for an exemption is an adequate dispute resolution system, this does not allow customers to access the ombudsman service, except in NSW. On 13 June 2017, the AER published an issues paper seeking stakeholders' views on the current…
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Changes to Energy Retail Reporting and Audit Obligations

Changes to Energy Retail Reporting and Audit Obligations

AU Energy Compliance
By Anne Wardell, Compliance Quarter On 9 June 2017, the Australian Energy Regulator (AER) released the following documents: Compliance procedures and guidelines – Version 4 – June 2017, and The AER Practice Guide for Compliance Audits – June 2017. The revised guidelines incorporate new rules introduced by the Australian Energy Market Commission (AEMC), refine the reporting framework and provide new guidance material on compliance audits. Changes to reporting obligations An important change is to the name given to reports and reporting periods. Reports will now be referred to as Immediate, Quarterly or Half Yearly Reports. Consequently, the sections in the procedures and guidelines which deal with reporting have been amended in line with this change. This includes substantive amendments to Appendix A. The report and template contained in Appendix B…
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