Unfair Contract Terms

Unfair Contract Terms

Financial Services
In March 2018, the Australian Securities and Investment Commission (ASIC) published REP 565 (found here: https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-565-unfair-contract-terms-and-small-business-loans/), which outlines changes to small business loan contracts made by the big four banks to comply with the unfair contract term law. This report also provides guidance to the broader small business lending industry. On Friday, ASIC announced that Prospa Advance Pty Ltd (Prospa) had changed the terms of its small business loan contract to address potential non-compliance with the unfair contract terms provisions of the ASIC Act. Changes agreed Prospa agreed to make the following changes: to the early repayment clause so that borrowers are able to repay the loan early without Prospa’s consent. Further, removing Prospa’s absolute discretion whether or not to provide a discount for prepayment. to the unilateral variation clause…
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New ASIC Guidance for the Fund Management Industry – Push on Compliance

Financial Services
The Australian Securities & Investments Commission (ASIC) has just released a batch of guidance for fund management in Australia.[1] In today’s update we offer a quick breakdown of the seven guidance documents. The seven guidance documents square the existing regulatory framework under the Corporations Act 2001 with the new ‘Asia Region Funds Passport’.[2] This is a multilaterally agreed framework for the cross-border marketing of managed funds across the Asia Region. Our take — compliance is everything. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry demonstrated that in spite of massive institutional compliance departments, and huge spends, a ‘compliance culture’ is non-existent in some businesses. [3] With deliberate attempts of senior management in some businesses to hide wrongdoing from ASIC it is fair to say that…
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How do I work out my compliance spend?

AU Energy Compliance, Financial Services, NZ Energy Compliance
In the just released final report of the Australian Competition & Consumer Commission (ACCC) retail electricity pricing inquiry[1], energy retailers identified the rising cost of regulatory compliance as a major concern.[2] Furthermore, rising compliance costs are not just a challenge for the energy sector. In 2014 Deloitte estimated that the total cost of compliance for Australian businesses was $250 billion every year.[3] This raises the question; what kinds of things must I consider when calculating my compliance spend as an energy business in Australia? By Dr Drew Donnelly, Compliance Quarter. Compliance Costs in General Unfortunately, there are no publicised benchmarks for compliance spend for individual energy businesses. This is likely because, in part, compliance spend is often not captured by a distinct line in the budget. Even when a business…
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Consumer data right – speech by Rod Sims Chairman of the ACCC

AU Energy Compliance, Financial Services
The Australian Competition and Consumer Commission (ACCC) Chair Rod Sims has delivered a speech to the National Consumer Data Policy Research Centre on the consumer data right (CDR) and the digital platforms inquiry (DPI). The CDR will be rolled out first in the banking industry followed by the energy and telecommunications industries. Photo by jesse orrico on Unsplash By Anne Wardell, Regulatory Specialist, Compliance Quarter. Consumer data right (CDR) The consumer data right (CDR) was introduced by the government in November 2017. Following the Open Banking Review, the Treasurer announced that banking would be the first sector to which the CDR would apply. At the same time as the Final Report was released, the government released the Consumer Data Right Booklet. The Booklet contains the following useful summary: The ACCC will have the…
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What is the new Financial Benchmark Regime?

What is the new Financial Benchmark Regime?

Financial Services
On 12 June the Australian Securities & Investments Commission (ASIC) announced the final regulatory regime for Financial Benchmarks. This regime, introduced through a 2018 amendment to the Corporations Act 2001, empowers ASIC to determine that certain benchmarks are ‘significant’ and to impose a licensing regime on the ‘administrators’ of those benchmarks. In today’s article, we ask, what is the new Financial Benchmark Regime? Photo by Paul Gilmore on Unsplash By Dr Drew Donnelly, Regulatory Specialist, Compliance Quarter Background: What is a Financial Benchmark? A Financial Benchmark has been defined as: an index or indicator calculated from a representative set of underlying data or information, used as a reference price for a financial instrument or financial contract or to measure the performance of an investment fund.[1] Reliable Financial Benchmarks are crucial to the operation of…
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Fintech and Regtech Developments – March, April, May 2018

Fintech and Regtech Developments – March, April, May 2018

Financial Services
We last summarised regulatory changes for financial and regulatory technology (fintech and regtech) in February.[1] Since then there have been a bunch of exciting developments including the Inaugural RegTech Association’s #ACCELERATERegTech 2018 event[2]  and the regulatory approval of a new challenger bank in Australia.[3] We summarise some of the other important developments over the last few months below. Photo by Samuel Ferrara on Unsplash By Dr Drew Donnelly, Regulatory Specialist, Compliance Quarter  Open Banking Review and the Consumer Data Right We mentioned in our February update that Treasury was consulting on the final recommendations of the Open Banking Review. The submissions that were received can be viewed at https://treasury.gov.au/consultation/c2018-t247313/. In response to both the Open Banking Review and the Productivity Commission’s Inquiry Report Data Availability and Use, the Commonwealth Government has announced that…
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Understanding your breach reporting obligations as an AFS Licence Holder

Understanding your breach reporting obligations as an AFS Licence Holder

Financial Services
Last month’s wealth management hearings before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Banking Royal Commission) highlighted the need for AFS licensees to understand and fully comply with their breach reporting obligations in a timely and not overly legalistic way. You can read more about our coverage of the issues coming out of the Banking Royal Commission here https://www.compliancequarter.com.au/tech-lies-and-litigation-asic-reads-the-riot-act-to-the-financial-services-industry/ In our article covering AFSL breach reporting obligations we take a closer look at those obligations and the consequences of non-compliance. What must an AFS licensee report? AFS licensees must notify ASIC in writing of any ‘significant’ breach (or likely breach) of their obligations under s912A (including licence conditions), s912B (compensation arrangements) or financial services laws, as soon as possible, and in any event within…
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So, you’re interested in forming a bank in Australia?

So, you’re interested in forming a bank in Australia?

Financial Services
Is it just us or is having your own digital bank the new must-have item at the moment? The announcement by APRA late last week that it had signed off on Australia’s first ever digital bank under a restricted licensing regime came as no surprise to those who have been monitoring the debate around how to increase competition in the banking sector. You can read more about the restricted banking licence granted by APRA last week to Volt Bank Limited application by accessing our previous coverage on it - click here to view. So, if owning your own bank is the next-big-thing, in the world of fintech, how does one go about getting a piece of the banking pie for themselves? Today we will take a closer look at forming…
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Tech, Lies and Litigation – ASIC Reads the Riot Act to the Financial Services Industry

Tech, Lies and Litigation – ASIC Reads the Riot Act to the Financial Services Industry

Financial Services
The Australian Securities and Investments Commission (ASIC) has taken more than a few big hits over the last month, as revelations of systemic risk and misconduct within the wealth management industry were aired publicly via the Royal Commission into Misconduct in the Banking, Financial Services and Superannuation Industry. It was time for a right of reply; and this week the Chair of ASIC, Mr James Shipton deployed just that in his keynote address at the Australian Council of Superannuation Investors Annual Conference. Mr Shipton made his position very plain – the actions of the wealth management industry had not only jeopardised our entire financial regulatory system but worse, had created a ‘trust deficit’ amongst the public. It was unequivocally a “moment”. Photo by Carlos Muza on Unsplash By Sarah Le Breton, Compliance Quarter…
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