Australian businesses prepare for the new privacy regime
Our team has a deep understanding of the financial services regulatory environment and is an active participant through involvement in industry working groups. We manage regulatory issues relating to investments and fund operations including Australian foreign investment regulations and financial services regulations in Australia and abroad. We have advised and assisted a large number of financial services clients with their licensing requirements.
Our financial services team includes dedicated specialists in the regulation of the industry. Our expertise stems from dealing with complex issues across the sector from major financial institutions to specialist service providers, as well as active participation in industry forums.
We are experienced in the establishment, licensing, governance and operation of fund managers and responsible entities, platform operators, superannuation trustees and funds, authorised deposit taking institutions (ADIs), insurance companies, reinsurers and their holding companies, and financial planning firms, brokers and agents in Australia. We specialise in transactions affecting the ownership and control of ADI's, insurers, wealth managers and their holding companies, with particular expertise in demutualisation of credit unions, building societies and friendly societies.
We are a leading adviser on the establishment and operation of managed funds, hedge funds, exchange traded funds and prime broker arrangements and all aspects of obtaining and maintaining Australian Financial Services Licences.
Minter Ellison has a strong focus on regulatory compliance and change management issues for its clients. We are unique in our develop of practical tools to help our clients manage their regulatory burdens through the development of licensing toolkits, the widely used Disclosure Toolkits and our specialised publications such as Integrated FSR and Integrated AML.
Our team maintains a close connection with regulatory developments affecting the industry and is recognised as a leading contributor on many areas of reform through active participating in industry working groups, making submissions on key areas of concern to the Government and regular dealings with APRA, ASIC, AUSTRAC, Treasury, FIRB and other regulators.
AUSTRAC, in association with the Commonwealth Attorney-General's Department, has released a discussion paper that sets out proposed amendments to the Anti-Money Laundering and Counter-Terrorism Financing customer due diligence regime. The proposed changes are a response to the revision of international AML/CTF CDD standards by the Financial Action Task Force, and consider whether the Australian AML/CTF regime could benefit from the adoption of the revised FATF standards.
On 9 May 2013 the Australian Prudential Regulation Authority released draft Prudential Standard CPS 220 – Risk Management, draft updated Prudential Standard CPS 510 – Governance and accompanying Discussion Paper – Harmonising Cross-Industry Risk Management Requirements, for public consultation. The standards affect ADIs and life and general insurers. APRA has proposed the cross-industry standards as part of its broader harmonisation and consolidation process, which has already seen the implementation of harmonised prudential standards on outsourcing, business continuity management, governance and fitness and propriety. However, in addition to harmonisation, the standards also include significant new risk management governance requirements.
On 28 April 2013, the State Administration of Foreign Exchange in China together with its local counterparts, issued the Measures for Administration of Foreign Debt and the Operating Guidelines for Administration of Foreign Debt Registration. The Measures and Guidelines are designed to simplify approval processes for and strengthen monitoring of foreign debts in China.
On 26 April 2013 Treasury released the Government response to the Parliamentary Joint Committee on Corporations and Financial Services report on the collapse of Trio Capital and to the Richard St. John report on Compensation arrangements for consumers of financial services. Although preliminary, the response gives a clear signal to industry regarding the shape of future developments in financial services regulation.
The Personal Property Securities Act 2009 (Cth) and new legislative regime governing security interests in personal property have presented an interesting challenge to our clients and the broader legal community. In this update we discuss the key practical issues facing businesses operating under the new regime and provide tips on how to deal with them.
The Australasian Retail Credit Association has released for public consultation a draft of the new Credit Reporting Code of Conduct that it is developing at the Privacy Commissioner's request. The release of the draft Code follows the passing of the Privacy Amendment (Enhancing Privacy Protection) Act 2012 last November, which made substantial changes to the Commonwealth Privacy Act 1988 including the replacement of the current credit reporting system by Part IIIA of the amended Act and the requirement for a new Code to be developed.
A further tranche of tax legislation to exempt eligible foreign funds from Australian income tax has been released for public comment. This legislation (once enacted) will extend the Investment Manager Regime (IMR) exemption, to apply from 1 July 2011 (for the 2011- 2012 and later income years).
ASIC has today released guidance on approving opt-in codes. The conflicted remuneration guidance is now not due until Monday 4 March
The final RG is in the end very similar to CP 189. ASIC has not taken the opportunity to provide more detailed guidance on many of the issues industry is confronting in implementing the ban on conflicted remuneration and has in some areas watered down its guidance, particularly as previously flagged by removing the 5% and 7% thresholds for employee performance benefits.
The draft regulations propose to clarify once and for all that grandfathering will not apply to new products acquired after 1 July 2014: draft regs 7.7A.16-16A. In effect this means that grandfathering will have two phases. During 1 July 2013 – 30 June 2014, grandfathering will apply to new client and new investments where payments are made under an arrangement entered before 1 July 2013. From 1 July 2014, grandfathering will only apply to investments made before 1 July 2014 where payments are made under an arrangement entered before 1 July 2013.
On 15 February 2013 the New Zealand Financial Markets Authority (NZFMA) announced its review of the Financial Advisers (Australian Licensees) Exemption Notice 2011 (Exemption Notice), due to expire on 30 June 2013 (the Announcement).
The government has announced that it will delay the (already once deferred) start date for implementation of the proposed measure 'Better Targeting for Not-For-Profit Tax Concessions' to 1 July 2014. Read the Assistant Treasurer's media release on the new start date.
The Commonwealth Government progressed its agenda to assist in deepening the domestic retail corporate bond market by releasing an exposure draft Corporate Amendment (Simple Corporate Bonds and Other Measures) Bill 2013 on Friday, 11 January 2013. In this alert we examine the features of a 'simple corporate bond' and the mandatory two-part prospectus, and consider the implications of the reforms for the retail corporate bond market.
On 31 December 2012, the China International Economic and Trade Arbitration Commission (CIETAC), a foreign-related arbitration commission set up by the China Council for the Promotion of International Trade (also known as the China Chamber of International Commerce) (CCPIT), released its Announcement on Issues Concerning CIETAC Shanghai Sub-Commission and CIETAC South China Sub-Commission" (the Latest Announcement). This is the latest development in a dispute, which has been on foot since April 2012, between CIETAC, the Shanghai Sub-Commission of CIETAC (CIETAC Shanghai), and the Shenzhen Court of International Arbitration (SCIA) (the CIETAC Dispute). SCIA was known as the South China Sub-Commission of CIETAC before 22 October 2012.
Treasury has released an exposure draft of the Insurance Contracts Amendment Bill 2013 (Cth) for public consultation, which reintroduces reforms to the Insurance Contracts Act 1984 (Cth) proposed by the Insurance Contracts Amendment Bill 2010 (Cth) which lapsed in 2010 due to the prorogation of Parliament. This Alert discusses the key differences between the two Bills and provides a brief outline of the affected provisions of the Act.
The Government has registered the third tranche of the FOFA regulations, with some significant changes. For your information we have summarised the key changes. A copy of the regulations and the explanatory statement is attached.
The Australian Securities & Investments Commission has released ASIC Consultation Paper 194 setting out proposed financial requirements for custodians, responsible entities holding scheme assets, IDPS providers and wholesale trustees.
ASIC has released a new consultation paper in relation to the Future of Financial Advice (FOFA) legislation. This paper focuses on approval of codes of conduct for the exemption to the opt-in requirement for ongoing fee arrangements. Consultation paper 191 (CP 191) invites public feedback with submissions due by 4 December 2012. At the same time, the Financial Planning Association (FPA) has released a consultation paper on changes to its code which in part seek to address the opt-in requirement.
In determining that a litigation funding agreement between International Litigation Partners Pte (ILP) and Chameleon Mining NL (receivers and managers appointed) (Chameleon) is a credit facility under Chapter 7 of the Corporations Act 2001 (Cth) (Corporations Act), the High Court has taken a very broad interpretation of 'credit facility', which could, in turn, bring the regulatory treatment of a number of financial instruments, including swaps and other derivatives, into doubt.
ASIC has released a consultation paper on the conflicted remuneration provisions under the Future of Financial Advice (FOFA) legislation. Consultation Paper 189 (CP 189) invites public feedback with submissions due by 9 November 2012.
The Government has also finally released grandfathering regulations for payments by platforms. It has also indicated that it will not be making the draft grandfathering regulation released in May 2012.
ASIC has revisited the long standing guidance contained in Regulatory Guide 134: Managed investments: Constitutions and released Consultation Paper 188: Managed investments: Constitutions – Updates to RG 134.
The Assistant Treasurer has announced that because the legislation to establish the Australian Charities and Not-for-Profits Commission (ACNC) had not been passed in the house, and the Senate will not resume until 9 October, the start date of the ACNC will no longer be 1 October 2012
The Australian Securities and Investments Commission (ASIC) has released a report (298) on its review of the adequacy of risk management systems adopted by responsible entities (REs) of registered managed investment schemes.
On 27 August 2012, the Financial Services Council released its "Superannuation Governance Policy" (FSC Standard) which sets out proposed new binding requirements on FSC members that hold an RSE licence to operate public offer funds.
Following discussions and consultation with the industry, the Corporations and Markets Advisory Committee (CAMAC) has published its report on Managed Investment Schemes providing recommendations to the Government on various matters concerning the regulation of managed investment schemes under Chapter 5C of the Corporations Act.
This alert outlines some of the key proposals recommended by the CAMAC.
APRA has released a letter setting out additional proposed changes to the existing proposed changes to the reporting standards as a result of the review of capital standards for insurers.
On Tuesday 31 July, ASIC released enhanced financial requirements for Australian financial service licensees who issue over-the-counter (OTC) derivatives to retail clients. ASIC had found that poorly resourced issuers of retail OTC derivatives are less likely to carry out adequate supervisory measures and therefore more likely to have compliance breaches. The enhanced requirements are in response to ASIC's May 2011 consultation paper and have been introduced to ensure that licensees have adequate financial resources to better manage their operational risk. The new requirements commence on 31 January 2013.
Recently, the Australian Securities and Investments Commission released Report 291: Custodial and Depository services in Australia, which sets out ASIC's views on 'good practice' for responsible entities, platform operators, brokers and custodians on a range of issues relevant to custody of assets. It also signals other matters that ASIC intends to consult on with a view to updating its current guidance. Shortly prior to the release of ASIC's Report, the European Commission released its proposal for amending Directive 2009/65/EC on the remuneration policies of management companies and depositary functions relevant to undertakings for collective investment in transferable securities We summarise the issues and proposals raised in ASIC's Report and the EC's proposal in this update.
FMA and the Australian Securities & Investments Commission (ASIC) released yesterday mutual recognition arrangements for the financial adviser industry. These will come into effect on 6 July 2012. The regime will facilitate both Australian and New Zealand financial advisers to provide services in each other's countries based on the qualifications and experience they have gained in their home jurisdictions.
ASIC has issued guidance to assist issuers of superannuation products and simple managed investment schemes comply with the shorter product disclosure statement (PDS) regime. The shorter PDS regime commences fully on 22 June 2012 and is designed to make PDSs shorter and simpler, and help consumers compare financial products more easily. Issuers of new products have been required to comply with the regime since 22 June 2011 and other product issuers have been able to voluntarily opt-in.
The FOFA Bills have today passed the Senate with the Government's changes to delay commencement of the main provisions to 1 July 2013 unless the licensee or product issuer elects to comply early. These changes are in the same form as the Exposure Drafts released in April with technical amendments shown in the attached version of the amendments. The main change is to require ASIC to publish names of those electing to comply early on its website along with a statement that the FOFA obligations and prohibitions apply to them from the nominated date. The amended Bills will now need to be returned to the House of Representatives before they can become law to enable the House to agree to the amendments made in the Senate.
The long-anticipated law against 'price signalling' under the Competition and Consumer Act comes into force today, Wednesday 6 June 2012. The laws apply to the deposit taking and advance activities of authorised deposit taking institutions and prohibit certain disclosures of information that substantially lessen competition.
The Australian Government has released draft regulations under the yet-to-be-passed Future of Financial Advice (FOFA) legislation. The regulations have been released in two tranches, and cover:
The report by Mr Richard St John into compensation arrangements for consumers of financial services, released on 8 May 2012, has recommended the consideration of key reforms which could have a significant impact on the financial sector. We analyse the report and discuss its key recommendations and their implications for licensees, product issuers and consumers.
The recent announcement that financial planners operating under codes of conduct approved by ASIC will be exempt from so-called ‘opt-in’ requirements included in financial planning reforms has created further confusion in an already uncertain environment, says Christopher Brown, a Minter Ellison partner and specialist in financial services M&A.
The Parliamentary Joint Committee on Corporations and Financial Services (PJC) released its report on the Future of Financial Advice (FOFA) on 29 February 2012 confirming that the 'vast majority' of FOFA provisions should commence on 1 July 2012. The PJC does, however, embrace ASIC's proposal to adopt a facilitative approach to enforcement during the first 12 months, but only where breaches are inadvertent and the result of systems issues. It also embraced the view that ASIC adopt a facilitative approach to enforcement during the first 12 months, demonstrating a measure of accommodation to industry participants where breaches are inadvertent and the result of systems issues. We discuss the key PJC recommendations and summarise the Coalition recommendations in this Alert.
On Tuesday, 29 November 2011, as part of its Mid-Year Economic and Fiscal Outlook 2011-12, the Federal Government announced a package of changes intended to raise A$11.5 billion in new revenue and savings.
On 10 November 2011, ASIC issued Regulatory Guide 228: Prospectuses: Effective disclosure for retail investors (RG 228) to addresses previous issues with prospectus disclosure, especially the need to provide retail investors with relevant information in a form that can be readily understood. This Alert highlights the key elements of RG 228.
Minter Ellison has made a submission to Treasury on the Exposure Draft - Corporations Amendment (Future of Financial Advice) Bill 2011. The submission provides comments on issues such as the conflicted remuneration prohibition, anti-avoidance, on-going fee arrangements and grandfathering.
On 13 October 2011, The Australian Government tabled part of the first tranche of the Future of Financial Advice (FOFA) legislation in the House of Representatives. A number of changes have been made to the Exposure Draft which was released on 29 August 2011, including the removal of the best interests duty provisions. A further draft of these provisions is expected to be released for public consultation in the near future.
On Thursday 6 October the Senate Finance and Public Administration Legislation Committee released its highly anticipated report on the credit reporting provisions of the Exposure Draft of the Australian Privacy Amendment Legislation. The report makes 30 recommendations, many of which are quite significant, in response to numerous submissions and particularly on five key matters: simplification and clarification of language and definitions, the treatments of serious credit infringements, identity theft, the use of hardship flags and complaints handling.
On Wednesday 28 September, the federal government released the second tranche of draft legislation (including an Explanatory Memorandum) designed to give effect to its Future of Financial Advice (FOFA) reforms. The draft Bill addresses conflicted remuneration (including product commissions, volume payments and 'soft dollar' payments). Surprisingly, long-awaited provisions dealing with the 'grandfathering' of existing commission arrangements have been left out of the draft legislation. In this Alert, we will briefly consider the main provisions of the draft Bill, and what their impact is likely to be. The deadline for submissions to Treasury on the draft Bill is 19 October 2011.
Yesterday, the Australian Government released its Stronger Super Information Package. The Assistant Treasurer, The Hon Bill Shorten MP stated that he expects the Stronger Super legislation to be released in tranches over the next 9 months, with consultation to be undertaken on each tranche. The first tranche dealing with MySuper is expected to be released within a month.
Minter Ellison has made a submission to Treasury on the likely impacts of key provisions of the Draft Corporations Amendment (Future of Financial Advice) Bill 2011.