Governance News 30 October 2019

60 mins 29.10.2019 Mark Standen, Siobhan Doherty, Kate Hilder

Governance News provides a weekly wrap up of key governance, regulatory and risk developments in Australia and overseas. This week's issue features among other things, an overview of the revised UK FRC Stewardship Code and a summary of ASIC's financial product advice test case (Australian Securities and Investment Commission v Westpac Securities Administration Limited [2019] FCAFC 187).

Boards and Directors Navigation Show below Hide below

AICD H2 2019 Director Sentiment Index released: director sentiment is at a three year low

Diversity Navigation Show below Hide below

Don't know where to start? In response to industry feedback, WGEA has released a toolkit to help organisations improve gender equality efforts
In Brief | Sometimes a blunt instrument (quotas) are necessary? Fortune reports that panellists at the Most Powerful Women Summit expressed support for Californian style gender quotas given the lack of progress on board (gender) diversity

Remuneration Navigation Show below Hide below

APRA's proposed changes to remuneration don't go far enough? Consumer groups' joint submission in response to APRA's consultation on proposed changes to executive remuneration called for the changes to go further
The IOOF board has said it will consider scrapping short term incentives entirely as part of a broader review of executive remuneration

Institutional shareholders and stewardship Navigation Show below Hide below

Top Story | Focus on outcomes not policies: 2020 UK Stewardship Code released
A steer on how board decisions or actions will be viewed by long term investors: ACSI 2019 Governance Guidelines released

Regulators Navigation Show below Hide below

In Brief | We could do better (from an 'efficiency' point of view)? In his address to the Lord Mayor's city banquet UK FCA CEO Andrew Bailey said, among other things, that part of the criticism levelled at the regulator is justified and that in consequence, the FCA is looking to improve efficiency (primarily by investing in data analytics)

Financial Services Navigation Show below Hide below

Top Story | What is the line between general and personal financial product advice? ASIC's financial product advice test case has succeeded on appeal
ASIC has imposed additional licence conditions on the Australian financial services (AFS) licence of IOOF Investment Services Ltd (IISL) as part of an application by IISL to vary its licence
Financial Executive Accountability Regime (FEAR) or maybe Financial Services Executive Accountability Regime (FSEAR) on the way? The AFR reports that Treasury/ASIC are jointly developing a consultation paper and draft legislation to extend the BEAR to other financial services institutions
Inquiry calls on fintechs and regtechs for feedback: The Select Committee on Financial Technology and Regulatory Technology has released an issues paper seeking feedback from fintechs and regtechs on key issues impacting the competitiveness of the sector including (among other things) regulation of the sector eg the extension of the CDR to the superannuation sector
In Brief | ASIC Commissioner Cathie Armour provided an overview of ASIC's activities to support fintech at the China Financial Summit. Among other things, Commissioner underlined ASIC's 'deliberate "open mind" approach'. Ms Armour said that ASIC 'cannot afford to be disinterested in fintech and regtech. Our approach includes learning from industry input, from international case studies, and close collaboration and knowledge sharing with domestic and international regulators' given the increasingly important role financial technology will play into the future
In Brief | ASIC, the Financial Services Council, Association of Superannuation Funds of Australia and Treasury are due to appear at the Senate inquiry hearing into Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 public hearing on 30 October
In Brief | APRA is consulting on proposed revisions to the capital treatment of eligible mortgages covered by the government's first home loan deposit scheme. The deadline for submissions is 11 November 2019
In Brief | Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Act 2019, received royal ascent on 28 October after passing both houses on 14 October

Accounting and audit Navigation Show below Hide below

In Brief | The largest UK accountancy firms have increased their share of the UK audit market with 100% of FTSE 100 companies now audited by the Big Four according to an FRC report
In Brief | Whistleblowers allege accounting irregularities at Infosys? The FT reports that whistleblowers (purporting to be Infosys employees) have alleged accounting issues at Infosys, which has led to India's securities regulator seeking information from the company about the complaints. Infosys is also reportedly facing a US SEC investigation and a US class action lawsuit

Risk management Navigation Show below Hide below

A Guide to ethical decision making in the boardroom: Ethics in the boardroom AICD/Ethics Centre Guide released
In Brief | The ACCC has instituted proceedings in the Federal Court against Google LLC and Google Australia Pty Ltd alleging they engaged in misleading conduct and made false or misleading representations to consumers about the personal location data Google collects, keeps and uses