• In Brief | Nissan to overhaul its board?  Reportedly Nissan is expected to abolish the role of Chair and name an external director to head its board following recommendations that the company address the concentration of authority in the current structure and strengthen oversight in light of the financial misconduct allegations against former chief, Carlos Ghosn

• 50:50? In a recent speech APRA Chair Wayne Bures has said (among other things) that the regulator wants to 'see remuneration based on a genuine and even balance of financial and non-financial considerations'
• APRA consultation on the application of BEAR variable remuneration requirements for medium/small ADIs
• United Kingdom | Slow progress on narrowing the (gender) pay gap?  According to Bloomberg's analysis, the gender pay gap at some of the UK's largest banks is 43.2% (an improvement on last year)
• United Kingdom | A UK Parliamentary Committee has called for action to address the 'huge differentials' between executive and employee pay, cautioning that failure to do so could 'foment hostility, accentuate a sense of injustice and undermine social cohesion and support for the current economic model'

• Treasury is consulting proposed changes which would impose caps on claims on the National Guarantee Fund

• 'Obey the law': In his address to the AFR Banking and Wealth Summit, ASIC Chair James Shipton called on industry to embed 'fairness' into every aspect of their business models in line with their legal obligations and cautioned that he does not 'want to have to relay this same message again in a year's time'
• In Brief | How will ASIC measure the success of its new enforcement approach?  The success of ASIC's new 'why not litigate' approach will not be measured by convictions, but by 'seeing significant and measurable reduction in misconduct in the financial services industry and other industries' ASIC Deputy Chair Daniel Crennan has reportedly said
• In Brief | Increased funding for ASIC and APRA in the Federal Budget has been welcomed by the Governance Institute (GIA) as 'vital to restoring trust' in the financial sector.  The GIA also expressed disappointment that the Federal Labor Party has made no announcements around funding for the financial sector’s regulators, or any mention of the Banking Royal Commission 

• 2019-2020 Budget Measure: The government has announced $5 million for the establishment of a Social Impact Investing Taskforce

Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Financial Services Royal Commission) (Hayne Commission)

• The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2019 has passed both Houses with amendments
• Update on the implementation of Hayne recommendation 2.4 (grandfathered commissions): Draft regulations released 
• Feedback sought on the merits/possible impacts of implementing Financial Services Royal Commission Recommendation 4.13 (Universal Terms Review)
• Consultation on superannuation binding death benefit nominations and kinship structures
• AFCA Chair Helen Coonan has called on financial institutions to cooperate with AFCA or risk being 'called out in the strongest possible terms'
• In Brief | ASIC has reportedly found no evidence of insider trading ahead of the release of Commissioner Hayne's final report, despite Labor speculation to the contrary

Other Developments

• Top Story | MinterEllison Foreign Bank Tracker 2019
• APRA is consulting on draft rules to provide clarity to new entrants to the financial services sector
• Assistant Treasurer Stuart Robert has announced that the government plans to establish a superannuation consumer advocate as recommended by the Productivity Commission
• Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Bill 2019 has passed both Houses 
• Review of the 'sole purpose test': APRA has written to superannuation funds outlining its areas of supervisory focus and expectations of licensees for 2019
• ASFA has called for the superannuation guarantee rate to be raised to 12% as soon as possible 
• Open Banking | Draft CDR rules released for consultation: The ACCC has released draft rules for the Consumer Data Right in banking covering issues 'central to implementation' (ahead of the passage of enabling legislation)
• Review of the Four Major Banks: ANZ and NAB CEOs have recently appeared before the Standing Committee on Economics and (among other things) have provided updates on implementation of the FSRC recommendations  
• Consultation on options to strengthen unfair contract terms protections for small businesses announced
• Not confident that appropriate risk frameworks are in place (in every instance)? The first annual review of industry compliance with the Life Insurance Code of Practice suggests there is room to improve risk and compliance frameworks
• ASIC to conduct research into a 'more appropriate' label for 'general advice' following the release of research indicating the term is not well understood by consumers, and calling into question the efficacy of the 'general advice' warning 
• In Brief | Legislation enabling mutual entities (registered under the Corporations Act to issue equity capital without risking their mutual structure or status — Treasury Laws Amendment (Mutual Reforms) Bill 2019 — passed both Houses on 4 April without amendment
• In Brief | Legislation to establish a $2 billion Australian Business Securitisation Fund to help smaller banks and non-bank lenders to lend to small to medium businesses — Australian Business Securitisation Fund Bill 2019 —  passed both houses on 3 April

• In Brief | No evidence of cartel conduct: The Australian reports that the Australian Competition and Consumer Commission (ACCC) will not proceed with an inquiry into the big four accounting firms — Deloitte, EY, KPMG and PwC — over alleged cartel conduct in the sale of audit and consulting services for lack of 'evidence that provides a basis for taking further investigative action'
• In Brief | Structural reform on the cards? A UK Parliamentary report has recommended various audit rector reforms including that the 'CMA aims for a structural split or at the very least implements its proposed operational split between audit and non-audit. If operational separation does not end cross-subsidies and fails to produce improvements in culture, independence and transparency, we recommend that the CMA implements a full structural break-up of the Big Four into audit and non-audit businesses'
  
   

Climate Risk

• Top Story | Updated Hutley opinion released: Directors' exposure to the risk of climate change litigation has only increased since 2016
• Australian Sustainable Finance Initiative: The big four banks have joined with super funds, insurance companies and financial sector peak bodies to form a climate investment initiative aimed at realigning the finance sector to support greater social environmental and economic outcomes for the country
• Shell Industry Associations Climate Review released: Shell has announced it will not renew its membership of the American Fuel and Petrochemical Manufacturers (AFPM) in 2020 due to material misalignment with the association's climate policy position
• Acting on climate risk: QBE has said it will stop insuring/underwriting coal projects due to global warming
• United Kingdom | Updated environmental reporting guidelines released: The BEIS has released updated guidance to assist companies and limited liability partnerships to comply with the Streamlined Energy and Carbon Reporting regulations, including greenhouse gas (GHG) reporting 
• In Brief | Smog cost?  Reportedly, 92% of people in the Asia-Pacific region are exposed to levels of air pollution that pose a significant risk to health.  This is reportedly impacting firms' ability to attract executives to work in polluted cities. Though companies are offering 'pollution premiums' (eg insulated apartments, home air purifiers, breathing masks, medical checkups, 'smog break' holidays and cash executives (up to 20% of base salary)) executives, especially those with families, are reportedly increasingly unpersuaded

Cybersecurity and Privacy

• Commitment to change the decryption law? (If elected) Federal Labor reportedly plans to amend the controversial Telecommunications Assistance and Access Act 2018 (decryption law)
• New legislation to ensure that online platforms 'cannot be exploited and weaponised by perpetrators of violence' in the wake of the Christchurch terrorist attach — Criminal Code Amendment (Sharing of Abhorrent Violent Material) Bill 2019 — passed both Houses on 4 April 

Culture

• Top Story | Little measurable improvement? Assessment of UK Bank Culture released 

Supply Chain Risk

• In Brief | Consultation on draft Modern Slavery Reporting Guidance: The Commonwealth Modern Slavery Act 2018 established Australia’s national Modern Slavery Reporting Requirement.  The government has now released draft guidance on how to comply with the reporting requirement (including how to prepare a statement) and the consequences for noncompliance.  Comments are due by 19 May

Whistleblowing

• United States | The US SEC has awarded a total of $50m to two whistleblowers for information leading to successful enforcement action

• In Brief | The Corporations Amendment (Strengthening Protections for Employee Entitlements) Bill 2018 — which strengthens enforcement and recovery options to deter and penalise company directors and others from engaging in activity designed to reduce employer liability for employee entitlements in insolvency — passed both Houses on 4 April with amendments

• In Brief | The Federal Labor Party has promised a second budget? The Federal Labor Party has reportedly said that if elected, it plans to deliver another budget in August 'We need to reset the economic settings. We need to update the forecasts with the new government in place, and then, of course, we would return to the normal budget cycle of budgets in May from 2020 onwards' Shadow Treasurer Chris Bowen is quoted as stating