ASFA Action Issue 959, 13 August 2024
In this issue:
- Record-keeping obligations of AFSLs, breach reporting: ASIC consultation on legislative instruments
- Climate-related financial disclosures: further AASB consultation
- Consumer Data Right: consent and operational enhancement amendments consultation
Record-keeping obligations of AFSLs, breach reporting: ASIC consultation on legislative instruments
ASIC is proposing to extend the operation of three legislative instruments that are due to expire in October, for a further five years:
- ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716 – this instrument modifies the Corporations Act 2001 to exclude certain forms of non-compliance from being deemed ‘significant’ breaches of core obligations, about which AFS licensees and credit licensees must lodge breach reports. This had the specific effect of preventing an outcome arising where all contraventions of the enforceable provisions of RG 271 Internal Dispute Resolution would have been automatically considered ‘significant’ and therefore ‘reportable situations’ for breach reporting purposes. The instrument also extends the period in which licensees may report certain breaches that relate to an earlier reported breach.
- Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice. This inserted section 912G of the Corporations Act 2001, imposing record-keeping obligations for Australian Financial Services licensees (AFSLs) that apply when the licensee or their representative (including an advice provider) give personal advice to retail clients.
- ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801 – this instrument provides temporary relief to limit the Commonwealth legislation in relation to which the breach reporting obligation in the National Consumer Credit Protection Act 2009 applies. It is relevant only to credit licensees.
ASIC plans to convert [CO 14/923] to the legislative instrument format and to consolidate Instruments 2021/716 and 2021/801 into one instrument.
ASIC is seeking feedback on its proposal to extend the operation of the instruments, including whether:
- the instruments are operating effectively and efficiently, and/or
- whether any amendments are required.
If you have any feedback you would like ASFA to consider in relation to the exposure draft, please forward it to Sebastian Reinehr by close of business Monday 26 August.
Reflecting climate-related uncertainties in financial statements: AASB consultation
As reported in ASFA Action issue 958, the Australian Accounting Standards Board (AASB) is close to finalising its proposed Australian Sustainability Reporting Standards. These will set specific disclosure requirements which are to be complied with, under legislative requirements for climate-related financial disclosures to be implemented via the Treasury Laws Amendment (Financial Market Infrastructure & Other Measures) Bill 2024 (that Bill is currently before the Senate – see ASFA Action issue 940 for background).
The AASB has now released for consultation an exposure draft ED 331 Climate-related and Other Uncertainties in the Financial Statements – Proposed illustrative examples. This proposes eight examples illustrating how an entity would apply the requirements in the existing AASB Accounting Standards to report the effects of climate-related and other uncertainties in its financial statements.
If you have any feedback you would like ASFA to consider in relation to the exposure draft, please forward it to Andrew Craston by close of business Friday 13 September.
Consumer Data Right: consent and operational enhancement amendments consultation
The Government has announced that it will ‘reset’ the Consumer Data Right (CDR) to “reduce the friction within the CDR to improve cost effectiveness, take up, and deliver better financial outcomes for consumers”.
As part of this process, Treasury has released a consultation package on amendments to the Competition and Consumer (Consumer Data Right) Rules 2020, seeking feedback by close of business Friday 23 August. The Government has also released the report from the Consumer Data Right Compliance Costs Review commissioned in 2023 and written to the Chair of the Data Standards Body to secure alignment with the Government’s direction for the CDR.
Importantly, the Government has indicated that its priority ‘user cases’ for expansion of the CDR are limited to consumer finance and borrowing, energy switching and accounting services to small business. The Government indicated last May that any potential expansion of the CDR to superannuation is on pause (see ASFA Action issue 901 for background).
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
