Issue 815, 27 July 2021
In this issue:
- ASIC Cost recovery implementation statement 2020/21: consultation
- Royal Commission implementation: hawking reforms – consultation
- Strengthening Australia’s cyber security regulations and incentives: consultation
- Royal Commission implementation: financial advisers reference checking and information sharing protocol
ASIC Cost recovery implementation statement 2020/21: consultation
ASIC is consulting on its draft Cost Recovery Implementation Statement (CRIS) for 2020-21. The CRIS outlines ASIC’s estimated regulatory costs for 2020-21 and how these will be recovered as industry levies under the industry funding model.
The indicative levies published in the CRIS are based on ASIC’s planned regulatory work and associated costs for the 2020-21 financial year.
If you have any feedback you would like ASFA to consider in relation to the draft CRIS, please forward it to Andrew Craston by close of business Friday 6 August.
Royal Commission implementation: hawking reforms – consultation
ASIC has released consultation paper 346 (CP 346) seeking feedback on proposals to update Regulatory Guide 38 The hawking prohibitions (RG 38). The updates to RG 38 reflect legislative changes to the anti-hawking regime under the Financial Sector Reform (Hayne Royal Commission Response) Act 2020, which is due to commence on 5 October (see ASFA Action issues 788 and 735 for background).
The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 replaced three separate prohibitions on hawking in the Corporations Act 2001 with a single prohibition in s 992A. ASIC’s proposed updates to RG 38 reflect this change and clarify:
- the forms of contact that are subject to the prohibition
- the nature of the consent that is required from a consumer who wishes to be contacted about a financial product
- what is required to establish consumer consent.
ASIC is also proposing to add guidance in RG 38 about the consumer’s right to return a product and to be refunded when there has been a breach of the hawking prohibition.
ASIC is aiming to publish its final guidance in September, ahead of the revised hawking prohibition commencing on 5 October.
If you have any feedback you would like ASFA to consider in relation to the proposed changes to RG 38, please forward it to Maggie Kaczmarska by close of business Tuesday 10 August.
Strengthening Australia’s cyber security regulations and incentives: consultation
The Government is consulting on options for regulatory reforms and voluntary incentives to strengthen the cyber security of Australia’s digital economy.
The Government is seeking feedback on possible voluntary and regulatory measures in three areas:
- Setting clear cyber security expectations through cyber security standards for:
- corporate governance
- personal information and
- smart (internet of things) devices.
- Increasing transparency through:
- cyber security labelling for smart devices
- software vulnerability disclosure policies and
- health checks for small businesses.
- Protecting consumer rights through appropriate legal remedies for victims.
If you have any feedback you would like ASFA to consider in relation to the proposed cyber security reforms, please forward it to Byron Addison by close of business Friday 20 August.
Royal Commission implementation: financial advisers reference checking and information sharing protocol
ASIC has made a legislative instrument implementing a reference checking and information sharing protocol to give effect to a recommendation from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Royal Commission concluded that Australian Financial Services (AFS) licensees were not doing enough to communicate between themselves about the background of prospective employees. To address these issues, the Royal Commission recommended that AFS licensees undertake reference checking and information sharing for financial advisers to the same effect of the Australian Banking Association’s (ABA) Reference Checking and Information Sharing protocol (see recommendation 2.7).
The Government accepted the Royal Commission recommendations on reference checking, and the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (see ASFA Action issue 788) introduced obligations on AFS licensees to comply with an ASIC Protocol in relation to reference checking. The Act received Royal Assent on 17 December and will commence on 1 October. The reforms are intended to promote better information sharing about the performance history of financial advisers – focusing on compliance, conduct and risk management.
ASIC has now registered the ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429, to implement the Protocol. The Protocol sets out obligations for licensees to undertake a reference check and share information on an individual seeking to be employed or authorised as a financial adviser. The Protocol will commence on 1 October.
To help licensees comply with the new reference checking requirements, ASIC has prepared an information sheet and published examples of references as a guide. Consequential updates to existing ASIC guidance have also been made to reflect the new requirements.
In finalising the ASIC Protocol, ASIC took into account industry feedback on the proposals in Consultation Paper 333 Implementing the Royal Commission Recommendations: Reference checking and information sharing (CP 333). ASIC has also released Report 694, which highlights the key issues raised in submissions to ASIC on CP 333 and details ASIC’s responses on those issues.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
