Australia releases new legislation as follow-on from Royal Commission
Chris Hamblin, Editor, London, 3 February 2020
Australia's Coalition Government has drafted new laws to implement 22 recommendations and two additional commitments that it made to the Banking, Superannuation and Financial Services Royal Commission.
The Government also intends to help the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) by honouring the following.
- Recommendation 2.7 to establish a compulsory scheme for checking references for prospective financial advisors.
- Recommendations 2.8 and 7.2 to strengthen breach reporting requirements for Australian financial services licensees.
- Recommendation 2.9 to require such licensees to investigate misconduct by financial advisors and remediate clients affected by the misconduct.
- Recommendation 1.6 will apply new obligations in accordance with recommendations 2.7, 2.8, 2.9 and 7.2 to Australian credit licensees in relation to conduct by mortgage brokers. This will also introduce breach reporting requirements for Australian credit licensees more generally.
- Recommendation 3.8 and 6.3 to adjust APRA's and ASIC’s operations in relation to superannuation to accord with the doctrine that APRA is the prudential regulator and ASIC the "conduct and disclosure" regulator.
- Recommendation 6.4 to give ASIC joint responsibility for enforceable provisions in the Superannuation Industry (Supervision) Act 1993 whose touchstone is the protection of consumers from sharp practice.
- Recommendation 6.5 to ensure that APRA’s job is unchanged. APRA remains responsible for prudential regulation and "member outcomes" in superannuation.
- Recommendation 6.14 to establish a Financial Regulator Assessment Authority to review the effectiveness of APRA and ASIC and report its findings to the Treasurer, Josh Frydenberg MP.
- An additional promise in response to recommendation 7.2 to provide ASIC with powers to give directions to financial services and credit licensees that are consistent with the recommendations of the ASIC Enforcement Review Taskforce.
Exposure drafts of different parts of the Financial Sector Reform (Hayne Royal Commission Response — Protecting Consumers (2020 Measures)) Bill 2020 are available on the Treasury's website.