Allens Arthur Robinson: Financial Services Regulation: Archive: News 2008

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Allens Arthur Robinson

News 2008

For the latest FSR news, see our Breaking News page.

ASIC consults on share purchase plan threshold
18 December 2008

ASIC has today issued consultation paper 103, Review of share purchase plan threshold, which contains proposals to increase the monetary limit for share purchase plan disclosure relief from the current $5,000 in any consecutive 12 month period to $15,000 and to make it a condition of the relief that a cleansing notice be lodged with the ASX. ASIC also proposes to extend the terms of the relief for the issue of interests in an ASX-listed managed investment scheme under an interest purchase plan.

The consultation paper seeks the views of stakeholders, including companies, industry associations, retail investors and their professional advisers and the closing date for submissions is 13 February 2009. ASIC is particularly interested in understanding the financial and other impacts of its proposals and any alternative approaches and, therefore, wants feedback on:

likely compliance costs;
likely effect on competition; and
other impacts, costs and benefits.

(Any changes resulting from this consultation may result in amendments to class orders and also to RG 125 Small offers of shares to existing shareholders by listed companies - share purchase plans, which was issued by ASIC in 1997.)

For further details (including to access a copy of the consultation paper), refer to the ASIC website.

Short selling legislation published in the FRLI
17 December 2008

The Corporations Amendment (Short Selling) Act 2008 No 146 (Cth), which received Royal Assent on 11 December 2008, has today been published in the FRLI. This Act includes three measures:

a legislative ban on naked short selling;
a clarification and expansion of ASIC's powers; and
a comprehensive disclosure regime for permitted covered short selling, including placing a positive obligation on brokers to enquire of a client whether a sale is a covered short sale when a client places an order, and a direct obligation on market operators to publicly disclose short selling information they obtain from brokers.

Refer to the COMLAW website for a copy of the Act and explanatory materials. (For details on the release of an exposure draft of the Short Selling Bill, refer to our Breaking News for 23 September 2008.)

Minister Sherry Urges Industry to Act on Complaints
16 December 2008

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today called on financial product and service providers to ensure that their complaints and dispute handling departments are fully staffed and equipped to deal with rising numbers of disputes. The Minister noted that figures from the Financial Ombudsman Service show that disputes have risen substantially in the first five months of this financial year (compared to the same period the previous year), showing the impact that the global financial crisis is having on financial services consumers across Australia.

For further details, refer to the Minister's announcement on the Treasury website.

PDS notifications to be lodged electronically from 1 January 2009
17 November 2008

ASIC has today confirmed that from 1 January 2009, notifications to ASIC about a product disclosure statement (PDS) will need to be made online. This requirement affects the use of the following ASIC forms, which will be made available on ASIC's online portals:

Form FS88 PDS in-use notice;
Form FS89 Notice of change to fees and charges in a PDS; and
Form FS90 Notice that a product in a PDS has ceased to be available.

ASIC has confirmed that previous PDS notifications lodged with ASIC will be able to be viewed online.

For further information about online lodgement (including to register for access), refer to the ASIC website.

ASIC announces it will lift ban on covered short selling for non-financial securities
13 November 2008

ASIC has today announced that, as from 19 November, the following regulatory requirements will apply to short selling in Australia.

Covered short sales of non-financial securities will be permitted.
The ban on covered short selling of financial securities (as defined by ASIC) will continue until 27 January 2009.
Existing exemptions for covered short selling (eg, those relating to hedging and arbitrage transactions) will continue in relation to financial securities.
The facilitation of the sale of securities being recalled from a stock-lending program (irrespective of whether they are financial securities) will also continue.
Brokers will be required to ask a client (and the client will be required to inform the broker) whether a sale is a long sale or short sale.
Trading participants must report to the ASX each day all short sales including exempt covered short sales in financial securities. This will be a daily report to be submitted by 9am of short sales executed up to 7pm the previous trading day.
ASX trading participants should notify the ASX that they have advised their clients to disclose short sales at the time the sale is requested and will take reasonable steps to reinforce this obligation.

The ASX will also report short sales to the market, based on information received from brokers, in accordance with ASIC requirements.

For further details, refer to the ASIC website.

Short Selling Bill introduced into Parliament
13 November 2008

Following on from the release of an exposure draft of the proposed Bill to regulate short selling in Australia, the Government has today introduced the Corporations Amendment (Short Selling) Bill 2008 into the House of Representatives. For further information refer to the COMLAW website. (For details on the release of the exposure draft of the Bill, refer to our Breaking News for 23 September 2008.)

Minister announces improved Australian controls for Credit Rating Agencies and Research Houses
13 November 2008

Senator Nick Sherry (Minister for Superannuation and Corporate Law) has today announced reforms to the regulation of credit rating agencies (CRAs) and research houses, following a review conducted at the request of the Government by Treasury and ASIC.

In particular, CRAs (which were previously exempt) and research houses will be required to hold an Australian financial services licence (AFSL). In addition to being required to hold an AFSL:

CRAs will now also be required to issue an Annual Compliance Report (ACR) outlining in detail to ASIC how they have complied with the recently updated International Organisation of Securities Commissions (IOSCO) Code of Conduct Fundamentals for CRAs
research houses will also need to issue a similar ACR which will cover management of conflicts of interest and the procedures, methodologies and assumptions that result in research house advice.

In addition, the Government has today announced that it will:

convene a roundtable of key investor organisations in Australia to discuss the role they can play in developing initiatives to drive improvements in the development, due diligence assessment and usage of ratings, and ensure they are active in investor-side initiatives at the international level; and
provide the G-20/Financial Stability Forum with the new Australian Annual IOSCO Code Compliance Report model as a proposed model mechanism for jurisdiction reporting that will then allow national regulators to conduct a co-ordinated annual comparative global monitoring review of IOSCO Code compliance.

For further details, refer to the ASIC website to access a copy of the Treasury/ASIC Joint Report. Refer also to the Treasury website for a copy of the Minister's media release.

ASIC reminds training providers and authorised assessors of re-registration deadline
10 November 2008

ASIC has today issued a reminder to providers of training for financial advisers and authorised assessors about the 1 December 2008 deadline to re-register their training courses and assessment services on the ASIC Training Register. As a result of updating Regulatory Guide 146: Licensing: Training of financial product advisers (RG 146) in November 2007, ASIC requires all training courses and assessment services registered on the ASIC Training Register before 1 December 2007 to be re-registered by 1 December 2008. Subsequent re-registrations must occur within three years of the anniversary of the previous re-registration. Failure to re-register training courses and assessment services by the 1 December 2008 deadline will result in their removal from the ASIC Training Register as a current training course or assessment service.

For further information, refer to the ASIC website. (For details on the update of RG 146, refer to our Breaking News for 22 November 2007.)

ASIC facilitates withdrawals from frozen funds
31 October 2008

ASIC has today announced measures to facilitate operators of mortgage funds providing early withdrawal for members where there is hardship. ASIC has confirmed that it will consider applications to modify the operation of relevant provisions of the Corporations Act so that the operators can allow withdrawals by members on hardship grounds. However, ASIC has noted that the relief will generally only be given on a case-by-case basis for mortgage trusts.

For further details about what constitutes 'hardship grounds' and what conditions apply to the granting of the relief, refer to the information release on the ASIC website.

ASIC issues latest report on relief applications from financial services providers (1 April 2008 - 31 July 2008)
31 October 2008

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investments provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 April 2008 and 31 July 2008, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 18 July 2008, which also contains references to earlier relief application reports issued by ASIC.)

Government announces new measures for Australian Financial Services
3 October 2008

The Federal Government has today announced a two stage action plan (which was agreed to by Premiers and Chief Ministers at the Council of Australian Governments (COAG) meeting on 2 October) to modernise Australian financial services.

In broad terms:

phase 1 of the plan (for which legislation is intended to be in place by mid-June 2009, with a two-year transition period for affected businesses) will involve: the Commonwealth taking responsibility for trustee companies, the existing key credit regulation, and the Uniform Consumer Credit Code (UCCC) by enacting it as federal law; extending the UCCC to cover mortgages on investment properties; bringing 'payday' (deferred deposit) lenders under a national licensing regime with appropriate rules of conduct; bringing all finance brokers, advisers and credit providers under a national licensing scheme; providing ASIC with extended powers; bringing margin lending under the Corporations Act; and, enabling all borrowers to appeal to an external dispute resolution body to which all licensed lenders must belong; and
phase 2 of the plan (for which legislation is intended to be in place in the first half of 2010) will look at possible further rules to stem predatory lending practices, such as a review of credit card limit extension offers, an examination of State approaches to interest rate caps and other fringe lending issues.

The Government has indicated that it may also look at regulating reverse mortgages.

The action plan is intended to significantly boost consumer protection, cut red tape for business and modernise Australia's key financial services. It follows the release if the Government's Green Paper on Financial Services and Credit Reform, Improving, Simplifying and Standardising Financial Services and Credit Regulation, in June this year and agreement at the 2008 March and July COAG meetings to transfer consumer credit regulation to the Commonwealth.

For further details, refer to the Government's media release, which is available from the Treasury Website (and the Prime Minister's website). (For background information on the release of the Green Paper, refer to our Breaking News for 3 June 2008.)

ASICproposed changes to the EFT Code of Conduct
3 October 2008

ASIC has today released a consultation paper, Consultation Paper 90, Review of the EFT Code of Conduct: ASIC Proposals (CP 90), which proposes changes to the Electronic Funds Transfer Code of Conduct (EFT Code).

CP 90, which builds on Consultation Paper 78 Reviewing the EFT Code (released in January 2007), proposes:

making it easier for subscribers to deliver required information to consumers electronically;
further promotion of the EFT Code (eg, introducing a logo signifying that a business is a subscriber);
redrafting the EFT Code in plain English; and
dealing with mistaken internet payments through the EFT Code.

CP 90 proposes retaining the existing, long-standing rules on liability for disputed transactions. It also raises whether the EFT Code should be extended to protect small business consumers as well as individuals.

Submissions on CP 90 close on 5 December 2008.

For further information (including to access a copy of CP 90 and to obtain background information on the EFT Code), refer to ASIC's website. (For background information on the release of CP 78, refer to our Breaking News for 12 January 2007.)

ASIC provides relief and regulatory guidance for group insurance
30 September 2008

ASIC has today released the following class order relief and regulatory guidance regarding conditional exemptions from AFS licensing and managed investment scheme registration requirements for group purchasing bodies that arrange cover under insurance or facilities for managing financial risk (excluding some foreign insurance arrangements):

Class Order (CO 08/1) Group purchasing bodies;
Regulatory Guide 195: Group purchasing bodies for insurance and risk products (RG 195).

This class order relief and guidance follow on from the consultation paper, Group insurance arrangements: ASIC consultation paper, released by ASIC in May this year in which ASIC sought feedback on its proposals to offer exemptions from the licensing provisions in Chapters 7 and 5C of the Corporations Act for some bodies (such as sporting and community associations) that arrange group insurance policies.

The class order will commence after it has been gazetted and recorded on the Federal Register of Legislative Instruments.

For more information (including to access copies of the class order and RG 195), refer to the ASIC website. For further details on the earlier consultation paper, refer to our Breaking news for 7 May 2008.

Government releases exposure draft of the Corporations Amendment (Short Selling) Bill 2008
23 September 2008

The Minister for Superannuation and Corporate Law has today released an exposure draft of the Corporations Amendment (Short Selling) Bill 2008. The Bill requires the disclosure of covered short sale transactions on Australian financial markets. The legislation will be supplemented by regulations covering more detailed aspects of disclosure requirements.

The draft legislation is open for public comment until 21 October 2008 to facilitate introduction of the legislation into Parliament before the end of the current session. Until the legislation comes into effect, the disclosure requirements set out in ASIC class order CO 08/751 apply to those limited situations where covered short selling is currently still permitted by ASIC.

For further details on the Bill, refer to the Treasury website. (Refer also to the website of the Minister for Superannuation and Corporate Law for a copy of his media release on the draft Bill. Also, refer to the ASIC website for details of ASIC's recent announcements on short selling and to access a copy of class order CO 08/751.)

Further First Home Saver Account regulations registered in the FRLI
19 September 2008

The Corporations Amendment Regulations No 5 (2008), which were made on 18 September 2008, were registered today in the FRLI. These regulations further clarify the form and content provisions of the First Home Saver Account (FHSA) product disclosure statement (PDS), which were set out in the Corporations Amendment Regulations No 4 (2008). They also provide that the right to return a FHSA product during the cooling-off period and other defined situations is restricted to reflect the payment restrictions applying to FHSAs, facilitate the transfer of funds from an inactive FHSA to a default superannuation fund, and clarify the circumstances under which the FHSA PDS must be the first document given or sent to a client.

Refer to the COMLAW website for a copy of the regulations and explanatory materials. (For details on the earlier FHSA regulations, refer to our Breaking News for 18 July 2008.)

ASIC issues conditional relief for operators of collective investment schemes authorised by the Hong Kong SFC
18 September 2008

ASIC has today issued Class Order 08/506 Hong Kong collective investment schemes, which provides operators of collective investment schemes (CIS) authorised by the Hong Kong Securities and Futures Commission (SFC) with conditional relief from scheme registration and some licensing, product disclosure and fundraising requirements under the Corporations Act.

CO 08/506 is part of ASIC's implementation of the Declaration on Mutual Recognition of Cross-Border Offering of Collective Investment Schemes entered into between ASIC and the SFC on 7 July 2008. SFC-authorised CIS and SFC-licensed managers seeking to rely on the relief must:

be primarily regulated by the SFC; and
not be subject to material regulatory concessions by virtue of their regulation outside Hong Kong.

The class order will apply to Hong Kong-authorised CISs which are structured as either a unit trust or a mutual fund corporation.

For further details (including to access a copy of CO 08/506), refer to the ASIC website.

ASIC seeks views on proposed changes to dispute resolution requirements for financial services businesses
8 September 2008

ASIC has today released for comment a consultation paper, CP 102 Dispute resolution – update of RG 139 and RG 165, which contains proposed changes to the dispute resolution requirements for financial services businesses and external dispute resolution (EDR) schemes approved by ASIC. In particular, ASIC is seeking feedback on proposals relating to:

the adoption of the new Australian Standard on Complaints Handling (AS ISO 10002);
refining ASIC's requirements for the internal dispute resolution procedures of financial services businesses;
the coverage of ASIC-approved EDR schemes, including the setting of compensation caps;
public reporting of complaints by EDR schemes; and
harmonising the approach taken by ASIC-approved EDR schemes in some key areas.

ASIC is encouraging all ASIC-approved EDR schemes, licensees, consumers and investors to provide feedback. The closing date for submissions is 5 November 2008.

For further information (including to access copies of the relevant regulatory guides and the consultation paper), refer to ASIC's website.

ASIC releases final guidance to improve disclosure by unlisted mortgage and property schemes
2 September 2008

ASIC has today released the following regulatory guides aimed at improving disclosure to retail investors by unlisted mortgage schemes and unlisted property schemes:

Regulatory Guide 45 Mortgage schemes-improving disclosure for retail investors
Regulatory Guide 46 Unlisted property schemes-improving disclosure for retail investors.

Today's regulatory guides follow on from the earlier consultation papers released for comment by ASIC in July this year. ASIC has noted that it will also be issuing companion investor guides (which will be available later this month) for both mortgage and unlisted property schemes (similar to what it has already provided in relation to unlisted and unrated debentures) to assist investors in understanding the enhanced disclosure information and to make better informed investment decisions.

ASIC is encouraging:

responsible entities to communicate the enhanced disclosure information to investors in the most efficient and effective way possible and using existing investor communication channels (eg, by the scheme's website and regular investor reports) where possible; and
responsible entities, compliance committees and compliance plan auditors to comply with this guidance in a timely manner.

For further information (including to access copies of the regulatory guides and accompanying supplementary materials), refer to the ASIC website. (For background information on the earlier consultation papers, refer to our Breaking News for 8 July 2008.)

ASIC further clarifies guidance for unlisted and unrated debentures
29 August 2008

ASIC has today released:

an updated version of Regulatory Guide 69: Debentures–improving disclosure for retail investors (RG 69), which refines some aspects of the guidance in the earlier version of RG 69 by clarifying:
- the disclosure benchmarks for: equity capital, liquidity, loan portfolio, valuations, and lending principles
- the disclosure obligations for issuers who on-lend funds indirectly through a related party
- that RG 69 does not apply to debentures that are to be quoted on a financial market, or to debentures that are convertible into listed securities at the discretion of the investors
- the auditors' report on the benchmarks; and
a pro forma 'auditor's benchmark report', which is to be used by issuers' auditors to provide a separate report in relation to the benchmarks set out in RG 69 when auditing the annual financial report of the issuer.

For further details (including to access the documents issued today), refer to ASIC's website. (For details relating to the release of the initial version of RG 69, see our Breaking News for 1 November 2007.)

APRA and ASIC release updated guide to good practice in unit pricing
28 August 2008

APRA and ASIC have today released an updated version of Regulatory Guide 94 Unit pricing - guide to good practice for the life insurance, superannuation and funds management industries. The guide has been amended so that scheme operators can elect not to make payments to exited members for unit pricing errors where the compensation due is less than $20.

APRA and ASIC have said they will continue to review aspects of unit pricing practice as a part of ongoing regulatory monitoring and expect that product providers will follow the 'good practices' described in the guide (unless they have a reasonable and well-documented justification for adopting an alternative practice).

For further details and to access a copy of the guide, refer to ASIC's website. (For information on the earlier version of the guide, refer to our Breaking News for 3 November 2005.)

Australian authorities sign mutual recognition agreement
26 August 2008

ASIC and Senator Nick Sherry, Minister for Superannuation and Corporate Law, have today issued separate media releases announcing that a mutual recognition arrangement has been entered into between the US Securities Exchange Commission (SEC), the Australian Government and ASIC through which the US SEC and the Australian authorities (ASIC and the Australian Government) agree to consider providing exemptions to exchanges and securities brokers in one another's countries. Once implemented, these exemptions could permit:

US stock exchanges and broker-dealers regulated by the SEC, subject to conditions imposed by the Australian authorities, to offer their services to Australian wholesale investors and financial firms without being subject to most ASIC regulation; and
eligible Australian stock exchanges and broker-dealers regulated by ASIC, subject to conditions imposed by the SEC, to offer their services to some types of US investors and firms without being subject to most SEC regulation.

Under the arrangement, both the SEC and ASIC will retain jurisdiction to pursue violations of their respective anti-fraud laws and regulations.

Following the signing of the mutual recognition arrangement, the SEC and Australian authorities will begin considering regulatory exemptions under the arrangement as they are submitted to the two agencies. It is expected that the process of considering the initial applications for exemptions for approval by the authorities could be concluded in early 2009.

For further details, refer to the media releases on the ASIC and Treasury websites.

ASIC updates FHSA training requirements for financial product advisers
20 August 2008

ASIC has today issued an update to RG 146 Licensing: Training of financial product advisers to include new requirements for people who give advice about First Home Saver Accounts. To access a copy of the updated guide, refer to the ASIC website.

ASIC releases annual assessment of the ASX; Federal Government welcomes ASIC's assessment
14 August 2008

ASIC has today released a report on each of the licensees of the ASX Group which outlines its assessment of whether the ASX, during the period 1 July 2006 to 30 March 2008, had adequate arrangements in place to supervise its markets (including to manage its conflicts of interest) and its clearing and settlement facilities under sections 792A(c) and 821A(c) of the Corporations Act.

ASIC's assessment concluded that:

both the ASX and the SFE have adequate arrangements to supervise and monitor and to enforce compliance with the rules in relation to their markets (including in relation to handling of conflicts of interest) and that the services they provide are adequately resourced; and
each of ACH, ASTC, SFECC and Austraclear have adequate arrangements to supervise and enforce compliance with the rules in relation to their respective clearing and settlement facilities (including in relation to handling of conflicts of interest) and that the services they provide are adequately resourced.

ASIC also identified areas for improvement to assist the ASX in ensuring its supervisory arrangements remain adequate. Following discussions with ASIC, the ASX has agreed to take 10 actions which ASIC believes will improve the supervision arrangements for the future, including its arrangements to manage conflicts. These 'agreed actions' are set out in the report.

For further details (including to access a copy of ASIC's report), refer to ASIC's website.

Following the release of the ASIC report, Senator Nick Sherry, Minister for Superannuation and Corporate Law, issued a media release welcoming ASIC's assessment.

ASIC issues guidance to overseas people wanting to offer financial services in Australia
11 August 2008

ASIC has today issued regulatory guide RG 121: Doing financial services business in Australia, which is intended to help foreign financial services providers (FFSPs) understand Australia's financial services regime by:

setting out the statutory regime and describing ASIC's regulation of the financial services industry;
describing the licensing requirements (and noting the main associated obligations) for those who wish to provide financial services in Australia;
summarising the licensing exemptions available (including those exemptions designed specifically for FFSPs);
describing disclosure obligations that apply to those who offer financial products in Australia; and
noting some of the other rules and legislation that may apply to overseas people wishing to offer financial services in Australia.

For further details (including to access a copy of the guide), refer to ASIC's website.

Prudential regulations on FHSA tax information registered in the FRLI
8 August 2008

The Australian Prudential Regulation Authority Amendment Regulations 2008 (No 1), which were made on 7 August 2008, were registered today in the FRLI. The purpose of these amending regulations is to ensure that APRA is able to give protected information or documents related to First Home Saver Accounts (FHSA) business to the Commissioner of Taxation. .

Refer to the COMLAW website for a copy of the regulations and explanatory materials. (For details of the FHSA legislation, refer to our Breaking News for 25 June 200808.)

ASIC issues ongoing licensing relief for trustees of wholesale equity schemes
8 August 2008

Further to the interim conditional licensing relief issued by ASIC in class order CO 07/74 Wholesale Equity Schemes: Licensing relief for trustee on 31 May 2008, ASIC has today announced ongoing relief exempting trustees of wholesale equity schemes from having to hold an Australian financial services licence to provide custodial or depository services and dealing services (wholesale equity financial services). In this regard, ASIC has released:

Class Order CO 08/405 Wholesale equity schemes: licensing relief for trustees – Amendment, which extends the licensing relief in Class Order CO 07/74; and
Regulatory Guide 192 Licensing: wholesale equity venture capital schemes: trustee licensing, which explains the licensing relief in CO 07/74.

For further information (including to access copies of the class orders and regulatory guide), refer to ASIC's website. (For details of the earlier licensing relief and consultation paper, refer to our Breaking News for 31 May 2008.)

First Home Saver Account enabling regulations registered in the FRLI
18 July 2008

The Corporations Amendment Regulations No 4 (2008), which were made on 17 July 2008 and prescribe the form and content of First Home Saver Account financial disclosure documents, including PDSs and periodic statements, were registered today in the FRLI. The regulations commence on 19 July 2008. Refer to the COMLAW website for a copy of the regulations and explanatory materials.

ASIC issues latest report on relief applications from financial services providers (December 2007-March 2008)
18 July 2008

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 December 2007 and 31 March 2008, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 1 April 2008, which also contains references to earlier relief application reports issued by ASIC.)

Government announces first examples of short, simple PDSs for First Home Saver Accounts
17 July 2008

Senator Nick Sherry, Minister for Superannuation and Corporate Law, and Lindsay Tanner, Minister for Finance and Deregulation, have today jointly announced the release of two example 4-page, plain English product disclosure statements (PDSs) in anticipation of the commencement of First Home Saver Accounts (FHSAs) on 1 October 2008. The Ministers said the PDSs, which are the first instalment of work from the Financial Services Working Group, aim to make it easier for people who are interested in using FHSAs to understand and compare the products on offer.

For more information, including to access copies of the example PDSs, refer to the joint media release.

Government launches the new Financial Ombudsman Service
10 July 2008

Senator Nick Sherry, Minister for Superannuation and Corporate Law, today launched the Financial Ombudsman Service (FOS). The FOS brings together three separate external dispute resolution schemes: the Banking and Financial Services Ombudsman, the Financial Industry Complaints Service, and the Insurance Ombudsman Service.

For further information, refer to the Minister's media release.

ASIC updates guidance on no-action letters
9 July 2008

ASIC has today issued an updated version of Regulatory Guide 108 No-action letters (RG 108). The updated guide clarifies when ASIC will consider issuing a no-action letter and formalises ASIC's approach to taking class no-action positions.

For more information (including to access a copy of the updated guide), refer to ASIC's website.

ASIC releases proposals to improve disclosure by unlisted mortgage and property schemes
8 July 2008

ASIC has today released the following consultation papers and draft regulatory guides aimed at improving disclosure made to retail investors by unlisted mortgage and unlisted property schemes:

Consultation Paper 99 Mortgage schemes - improving disclosure for retail investors (including the draft regulatory guide); and
Consultation Paper 100 Unlisted property schemes - improving disclosure for retail investors (including the draft regulatory guide).

The draft guidance includes proposed advertising standards for these products and ASIC's expectations in relation to compliance plans, compliance committees and compliance plan auditors.

Today's consultation papers follow on from ASIC's earlier guidance on unlisted and unrated debentures. ASIC has noted that it will also be producing companion investor guides for both mortgage and unlisted property schemes (similar to what it has been provided in relation to unlisted and unrated debentures) to assist investors in understanding the enhanced disclosure information and to make better informed investment decisions.

ASIC is encouraging responsible entities to communicate the enhanced disclosure information to investors in the most effective way possible and by using existing investor communication channels (eg, by the scheme's website and regular reports).

The closing date for comments on the consultation papers and draft regulatory guides is 5 August 2008. ASIC has indicated that the finalised regulatory guides will be released by 2 September.

For further information (including to access copies of the consultation papers and draft regulatory guides), refer to the ASIC website. (For information about ASIC's guidance in relation to unlisted and unrated debentures, refer to our news item for 23 April 2008.)

ASIC announces mutual recognition agreement with Hong Kong SFC
7 July 2008

ASIC has today announced that it has signed a 'declaration of mutual recognition' with the Hong Kong Securities and Futures Commission (SFC) to facilitate the sale of retail funds to investors in each other's market. The declaration is intended to reduce regulatory duplication by allowing most funds registered in Australia for offer to retail investors in Hong Kong while making available to Australian investors similar funds authorised in Hong Kong.

To facilitate Australian funds to take advantage of mutual recognition, the SFC has issued a set of practical guidelines for the industry. Similarly, ASIC will issue a class order shortly providing Hong Kong authorised funds with 'conditional relief' from registration in Australia and from particular licensing, product disclosure and fund-raising requirements.

For further information, refer to the information release issued today by ASIC which is available on the ASIC website.

ASIC supports FPA statement of advice project
27 June 2008

ASIC has today issued a media release noting its support of the release this week by the Financial Planning Association of a 10-page example of a statement of advice (SOA), written in plain English and tested with consumers. (ASIC has previously published guidance in this area. In August 2005, ASIC published RG 90: Example Statement of Advice (SOA) for a limited financial advice scenario for a new client (August 2005) illustrating its interpretation of clear, concise and effective advice and disclosure in a specific financial advice scenario (ie, a hypothetical financial planning scenario dealing with personal advice about personal insurance, investing in managed funds and basic deposit products). This example SOA was developed in response to the (then) Federal Government's Proposals Paper: Refinements to Financial Services Regulation (2 May 2005), which had identified a need for more guidance on SOAs.)

For more information, refer to ASIC's website. (For information about ASIC's earlier guidance on shorter SOAs and the 'refinements' proposals paper, refer to our Breaking News for 31 August 2005 and 2 May 2005, respectively.).

New Corporations Amendment Regulations
26 June 2008

The Corporations Amendment Regulations 2008 (No 3) 2008 No 130 (Cth) were made on 24 June and registered today in the FRLI.

The regulations relate to the regulation of discretionary mutual funds (DMFs) and direct offshore foreign insurers (DOFIs) and are consequential to the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 (the DMF/DOFI Act). The purpose of the regulations is to extend consumer protection measures to wholesale clients of DMFs and DOFIs by requiring AFSL holders to provide:

wholesale clients with a notice about the risks of using an offshore insurer where business is placed under the exemptions (regulations 4C and 4D Insurance Regulations 2002); and
a PDS to wholesale clients of a DMF.

The regulations commence on 1 July 2008, to coincide with the commencement of schedule 2 of the DMF/DOFI Act. For further information, refer to COMLAW to access a copy of the regulations and the explanatory statement.

First Home Saver Accounts Bills receive Royal Assent
25 June 2008

The package of Bills implementing the Government's First Home Saver Accounts scheme (comprising the First Home Saver Accounts Bill 2008, the Income Tax (First Home Saver Accounts Misuse Tax) Bill 2008 and First Home Saver Accounts (Consequential Amendments) Bill 2008) have today received Royal Assent. These Acts commence on 26 June 2008 (ie, the date after Royal Assent).

To access copies of the legislation and explanatory materials, refer to the COMLAW website.

IFSA launches new Regulatory Headland Statement - Towards a More Efficient Regulatory System: 2008 - 2011
18 June 2008

IFSA has today released a new Headland Statement: 'Towards a more efficient regulatory system: 2008-2011' (which follows on from the release of IFSA's previous statement in February 2006) in which IFSA makes recommendations focussing on areas of structural weakness that impede the efficiency of financial services in Australia, involving:

Industry Data;
Operational Efficiency;
Benchmarking Australian Regulation;
Industry Structure;
Financial Projections;
Regulator Accountability; and
Industry Standards.

IFSA has issued this new Statement for the purpose of generating healthy discussion between industry, regulators and government in order to achieve better outcomes for investors and to improve business efficiencies.

Treasury and ASIC release consultation paper on cross border recognition of financial regulation
16 June 2008

Federal Treasury and ASIC have today released a joint consultation paper, Cross border recognition: Facilitating access to overseas markets and financial services, which:

contains proposals to:
- refine ASIC's current framework of unilateral recognition of foreign providers, facilities, services and products (as stated in Regulatory Guide 54 Principles for cross border financial services regulation: Making the regulatory regime work in a cross border environment, which was released in November 2002);
- develop a mutual recognition framework for application in agreements between Australia and an overseas jurisdiction that ensures the integrity of financial markets and protects investors
seeks the views of the users and providers of financial services, financial markets and those involved in raising capital about how the initiatives outlined in the consultation paper will assist Australian investors and enhance Australia's position in the global economy.

The closing date for submissions on the proposals in the joint consultation paper is 25 July 2008.

For further details (including to access a copy of the consultation paper), refer to ASIC's website.

ASIC and the NZSC welcome new regime for Trans-Tasman securities offerings and release protocols
13 June 2008

Further to the announcement today by the Australian and New Zealand governments of the commencement of the Mutual Recognition of Securities Offerings (MRSO) agreement, ASIC and the New Zealand Securities Commission have today jointly issued RG 190 Offering securities in New Zealand and Australia under mutual recognition. Legislation and regulations were recently introduced in each country by the respective Governments to bring this regime into effect. Under the new regime, issuers can now use one prospectus to offer shares, debentures or managed or collective investment schemes to investors in both Australia and New Zealand, subject to particular requirements.

The purpose of RG 190 is to:

explain what issuers have to do under the trans-Tasman mutual recognition scheme for offers of securities;
outline the role of the regulators in both countries in relation to an offer; and
alert issuers to the specific parts of Australian and New Zealand law that will continue to apply when offers are made under the MRSO, such as the prohibition on door-to-door selling in New Zealand and the securities hawking laws in Australia.

For further details (including to access a copy of RG 190), refer to the ASIC website.

ASIC announces the results of its latest audit inspection program
12 June 2008

ASIC has today released the latest results of its audit inspection program, noting that Australia has a skilled audit profession committed to independence and audit quality.

Report 130 Audit inspection program public report 2006-07 (June 2008) summarises the results of ASIC's audit regulation activities from 1 July 2006 to 31 December 2007, which included audit inspections of 19 firms.

ASIC says it will also continue to liaise with the US Public Company Accounting Oversight Board and other international audit oversight bodies with the intention of conducting work jointly with them or on their behalf to minimise the regulatory burden on Australian audit firms.

For more details (and to obtain a copy of the report), refer to ASIC's website.

Government releases Green Paper on Financial Services and Credit Reform - Improving, Simplifying and Standardising Financial Services and Credit Regulation
3 June 2008

The Government has today released a Green Paper on Financial Services and Credit Reform - Improving, Simplifying and Standardising Financial Services and Credit Regulation. The purpose of the Green Paper Paper is to consult stakeholders about the following range of financial services and credit reform initiatives:

development of a comprehensive approach to the regulation of mortgages and mortgage broking advice;
regulation of margin lending;
creation of a national market for trustee corporations through the implementation of Commonwealth legislation;
reforms to improve the existing regulation of debentures;
investigation of issues relating to property investment advice, including property spruikers; and
consideration of the most appropriate regulation of a range of remaining credit products, such as credit cards, personal loans and micro-lending.

Stakeholders are invited to submit comments on the options presented, or submit their own proposals and the closing date for submissions is 1 July 2008. Comments received in response to the Green Paper will then be considered by the Council of Australian Governments to assist it in further decision making about the regulation of these key financial services.

For further details, refer to the Green Paper which is available on the Treasury website.

Treasurer announces new protections for depositors and policyholders
2 June 2008

The Treasurer has today announced that the Government will introduce legislation to establish a Financial Claims Scheme (FCS). The FCS, which will be administered by APRA, reflects recommendations made by the HIH Royal Commission in 2003 and the global Financial Stability Forum earlier this year. It is intended to assist depositors and policyholders in the event that a financial institution fails, although it will not cover life insurance, superannuation or market-linked investment products or products offered by institutions which are not regulated by APRA.

The Government has also accepted recommendations of the Council of Financial Regulators that a number of changes be made to the regulatory framework to allow better management of failing financial institutions, including the capacity to recapitalise a distressed bank, credit union, building society (authorised deposit-taking institutions) or general insurer.

For further details, refer to the media release on the Treasurer's website.

Government releases consultation paper on simple superannuation advice
30 May 2008

The Government has today announced the release of a consultation paper, Simple advice on choices within an existing superannuation account, which has been prepared by the Financial Services Working Group. The Government is seeking feedback on regulatory and other steps that could be taken to improve Australians' access to low-cost financial advice within their superannuation fund.

The closing date for submissions is 15 July 2008.

For further details, refer to the consultation paper (available on the Treasury website).

New Corporations Amending Regulations to reduce red tape of managed investment schemes
30 May 2008

The Government has today announced the making of the Corporations Amendment Regulations 2008 (No 1) (Cth) which remove the requirement for managed investment schemes to notify ASIC of their top 20 unit holders each year. The regulations commence on the day after they are registered on the FRLI.

For further information, refer to the media release issued by Senator Nick Sherry, Minister for Superannuation and Corporate Law.

Government releases draft regulations on data collection arrangements and consumer protection measures for Direct Offshore Foreign Insurers
29 May 2008

The Government has today released for comment draft regulations which set out the data collection arrangements and consumer protection measures applying in relation to Direct Offshore Foreign Insurers (DOFIs). (These draft regulations follow on from the announcement made on 8 April 2008 by Chris Bowen, the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, regarding the limited exemption arrangements for DOFIs under the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007.) The Government has also confirmed today that the commencement date for collecting data from AFSL holders in relation to business placed with discretionary mutual funds and DOFIs will be 1 October 2008.

The closing date for submissions on the draft regulations and explanatory materials is 2 June 2008.

For further details and to access copies of the materials, refer to the Treasury website. (Also, for details of Mr Bowen's earlier announcement, see our Breaking News for 8 April 2008.)

APRA extends deadline for foreign insurers
26 May 2008

APRA has announced today that the deadline for foreign insurers wishing to apply for an authorisation to write business in Australia after 1 July 2008 has been extended from 31 May to 30 June 2008. APRA has confirmed that foreign insurers who submit their application and pay the application fee by 30 June will be allowed to continue to operate in the Australian market for up to six months while their application is processed.

For further details (including information on the announcement by the Government relating to authorisation requirements for foreign insurers operating in the Australian market), refer to the APRA website.

ASIC approves new complaints scheme – Financial Ombudsman Service
20 May 2008

ASIC has today announced its approval of the new Financial Ombudsman Service (FOSS).

FOS will represent the merger of the three biggest complaints schemes operating in the financial services industry – the Financial Industry Complaints Service, the Banking and Financial Ombudsman Service and the Insurance Ombudsman Service.

FOS will be operational from 1 July 2008. Initially, FOS will continue to operate the rules and procedures of the three existing schemes, with a view to operating under a single set of rules no later than 1 January 2010. ASIC is encouraging financial services licensees who are members of one of the existing schemes to transfer to FOS as soon as practicable.

For more information, refer to ASIC's website.

ASIC extends disclosure relief for rights issues
15 May 2008

ASIC has today issued the following class order relief and regulatory guidance in relation to the extension of disclosure relief to non-traditional rights issue structures:

Class Order CO 08/35 Disclosure relief for rights issues, which includes relief:
- for accelerated offers to institutions;
- from the requirement to lodge multiple cleansing notices;
- for disposal of a shortfall (e.g. through a book-build); and
- to make offers of shares to convertible security holders
Regulatory Guide 189 Disclosure relief for rights issues, which explains the relief ASIC has given in CO 08/35.

Further, to complement the relief given under class order CO 08/35, ASIC has also issued class order CO 08/171, Variation of class orders CO 04/671 and CO 05/26, which modifies:

CO 04/671 to clarify the operation of on-sale relief in relation to stapled securities; and
CO 05/26 to reflect the fact that rights issues that satisfy the disclosure exemption in section 1012DAA do not need to be made under a PDS.

Both class orders were gazetted in the ASIC Gazette and registered in the FRLI on 16 May, which is their date of commencement.

The aim of the disclosure exemption is to encourage companies to use pro rata rights issues, rather than placements, so that retail investors can participate. This follows on from the disclosure exemption introduced under the Corporations Legislation Amendment (Simpler Regulatory System) Act 2007, which enables listed entities to conduct rights issues for quoted securities or interests without a prospectus or PDS and the Consultation Paper 91, Non-traditional rights issues, which was issued by ASIC in September 2007 to consider whether to extend that disclosure exemption to accommodate current practices in rights issue structuring.

For more information, refer to the ASIC website.

IFSA probe reveals preferred PDS length is 15-25 pages
8 May 2008

IFSA has today issued a media release regarding research conducted for it by the Wallis Consulting Group, which shows that investors have a clear preference for PDSs that are 15-20 pages long. The results are set out in Report of findings of qualitative research into effective disclosure (stage II), March 2008 and, in summary, indicate that consumers consider the following is essential information in a PDS:

a simple fee structure;
a succinct, easy to understand statement about the investment options;
past performance;
a checklist for the reader to tick boxes as they work through the process; and
a glossary page and FAQs.

IFSA has said that the research will form the basis of a Guidance Note for IFSA's members.

ASIC announces results of its strategic review
8 May 2008

ASIC has today announced that it has completed its strategic review, which was conducted with the aim of helping ASIC to work out its priorities for the next 3-5 years. The review was completed within the timetable and in line with the process announced by Mr D'Aloisio to the Senate Estimates Committee on 30 May 2007. ASIC also confirmed that the Capital Markets Taskforce and Retail Investor Taskforce have finished their work and the results have been incorporated in the changes announced by ASIC today.

The new arrangements, which relate to how ASIC will better understand the requirements of its stakeholders and how it will deliver the benefits, will take effect from now and will be fully implemented during the next four months.

ASIC launches updated training register
29 April 2008

ASIC has today launched an updated version of the Training Register, aimed at improving the way financial services industry participants can search for information about approved courses and course providers. The changes, which follow on from the release of the updated version of Regulatory Guide 146 Licensing: Training of financial advisers (RG 146) in November 2007, are intended to ensure that course information is presented in a way that is easy to understand and helps individuals choose between the different approved courses. ASIC says it will continue to monitor the Register and make changes where necessary.

For more information (including to access the updated Register), refer to ASIC's website. (For details of the release of the updated version of RG 146, refer to our Breaking News for 22 November 2007.)

ASIC acts to provide retail investors with better disclosure in unlisted debentures
23 April 2008

ASIC has today released:

the final part of its 'three-point action plan' (which was announced in May 2007), Report 127: Debentures - Improving disclosure for retail investors, which presents the findings of a review into disclosures made by each of the unlisted, unrated debenture issuers against the new disclosure regime (which commenced in December 2007);
Investing in debentures - Independent guide for investors reading a prospectus for unlisted debentures, which is designed to provide further explanation of the new benchmarks for the benefit of investors; and
Report 126: Understanding investors in the unlisted unrated debenture market, a report setting out the results of research commissioned by ASIC to help better understand the profile and motivations of investors in unlisted and unrated debentures

ASIC has said that it will continue to monitor the disclosures made by debenture issuers over the next 12 months and develop further investor education initiatives. ASIC will also conduct more visits with debenture issuers in October this year and will provide a further report in April 2009.

For further information (including to access copies of the documents released today), refer to the ASIC website. (For background information on other announcements made, and documents released, by ASIC in relation to its 'Three Point Plan' to deal with unlisted and unrated debentures, refer to our Breaking News for 23 August 2007, 1 November 2007 and 19 December 2007.)

APRA and ASIC issue reminder about foreign insurance business
8 April 2008

APRA and ASIC have today issued a joint release reminding direct offshore foreign insurers (DOFIs) and local insurance brokers about the new authorisation requirements for foreign insurers that come into effect on 1 July 2008. From that date, subject to some exemptions announced today by the Assistant Treasurer, Chris Bowen:

DOFIs wishing to continue operating in the Australian market must be authorised by APRA; and
intermediaries holding an Australian financial services licence (AFSL), for example, insurance brokers, will be able to place insurance business only with APRA-authorised insurers.

As a result of the Government's proposed exemption regime (to be implemented by regulations which will be released in draft for consultation by the end of April), some business will still be able to be placed with DOFIs that are not authorised. The Government has also proposed that where AFSL holders deal with DOFIs under the limited exemption, they will be required to report that activity to ASIC through statistical returns.

For further details, refer to the joint release (available from the ASIC and APRA websites).

ASIC proposal to facilitate online financial services disclosures
2 April 2008

ASIC has today released a Consultation Paper CP 93 Facilitating online financial services disclosures under which it proposes to facilitate disclosure of financial services information through email and the internet (under Pts 7.6-7.9 of the Corporations Act) as part of the Retail Investor Taskforce work to improve access to such information.

ASIC is proposing relief to enable:

providers to give their financial services disclosures by:
- notifying clients via email that the relevant information is available from a website and with instructions on where the information can be found; or
- sending clients an email with a hyperlink to the relevant information
trustees of superannuation entities to use a website as the default method of delivering annual superannuation information (other than personal disclosures, such as periodic statements of a member's holding), which will mean that annual superannuation information is treated in much the same way as company annual reports.

ASIC is inviting feedback on the proposals in its consultation paper by 28 May 2008. In particular, it wants feedback on:

the benefits and risks of allowing disclosures to be delivered by hyperlink
other areas of the law where ASIC could facilitate greater use of online disclosure.

For more details (including to access a copy of the consultation paper), refer to the ASIC website.

ASIC issues latest report on relief applications from financial services providers (September-November 2007)
1 April 2008

ASIC has today released a report, Overview of decisions on relief applications, outlining decisions on recent applications from the corporate finance, financial services and managed investment provisions of the Corporations Act 2001.

The report, which covers applications considered by ASIC between 1 September and 30 November 2007, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.

For further details, refer to the ASIC website. (For details of previous update reports issued by ASIC, refer to our Breaking News for 23 November 2007, which also contains references to earlier relief application reports issued by ASIC.)

ASIC reminds AFS licensees: compensation requirements commence on 1 July, and releases updated version of RG 126
28 March 2008

ASIC has today:

reminded Australian financial services licensees that the compensation requirements in section 912B of the Corporations Act 2001 commence, for most licensees, on 1 July 2008, noting also that those licensees who are seeking ASIC's approval of alternative arrangements (ie, other than obtaining professional indemnity (PI) insurance) will need to apply to ASIC for approval soon; and
released an updated version of RG 126 Compensation and insurance arrangements for AFS licensees, (with a marked-up version to show the changes also being available), which clarifies:
- the scope of coverage required for fraudulent and dishonest acts;
- that adequate PI insurance policies do not need to explicitly refer to liability for breaches of 'Chapter 7 of the Corporations Act' (although they must have the effect of providing cover for breaches of Chapter 7);
- ASIC's expectations about reinstatements; and
- the language used in RG 126 where feedback indicates that ASIC's requirements did not fully reflect current insurance industry terminology or could be made clearer.

For further details and to obtain a copy of the regulatory guide, refer to ASIC's website.

ASIC releases research findings on the costs of financial services
27 March 2008

ASIC has today released Report 123: A report on costs of financial services 2007 on the cost impact of the regulatory framework ASIC administers. The report, which was commissioned late last year by ASIC and the Finance Industry Council of Australia and is based on the findings from interviews conducted by Chant Link & Associates with 64 financial sector organisations in November and December 2007, is one of ASIC's 'Better Regulation' initiatives.

ASIC says it will use the information from the report to engage in further discussions with industry on the impact of its regulation on business and to inform industry of its thinking on strategic issues.

For further details (including to obtain a copy of the report), refer to ASIC's website.

FPA announces new Practice Standards for financial planners: a commitment to quality advice
11 March 2008

The Financial Planning Association (FPA) has today released a set of four draft Practice Standards for FPA member consultation, which are aimed at addressing technical competence of financial planners and helping consumers to understand the process financial planners use to provide advice, and the level of service they can expect from their financial planner.

The draft Standards, which are the first in a series and have been developed by the FPA's Professional Conduct Committee with input from across the financial planning profession and the legal and compliance community, are:

Quality Client Engagement Standard – promoting clear communication between the client and the financial planner to enhance the understanding of the expectation, rights, and obligations of both parties;
Quality Client Information Standard – underpinning the collection of sufficient client data to have a reasonable basis for advice;
Providing Quality Recommendations Standard – providing guidance and minimum criteria for researching products and standards to ensure the clients' needs and objectives are the principal consideration when providing financial product advice; and
Providing Quality Advice Standard – building an appropriate financial plan which responds to the client's identified needs and objectives and recommends suitable products.

The FPA is seeking feedback from its members on the draft Standards by 2 May 2008. It is proposing to introduce the new Practice Standards after July 2008, with members expected to comply by July 2009. The draft Practice Standards are available on the FPA website www.fpa.asn.au.

APRA and ASIC release new online reporting system for dual-regulated institutions
11 March 2008

APRA and ASIC have today released a new online breach reporting system for dual-regulated institutions. This system:

simplifies the process for regulated institutions to report breaches, and prospective breaches, of a legal provision of an APRA-administered or ASIC-administered Act, standard or rule, as well as other matters that are required to be reported; and
reduces duplication faced by institutions regulated by both APRA and ASIC.

This initiative has been implemented under the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007 and, in broad terms, enables:

all APRA-regulated institutions – authorised deposit-taking institutions, general insurers, life insurance companies, friendly societies and superannuation licensees – to report breaches to APRA online; and
institutions regulated by both APRA and ASIC to report breach notifications required to be lodged with both regulators through a single electronic breach report to APRA, thereby eliminating the requirement for dual-regulated institutions to provide separate breach reports for the same incident to both regulators.

For more information (including to access the online reporting forms), refer to the APRA website.

Government announces the beginning of Financial Disclosure Simplification
29 February 2008

The Government has today announced the opening of the first session of the Financial Services Working Group, which was established earlier this month to deliver 'simpler and more readable financial information for consumers'.

The Working Group will initially focus on the development of a short form disclosure document for the First Home Saver Account. A timetable will be established for other financial products.

For further details, refer to the media release issued by Senator Nick Sherry (Minister for Superannuation and Corporate Law) on the Treasury website. (For background details on the establishment of the Financial Services Working Group, refer to our Breaking News for 5 February 2008).

Government introduces Bill to reform arrangements for reviewing prudential decisions
13 February 2008

The Government has today introduced in the Senate the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008. The reforms proposed under the Bill are intended to ensure that individuals and entities are able to seek appropriate review of APRA's decisions while at the same time enabling APRA to act decisively to address prudential risks.

The measures contained in the Bill respond to recommendations of the HIH Royal Commission and the Banks Taskforce report, among other things, and include:

the introduction of a court‑based process for disqualifying an individual from operating an entity regulated by APRA;
enhanced flexibility and consistency through streamlined directions powers;
removal of the requirement for ministerial consent for some APRA decisions not involving broader policy issues; and
an expansion of the availability of merits review for APRA decisions.

For more information, refer to the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008 (and the Explanatory Memorandum to the Bill) in COMLAW.

FPA launches 'Value of Advice Research'
12 February 2008

The Financial Planning Association (FPA) has today launched a publication, Value of Advice Research. The report was prepared by Rice Warner Actuaries at the request of the FPA and contains an actuarial examination of case studies to assess the financial (and non-financial) benefits of obtaining and acting on financial advice from qualified financial advisers.

For further information (including to obtain a copy of the Rice Warner report and to access the FPA's media release), refer to the FPA's website (at www.fpa.asn.au).

Government announces new Financial Services Working Group to review complexity in financial services
5 February 2008

The Government has today announced the formation of a Financial Services Working Group dedicated to looking at the current key issues associated with financial services advice and disclosure. The new Working Group:

consists of senior officers from Treasury, ASIC and the Department of Finance and Deregulation (with the aim of ensuring that solutions will achieve the Government's goals in relation to investors, be readily enforceable by the regulator, and be in‑line with the Government's business deregulation agenda);
will work with industry and consumer groups; and
is charged with considering the best approach to delivering short, comparable financial product disclosure documents and also determining an appropriate regulatory framework to facilitate the provision of financial advice in relation to significant decisions that investors make with regard to their superannuation.

The Government has also said that further product examination will be added to the work schedule throughout 2008.

For further information, refer to the joint media release issued by Senator Nick Sherry (Minister for Superannuation and Corporate Law) and Lindsay Tanner (Minister for Finance and Deregulation).

For more see our 2007 news archive, 2006 news archive, 2005 news archive, 2004 news archive, 2003 news archive, 2002 news archive and 2000 - 2001 news archive.