Financial Services in Focus – Issue 101

ASIC launches new portal for financial services licensees

On 5 May, ASIC announced the launch of a new digital portal to allow applicants to apply for an AFS licence. This new portal is integrated into the ASIC Regulatory Portal and is intended to improve user experience and streamline the way AFS licensees submit applications and make notifications to ASIC. 

The portal is currently available for use when applying for an AFS licence. The ability to use the portal to vary, cancel and maintain an AFS licence will be accessible in the coming months. Until all transactions can be carried out in the Regulatory Portal, the old eLicensing system will be available to use for all transactions.

The key changes and benefits for applicants include the automatic pre-filling of application details, eliminating the need to separately upload additional documentation and the ability to select financial products and services at a more granular level so that ASIC can better understand the financial services that applicants intend to provide.

ASIC will update its licence application guidance, including the consolidated AFS licensing kit and webpages, once all functions are rolled out in the portal. 

ASIC issues final sustainability reporting regulatory guide

Following the release of a draft version on 7 November 2024, on 31 March ASIC published its final version of Regulatory Guide 280 Sustainability reporting (RG 280) which provides guidance to entities that are required to prepare a sustainability report containing climate-related financial information under Chapter 2M of the Corporations Act. Such entities may include companies, registered schemes, registrable superannuation entities and retail corporate collective investment vehicles.

RG 280 provides guidance on determining who must prepare a sustainability report, contents of a sustainability report, disclosing sustainability-related financial information outside the sustainability report (such as in disclosure documents and product disclosure statements), and ASIC's administration of the sustainability reporting requirements (including ASIC's specific approach to considering relief and its use of its new directions power under section 296E of the Corporations Act). 

ASIC provides further guidance on virtual meetings for companies and registered schemes

On 26 March, ASIC announced that it has updated its webpage addressing some frequently asked questions (FAQs) from companies and registered schemes on holding virtual meetings, following the Government’s response to a review into the virtual meetings provisions.

The updated FAQs: Virtual meetings for companies and registered schemes further explain the amendments that permit hybrid and virtual-only meetings.

The updates include setting out ASIC’s expectation that members have equivalent opportunities to participate at meetings using virtual technology as occurs for in-person meetings, and provide guidance on:

• whether virtual meetings require a phone line option;

• the use of webcasts; and

• how to notify ASIC once an entity’s constitution has been amended.

ASIC and APRA host Superannuation CEO roundtables to discuss the Financial Accountability Regime

On 23 May, ASIC and APRA published notes from the latest Superannuation CEO Roundtables, held on 1 April 2025 and 10 April 2025.

The theme of these Roundtables was key issues related to the Financial Accountability Regime (FAR) and were attended by 15 superannuation CEOs representing a broad cross-section of the industry.

APRA and ASIC expressed positivity regarding the superannuation industry’s preparedness for the FAR, partly demonstrated by the proactive registration of accountable persons ahead of the regime’s commencement. The CEOs recognised the importance of clear accountabilities and governance structures, discussed the critical role of governance in trustee groups, and the need for clear position descriptions, charters, succession and contingency planning. 

A full summary of the key points and themes discussed at the Roundtable can be found in the notes.

APRA publishes a new FAQ on the Your Future, Your Super performance test

On 22 May, APRA issued a new FAQ to:

• provide further guidance on the administration of the Government's Your Future, Your Super performance test; and

• make changes to FAQ 15 under the ‘General’ section in relation to benchmark representative administration fees and expenses for the 12 months to March 2025.

AFCA publishes updated ‘Approaches’ to support fairer superannuation outcomes 

On 16 May, AFCA published its updated Approaches to three key superannuation topics.

These documents respond to valuable stakeholder feedback and clarify AFCA’s approach on a range of complex matters, including:

• delayed insurance claims in superannuation; 

• sections 29(6) and (7) of the Insurance Contracts Act 1984 (Cth); and 

• superannuation death benefit complaints.

While each updated document provides unique clarity around AFCA’s decision-making process, the updated Approach to superannuation death benefit complaints also includes important guidance for trustees in cases involving family violence.  

AFCA’s updated Approaches can be found on its website.

ASIC publishes recommendations to superannuation trustees in death benefit claims handling report

On 31 March, ASIC published a report on poor industry practices associated with death benefits claims handling, which detailed 34 recommendations to superannuation trustees. 

The report, titled ‘Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve’ (REP 806), examined 10 trustees and identified issues with excessive delays, poor customer service and ineffective claims handling procedures that required fixing. 

REP 806 also revealed that none of the 10 reviewed trustees monitored or reported on their end-to-end claims handling times or performance.  

Some of the recommendations included that superannuation trustees should:

• with respect to setting and monitoring performance objectives: 

  • track end-to-end claims handling times;

  • track both insured and uninsured claims; and 

  • use meaningful metrics with sufficient granularity to quickly identify and address issues with processing claims;

• provide their boards with performance reporting regularly and at appropriate intervals;

• urgently prioritise adequate staff resourcing and training; and

• provide clear and complete information to claimants about the claims handling process and explain what the claimant should provide and how long the process is likely to take.

ASIC called on the superannuation industry to immediately review and address death benefits claims handling deficiencies by adopting the list of recommendations.

ASIC proposes to remake incidental retail cover legislative instrument

On 16 May, ASIC announced it is consulting on its proposal to remake ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 (which is set to sunset on 16 August 2025), which exempts insurers and brokers from certain retail client obligations under Chapter 7 of the Corporations Act. 

This relief was initially granted to reduce regulatory burden and provide certainty to the industry that retail client obligations do not apply to business insurance products. This prevents retail client compliance costs from being incurred and passed on to businesses. 

ASIC has assessed that the instrument is generally operating effectively and efficiently and proposes to remake the instrument over a period of five years whilst continuing to monitor its effectiveness. 

ASIC is seeking feedback on this proposal, with feedback open until 16 June 2025. 

AFCA publishes add-on insurance EDR response guide 

On 6 May, AFCA published an updated External Dispute Resolution (EDR) response guide about add-on insurance complaints.

EDR response guides may assist financial firms in preparing responses to AFCA when a complaint remains unresolved after it is referred back to the financial firm.

AFCA expects responses in line with the guide on all complaints referred back to financial firms from 19 May onwards. 

ASIC proposes to remake three financial advice-related legislative instruments

On 15 May, ASIC announced it is consulting on its proposal to remake three legislative instruments relating to financial advice by consolidating them into a single instrument and extending it for a further five years. Scheduled to sunset on 1 October 2025, the three instruments are:

• ASIC Corporations (Advertising by Product Issuers) Instrument 2015/539; 

• ASIC Corporations (General Advice Warning) Instrument 2015/540; and

• ASIC Corporations (Financial Services Guides) Instrument 2015/541.

Aside from minor changes, the content of these instruments will remain largely unchanged.

ASIC invites feedback on its proposed changes by 12 June 2025. 

Treasury releases Exposure Draft Legislation for the Government’s financial advice reforms

On 21 March, Treasury commenced consultation on the Treasury Laws Amendment Bill 2025: Delivering better financial outcomes (Bill), which will implement the next tranche of the Delivering Better Financial Outcomes (DBFO) reforms through amendments that:

• clarify when advice relates to a financial product that is a beneficial interest in the superannuation fund, for the purposes of collectively charging for that advice;

• facilitate for certain superannuation funds to send targeted superannuation prompts to classes of members; and

• reform statements of advice to create a new client advice record that supports consumers to make informed decisions about the advice.

The DBFO reforms are intended to support the increased delivery of high quality, accessible and affordable financial advice for retail clients through clearer and more streamlined regulatory requirements

Treasury’s consultation package comprises an exposure draft of the Bill and accompanying explanatory and guidance materials that are available on its website.

Consultation closed on 2 May 2025.

AUSTRAC announces second public consultation on new AML/CTF Rules

On 19 May, AUSTRAC announced its second public consultation on the new AML/CTF Rules. Our recent article New Draft Rules shake up AML/CTF regime outlines the changes to the Draft Rules following the first consultation and explain the new Draft Rules.

AUSTRAC has updated the draft AML/CTF Rules to address feedback it received in the first round of consultation, which includes updates to: 

• allow delayed initial customer due diligence in a wider range of circumstances;

• provide greater flexibility in determining the lead entity of reporting groups;

• provide more detail on how to form reporting groups;

• clarify definitions relevant to value transfer and travel rule requirements; and

• where possible, address challenges businesses may have implementing or complying with the AML/CTF Rules. 

The second exposure draft of the AML/CTF Rules also contains new requirements on:

• reportable details for threshold transaction reports and suspicious matter reports; and

• information required for enrolment and registration applications.

The consultation pack, which includes a consultation paper, the exposure draft of the AML/CTF Rules, and an explanatory statement can be found at the above link.

AUSTRAC announces changes to tipping-off offence in effect from 31 March

On 31 March, AUSTRAC announced that reforms to the ‘tipping off’ offence had taken effect from that date. 

Notably, and as highlighted in Issue 100 of Financial Services in Focus, the reformed offence provides that it is a criminal offence under section 123 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to disclose certain types of information to another person where it would or could reasonably be expected to prejudice an investigation. 

Further guidance about the new ‘tipping off’ offence can be found on the AUSTRAC website.

AFCA opens consultation on Rules changes to expand jurisdiction over receiving banks in scams

On 19 May, AFCA opened public consultation on proposed changes to the rules that govern its work, with a key focus on expanding its jurisdiction to include the conduct of receiving banks in scam complaints.

A central feature of the proposed changes is the inclusion of receiving banks in AFCA’s jurisdiction when assessing complaints involving scam transactions. This change enables AFCA to investigate the actions of financial institutions that receive funds from scam victims, including the use of mule accounts.

Other key reforms include the following:

• introducing the ability for AFCA to name financial firms who do not comply with its determinations; 

• requiring the use of appropriate communication channels by paid representatives;

• dealing with paid representatives who are not AFCA members; and 

• removal of AFCA’s legacy Rules section. 

Consultation is open until 13 June 2025.

ASIC releases new regulatory guidance to support BNPL industry reforms

On 8 May, ASIC published a new regulatory guide, ‘Regulatory Guide 281 Low cost credit contracts’ (RG 281), to help buy now pay later (BNPL) providers understand their obligations ahead of new laws coming into effect on 10 June 2025. 

This comes after the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 amended the National Consumer Credit Protection Act 2009 to extend the National Credit Code to BNPL contracts.

RG 281 provides information to assist low-cost credit contract providers to comply with their key obligations, including modified responsible lending obligations. ASIC has encouraged BNPL providers who do not already have the appropriate credit licence to apply for one ahead of the reforms, as providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate.

Further information about licensing requirements that apply to anyone engaging in credit activities, including buy now pay later products, can be found in Information Sheet 285. 

The ACCC releases draft decision proposing to authorise collaborations on sustainable finance initiatives

On 17 April, the ACCC released a draft determination proposing to grant authorisation with conditions to allow the Australian Sustainable Finance Institute (ASFI) and industry participants to collaborate on sustainable finance initiatives for five years.

This comes after the ACCC granted interim authorisation to the ASFI and its member banks on 7 March 2025, allowing them to discuss and exchange information for the purpose of developing potential banking capital requirement reforms to remove constraints on sustainable finance and investment in Australia. This interim authorisation serves to provide statutory protection from court action for conduct by competitors that might otherwise raise concerns under the Competition and Consumer Act 2010 and will remain in place until the final determination comes into effect.

This authorisation was sought for the exchange of information to, among other things, improve the integration of natural capital data into financial decision-making, co-designing investment structures and developing related regulatory reform proposals. 

APRA and the RBA release joint statement on the use of the RBA’s overnight standing facility 

On 2 April, APRA and the RBA published a joint statement on the use of the RBA’s overnight standing facility. This comes as the RBA recently announced updates regarding its approach to monetary policy implementation, including the configuration of its open market operations and the role of the overnight standing facility.

APRA and the RBA are comfortable with banks using the overnight standing facility as needed, as its use is considered to be consistent with routine liquidity management activities. APRA and the RBA will liaise with banks to ensure they understand the role of the overnight standing facility and are ready to use it and comfortable doing so in their liquidity management practices.

The ACCC proposed to authorise Banking Code of Practice provisions on basic accounts and agricultural loan interest 

On 28 March, the ACCC issued a draft determination proposing to grant authorisation AA1000683, with conditions, to enable the Australian Banking Association’s (ABA’s) member banks to make agreements relating to basic accounts and default interest charges on agricultural loans under the Banking Code of Practice.

The proposed conditions of authorisation broadly require:

• member banks to not charge interest on informal overdrafts, or alternatively to refund any interest charged on informal overdrafts on basic, low or no fee accounts; 

• member banks to at least once annually take reasonable steps to identify and directly contact existing customers who are, or may be, eligible for a basic, low fee or no fee accounts and who do not already hold a basic, low fee or no fee account; and

• the ABA to report to the ACCC on informal overdrafts that occur in certain circumstances without customers’ agreement, any change in the number of member banks offering basic accounts, steps taken by member banks to identify customers eligible for basic, low or no fee accounts, and the uptake of these accounts.

The ACCC invites submissions in relation to its draft determination by 18 April 2025.

ATO announces additional support for new small business owners

On 26 May, the ATO announced it is providing additional support for new small business owners to ensure they understand and comply with their tax, super and registry obligations from the onset. In the coming months, Australian business number (ABN) holders will receive a series of emails from the ATO which include tips on ABN obligations, business structures, registering for GST and understanding employer responsibilities.

ASIC announces financial reporting and audit focus areas for FY 2025-26

On 19 May, ASIC published its financial reporting and audit focus areas for the 2025-26 financial year and highlighted the progress of its ongoing financial reporting and audit surveillance programs.

In keeping with ASIC’s enduring financial reporting focus areas, it will continue to focus on areas where significant judgement from preparers of financial reports is required, including revenue recognition, asset valuation and estimation of provisions.

For 2025-26, ASIC will review an increased number of audit files. As part of its integrated approach, ASIC will continue to select audit files where a change has been made to financial information or the financial report, or where it has concerns that a financial report may have a risk of material misstatement. In some instances, ASIC will select audit files based on other internal or externally available data.

ASX outlines opportunities to support Australian listed markets

On 8 May, ASX outlined a number of opportunities to improve the global competitiveness of Australia’s listed markets, streamline listing processes and open new investment opportunities for investors. 

In its submission, ASX advocated for:

• a streamlined initial public offering process by reducing the regulated ‘on-risk’ period for investors and companies; 

• clarifying regulation around financial forecasts in prospectuses, including allowing them to be optional for new listings; 

• reducing the required minimum level of ‘free float’ for new listings and S&P/ASX Index inclusion to attract more founder-led companies; 

• a more efficient and accessible corporate bond market to improve flexibility for issuers and increase access for retail investors; and 

• adjusting size thresholds for foreign exempt listings to encourage more international businesses to take secondary listings on ASX while maintaining strict requirements for equivalent standards of listing rules and compliance.

ASX completes new resourcing review for CHESS and commits to strengthen current arrangements 

On 30 April, ASX announced its commitment to a series of actions that will form part of its plan to further strengthen its resourcing arrangements for the maintenance and support of its Clearing House Electronic Subregister System (CHESS).  These actions include:

• expanding the current internal capacity of CHESS to support increased post-incident workload; 

• extending existing third-party support arrangements from current specialist vendors to support the current increased workload and any future capacity requirements; 

• improving the ways of working to support multi-day incidents, including round-the-clock incident resolution teams when managing times of incidents or abnormally high workloads; 

• uplifting the monitoring framework for CHESS resources and enhancing reporting on the status of CHESS resources to key senior management and board governance forums; and 

• further reviewing of current CHESS resourcing following the delivery of new CHESS Release 1 (clearing services).

The above actions have been prepared in the broader context of the eventual replacement of CHESS.

APRA releases response to submissions on proposed updates to Reporting Standard ARS 110.0 Capital Adequacy (ARS 110)

On 23 April, APRA released a letter to all ADIs in response to submissions on proposed updates to Reporting Standard ARS 110.0 Capital Adequacy (ARS 110).

This standard, made under section 13 of the Financial Sector (Collection of Data) Act 2001, applies to all ADIs and immediate parent non-operating holding companies, with the exceptions of foreign ADIs and providers of purchased payment facilities. 

ASIC to launch new portal for AFS licensees

On 16 April, ASIC announced that it is launching a new digital portal for licensing on 5 May 2025 to apply for, vary and cancel an AFS licence.

The new portal is designed to streamline the licencing process and pre-fills known information, presents the relevant questions for each applicant, and collects essential information upfront.  These improvements aim to reduce assessment times and improve the overall user experience for AFS licensees and applicants.

ASIC consults on plan to increase visibility of firms’ breach and complaints data

On 10 April, ASIC announced that it is consulting on plans to publish two dashboards containing firm-level ‘Reportable Situations’ and ‘Internal Dispute Resolution’ data in the second half of 2025.  The publication of the dashboards is intended to boost transparency, drive improved performance and help deliver better consumer outcomes. 

For further information regarding this proposal, please refer to CP 383 Reportable situations and internal dispute resolution data publication (CP 383), which builds on the high-level insight reports that ASIC has previously published. 

Feedback on CP 383 should be provided to ASIC by 14 May 2025.

The RBA and ASIC act on concerns with ASX

On 31 March, the ASIC and RBA released a statement that they have taken further steps to address concerns over the management of operational risk at the ASX, following the Clearing House Electronic Subregister System (CHESS) batch settlement failure that occurred on 20 December 2024. 

In a joint letter to the ASX, the regulators expressed their deep concerns about the potential for operational incidents, such as the CHESS batch settlement failure, to affect the ability of the CHESS system to reliably service the Australian equities market until CHESS is replaced. The regulators also highlighted their concern about the speed and nature of ASX’s remediation actions following the initial incident.

In response, the RBA has taken the unprecedented step of reassessing the compliance of ASX Clear Pty Limited and ASX Settlement Pty Ltd with the RBA’s Financial Stability Standards outside the usual annual assessment cycle. The RBA has downgraded its assessment of these entities’ compliance with the ’Operational Risk’ standard from ‘partly observed’ to ‘not observed’. A rating of ‘not observed’ is made when the RBA has identified serious issues of concern that warrant immediate action.

In addition, ASIC has directed ASX, under section 823BB(4) of the Corporations Act, to engage an expert approved by ASIC to undertake a technical review of CHESS. 

Treasury releases discussion paper on Proposed Financial Institutions Supervisory Levies for 2025-26

On 27 March, Treasury released a discussion paper seeking industry views on the proposed Financial Institutions Supervisory Levies (the levies) for the 2025-26 financial year for ADIs, general insurance, life insurance and friendly societies, private health insurance and superannuation. 

APRA collects these levies to recover its operational costs, as well as other specific costs incurred by certain Commonwealth agencies including Treasury and the ATO. 

Submissions closed on 25 April. 

The ACCC releases new merger process guidance for consultation 

On 27 March, the ACCC released draft guidance explaining the processes it will use when assessing acquisitions under Australia’s new merger regime, and is now seeking feedback on the guidance through consultation. It also released a ’simpler quick guide’ for further assistance to understand and engage with the new merger regime.

As we highlighted in Issue 100 of our Financial Services in Focus, the changes to the merger regime will mean acquisitions that meet certain thresholds will need to be notified to the ACCC for assessment from 1 January 2026. Businesses can voluntarily take part in the new merger control regime from 1 July 2025, so that they, alongside their advisors, have time to consider the ACCC’s approach under the new regime and provide feedback. 

ASIC sues AFS licensee for systemic and prolonged cybersecurity failures

On 13 March, ASIC published that it has sued FIIG Securities Limited (FIIG), an AFS licensee, for allegedly failing to have adequate cybersecurity measures for more than four years (as is required of an AFS licensee), according to documents filed by ASIC in the Federal Court. This enabled the theft of approximately 385GB of confidential data, with some 18,000 clients notified that their personal information may have been compromised.

ASIC’s allegations include FIIG’s failure to:

• have appropriately configured and monitored firewalls to protect against cyber attacks;

• update and patch software and operating systems to address security vulnerabilities;

• provide mandatory training to staff on cyber security awareness; and

• have adequate human, technological and financial resources to manage cyber security.

ASIC requires all companies to proactively and regularly check the adequacy of their cybersecurity measures, noting that advancing digital safety and resilience is a strategic priority for ASIC.

This serves as a timely reminder to all AFS licensees that there are significant dangers in neglecting your cybersecurity systems.

Government releases Scams Prevention Framework

In the first quarter of 2025, Treasury published the Government’s new ‘Scams Prevention Framework - Protecting Australians from scams’ guide (Framework).

The Framework creates new obligations and rules for certain businesses in sectors targeted by scammers, with the guide covering, among other things, roles in scam prevention, sectors’ obligation, intelligence sharing and consumer compensation.