Financial Services in Focus – Issue 107

ASIC releases guidance for operators of employee entitlement schemes

On 19 February, ASIC announced the release of Information Sheet 295 Employee entitlement schemes (INFO 295) outlining their approach to regulation of employee entitlement schemes (ESS) under the Corporations Act commencing 1 April 2026. 

INFO 295 explains: 

• transitional relief is available for ESS operators from 1 April 2026 until an AFS licence is granted by ASIC;
• the process for an ESS operator to apply for an AFS licence with the relevant authorisations by 1 September 2026; and
• obligations that will apply to ESS operators under the Corporations Act and conditions of ASIC’s ongoing relief.

ASIC will make a new legislative instrument in March 2026 to provide transitional and ongoing relief to ESS operators from certain provisions of the Corporations Act.

For more information, please refer to our recent article, ASIC’s new approach to employee entitlement schemes: transitional relief and AFS licensing. 

Treasury consults on enhanced MIS oversight and governance 

On 10 February, Treasury released Consultation Paper Enhancing oversight and governance of managed investment schemes. 

The Consultation Paper outlines options which aim to improve: 

• how managed investment schemes (MISs) are run; and 

• oversight of these schemes by ASIC.

The proposals for consultation include: 

• strengthening the regulatory framework for compliance;
• requiring responsible entities (REs) of registered MISs to have a majority of external directors and remove the option of having a mandatory compliance committee instead;
• prohibiting REs of registered MISs from conducting related party transactions, with limited exceptions;
• amending the framework for setting financial requirements for REs, such as setting more specific requirements;
• increasing ASIC’s data collection powers on the retail MIS sector; and
• alerting ASIC about superannuation switching.

The consultation period closed on 27 February 2026. 

For more information, please refer to our recent article, Treasury puts MIS governance under the microscope. 

ASIC proposes to extend relief for securitisation entities from holding an AFS licence

On 20 January, ASIC released Simple Consultation 43 Proposed extension of instrument relieving securitisation entities from holding an AFS licence (CS 43). 

CS 43 seeks feedback on ASIC’s proposal to remake ASIC Corporations (Securitisation Special Purpose Vehicles) Instrument 2016/272, which is due to expire on 1 April 2026.

The instrument exempts a securitisation entity from holding an AFS licence where it holds the securitisation product as a custodian or trustee or is issuing a securitisation product to an AFS licensee, an entity that is exempted from holding an AFS licence, or a wholesale client.

ASIC is proposing to remake the instrument on largely the same terms for a period of five and a half years.

The consultation period ended on Friday 20 February 2026.

AFCA publishes updated EDR Response Guide for claim delay complaints

On 6 February, AFCA published an updated version of their External Dispute Resolution (EDR) Response Guide for Claim Delay complaints.

The update is made in response to AFCA receiving an increased number of complaints about general insurance claims delays and aligns the guide with current best practice and changes to AFCA processes.

EDR response guides assist financial firms in preparing thorough responses to AFCA following unresolved referrals. Firms can use the guide to ensure they provide AFCA with relevant information that helps them resolve the complaint efficiently.

ASIC commences new review of advice licensees that use lead generation services

On 18 February, ASIC announced that it has commenced a new review of advice licensees using lead generation services, a marketing activity designed to create consumer interest in a product or service, with the goal of persuading consumers to purchase the product or service.

The review forms part of ASIC’s ongoing work aimed at addressing practices that inappropriately or unnecessarily encourage consumers to switch their superannuation. ASIC is concerned that certain practices associated with some lead generation services in financial advice and superannuation may expose consumers to a risk of significant losses.

Through the review, ASIC will identify financial advice businesses that use lead generation services to understand the nature of these arrangements and where appropriate, take disruptive or enforcement action.

As the review progresses, ASIC will continue to update a list of known entities on the Moneysmart website. The naming of entities is not an indication by ASIC that a contravention of the law has occurred. However, ASIC has advised consumers to exercise additional caution when engaging in any business that uses lead generation. 

ASX announces collaboration with Bloomberg Indices to launch ASX-Bloomberg AusBond Index Futures

On 4 February, ASX announced that in collaboration with Bloomberg Indices it plans to introduce new futures contracts that provide market participants with exchange-listed products to track the Bloomberg AusBond Composite Bond Index (BACM0) and Bloomberg AusBond Credit Index (BACR0), subject to regulatory clearance and industry readiness.  

The ASX-Bloomberg AusBond Index Futures will give market participants the ability to manage interest rate and credit risk, replicate index performance, and implement new hedging and liquidity management strategies. 

ASX releases unaudited 1H26 results and updates FY26 expense guidance

On 28 January, ASX announced it is updating its FY26 expense growth guidance, excluding the ASIC inquiry costs, to be between 13 per cent and 15 per cent. Including ASIC Inquiry costs, total FY26 expense growth guidance will be between 20 per cent and 23 per cent.

ASX had previously guided that, excluding the ASIC inquiry related costs, its FY26 total expense growth guidance was toward the upper end of between 8 per cent and 11 per cent.

A key driver for the increase in total expenses was ASX’s decision to make further upgrades to the capacity and capability of its resources to uplift risk management and modernise and support its major technology platforms.

This reassessment of ASX’s investment requirements for key strategic priorities was informed by findings from the ASX Inquiry Panel Interim Report, which called for a reset that places primacy on ASX’s stewardship role as an operator of critical market infrastructure. 

To provide further context to the updated figure, ASX also released its unaudited 1H26 results information. 

ASX consults on clear third-party clearing capital requirements and other proposed amendments

On 16 January, ASX released Public Consultation ASX Clear Third Party Clearing Capital Requirements and Other Proposed Amendments. 

The consultation paper outlines proposed changes resulting from a review of the capital requirements for third party clearers (TPCs), namely:

• changes to the base requirement component of the core requirement for capital to be held by TPCs; and
• the recognition of security deposits collected from trading participants and intermediaries as collateral to reduce counterparty risk amounts.

The consultation paper also includes proposals relating to daily or weekly reporting which are separate from the TPC review.

The consultation period ended on 27 February 2026. 

ASX commits to strategic package of actions from ASIC inquiry and $150 million capital charge

On 15 December, ASX announced it has committed to a strategic package of actions with ASIC.

The commitments are made in response to the ASX Inquiry Panel Interim Report, which identified a range of concerns about ASX’s governance, capability, risk management and culture, that required urgent attention and response.

Key features of the commitments include: 

• a strategic reset of the Accelerate Program;
• ASX ensuring the Boards of the clearing and settlement facility licensees are comprised of only independent, non-ASX Limited directors; and
• ASX accumulating an additional $150 million of capital above net tangible asset value by 30 June 2027 until agreed milestones in the revised Accelerate Program are completed to the satisfaction of ASIC. 

A letter reflecting the commitments was published in December 2025. 

The ASX Inquiry Panel will deliver a final report by 31 March 2026. 

ASX consults on the closure of the ASX Managed Fund Settlement Service 

On 19 December, ASX Limited and ASX Settlement Pty Limited (together ASX) released  Consultation Paper Consultation of the closure of the ASX Managed Fund Settlement Service.

The consultation paper follows the announcement made on 27 November 2023 that ASX has decided to wind down and close the ASX Managed Fund Settlement Service (mFund). It seeks feedback on proposed amendments to the ASX Operating Rules and ASX Settlement Operating Rules to support the closure of mFund, including: 

• removal of rules and terms specific to mFund; and
• introduction of transitional arrangements that will facilitate a fair and orderly wind down. 

The consultation paper also contemplates proposed amendments to the ASX Operating Rules to support the closure of the AQUA Quote Display Board.

The consultation period ended 12 February 2026.

ASX confirms amendment to Listing Rule 17.5

On 19 December, ASX confirmed an amendment to Listing Rule 17.5 effective from 16 January 2026, subject to regulatory approvals.

The amendment was proposed in Public Consultation Amendment to Listing Rule 17.5. 

Listing Rule 17.5 currently provides that trading in a listed entity’s securities will be suspended if the entity fails to lodge the annual reporting documents required under Listing Rule 4.5 by the due date.

In the public consultation, ASX proposed a change to Listing Rule 17.5 with the effect that the late lodgement of an annual sustainability report will not result in mandatory suspension.

Following consideration of the submissions received in response to the Public Consultation, ASX determined to proceed with the proposed amendment to Listing Rule 17.5. 

Department of Home Affairs release AML/CTF transitional rules exposure draft 

On 20 February, the Department of Home Affairs (DHA) published the exposure draft of the Anti-Money Laundering and Counter-Terrorism Financing Transitonal Rules 2026 (Cth). 

The proposed Transitional Rules aim to support a smooth implementation of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) reforms, allowing periods of time for reporting entities to adjust their business and processes to certain obligations, while still managing their ML/TF risk. 

The Transitional Rules include: 

• relief from initial customer due diligence requirements;
• relief from the requirement to notify AUSTRAC of an entity’s AML/CTF compliance officer;
• a staggered deadline for independent evaluations for new reporting entities;
• registration rollover; and
• deferred AML/CTF obligations for new virtual asset service providers.

All other obligations under the AML/CTF reforms still apply from 31 March 2026 for current reporting entities and 1 July 2026 for new reporting entities.

The DHA is seeking feedback by 6 March 2026. 

For more information about the Transitional Rules, please refer to our recent article, Draft AML/CTF Transitional Rules unveiled for existing and new reporting entities.  

AFCA and ABA appoint next BCCC chair  

On 16 January, AFCA and the Australian Banking Association announced they have jointly appointed former ASIC Commissioner Sean Hughes as the next chair of the Banking Code Compliance Committee. 

Mr Hughes will oversee the committee’s monitoring of Code compliance, commencing a three-year term in early 2026, taking over from outgoing Chair Mr Ian Govey AM.

FSC welcomes voluntary retirement best practice principles 

On 23 February, the Financial Services Council (FSC) issued a media release welcoming the government’s release of the voluntary retirement Best Practice Principles.  

The principles aim to strengthen accountability and provide a way for consumers, regulators and trustees to assess the extent to which a trustee is providing a holistic retirement offering for their membership. The principles also reinforce that Australians should expect a high level of engagement and service from their fund and recognise that Australians have diverse needs when it comes to retirement product solutions. 

FSC CEO Blake Briggs said that the principles ‘emphasise the importance of Australians being able to make active and informed choices about their superannuation fund based on how effectively it supports them through making available financial advice, strong customer service, and quality engagement’.

The FSC also welcomes the release of the associated Retirement Reporting Framework response. 

ASIC urges super trustees to step up and address serious gaps in anti-scam and fraud protections

On 4 February, ASIC issued a media release urging immediate action from superannuation trustees to strengthen anti-scam and fraud practices. 

The call to action follows a review by ASIC into scams and fraud-related website content across 47 superannuation funds, benchmarking them against comparable website content from the big four banks.

The review exposed significant gaps in communications for members, finding that banks scored positively in over 80 per cent of criteria assessed, whereas most super funds scored positively against just 40-60 per cent of the same criteria.

For more information on ASIC’s review, how ASIC might frame a cause of action for failure to strengthen anti-scam and fraud practices, and practical tips for what action super trustees should take, please refer to our recent article, ASIC urgers super trustees to enhance their anti-scam and fraud protections.

ASIC proposes to extend intra-fund transfer relief for super trustees

On 28 January, ASIC released Simple Consultation 44 Proposed extension of relief for intra-fund transfers(CS 44). 

CS 44 seeks feedback on ASIC’s proposal to extend ASIC Corporations (Superannuation: Accrued Default Amount and Intra-Fund Transfers) Instrument 2016/64, which is due to expire on 1 April 2026. 

The instrument provides relief for superannuation trustees from complying with application form and cooling-off period requirements during an intra-fund transfer. 

ASIC is seeking to extend the Instrument to 1 April 2031.

In continuing the relief, ASIC proposes to exclude relief for movements of accrued default amounts to MySuper products, which is now redundant, as well as making minor and technical amendments to simplify the relief. 

The consultation period closed on 18 February 2026.

AFCA publishes Superannuation Complaints Guide

On 28 January, AFCA published a detailed Superannuation Complaints Guide.  

The guide:

• replaces the former Transitional Superannuation Guide;
• aligns with AFCA’s Operational Guidelines; and
• reflects developments in AFCA’s management of superannuation complaints since AFCA’s establishment in 2018. 

The guide forms part of AFCA’s goal to provide fair, consistent and timely resolution of complaints. 

It is designed to assist consumers and financial firms by providing guidance about how AFCA interprets and applies relevant statutory powers, its rules and practices relevant to superannuation complaints. 

The guide does not introduce any new changes to AFCA’s management of superannuation complaints. 

ATO releases a Payday Super checklist

On 27 January, the ATO released a new checklist, giving employers a clear roadmap to prepare for Payday Super legislation.

The checklist helps employers to:

• understand the new requirements;
• plan their transition;
• prepare their business; and
• switch to paying super each payday.
• The new legislation will take effect from 1 July 2026. 

ASIC announces new Chair 

On 3 February, ASIC announced that Sarah Court will replace Joe Longo as ASIC’s Chair. Sarah Court has been ASIC’s Deputy Chair since June 2021 and will commence as ASIC Chair on 1 June 2026.

ASIC updates information available through purchased extracts

On 2 February, ASIC announced that company extracts purchased through the ASIC website will no longer contain the residential addresses of company officeholders.

The change, which forms part of ASIC’s ongoing RegistryConnect program, will strengthen the quality and integrity of registry data and is specifically aimed at addressing privacy and safety concerns. While it does not remove residential address information entirely, it introduces a barrier at the most widely available access point. 

Law enforcement agencies, government departments, and those who require address details for regulatory compliance and business purposes will still have access to this information.

ASIC proposes updates to legislative instruments about financial reporting

On 30 January, ASIC released Simple Consultation 45 Proposed remake and sunset of financial reporting-related legislative instruments (CS 45). 

CS 45 seeks feedback on ASIC’s proposals to: 

• remake the following three legislative instruments relating to financial reporting relief which are scheduled to sunset on 1 April 2026:
  • ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191, which allows entities to round amounts presented in financial reports and directors’ reports to the nearest thousand dollars;
  • ASIC Corporations (Electronic Lodgment of Financial and Sustainability Reports) Instrument 2016/181, which allows entities listed on the securities exchanges operated by ASX Limited, National Stock Exchange of Australia Limited and Sydney Stock Exchange Limited to lodge financial reports, sustainability reports and directors’ reports electronically with the market operator without having to lodge the reports with ASIC; and
  • ASIC Corporations (Disregarding Technical Relief) Instrument 2016/73, which allows entities to prepare a disclosure document or product disclosure statement for continuously quoted securities and to lodge cleansing notices under the Corporations Act;
• withdraw Regulatory Guide 28 Relief from dual lodgement of financial reports (RG 28), which provides redundant guidance about dual lodgement relief; and
• allow ASIC Corporations (Offer Information Statements) Instrument 2016/76 to sunset on 1 April 2026, as offer information statements are rarely used. 

The consultation period closed on 27 February 2026. 

Key issues outlook 2026

On 27 January, ASIC released its key issues outlook for 2026, highlighting where risks are most likely to emerge. 

ASIC outlined the following issues: 

• Increased retail client exposure to private credit markets, which raises risks of mis‑selling, unsuitable product selection, and decision‑making without adequate disclosure.
• Operational failures by superannuation fund trustees, such as delays in processing claims, inadequate support and services for customers, poor IT infrastructure and cyber resilience, and escalating risks of fraud and scam, leading to member harm.
• Consumers losing their retirement savings through investments in high-risk products, including as a result of high-pressure sales tactics and inappropriate financial advice.
• Advanced technology harming consumers, including agentic AI.
• Cyber-attacks, data breaches and/or inadequate operational resilience and crisis management undermining market confidence and harm consumers.
• Regulatory gaps related to emerging financial sector participants, such as digital assets, payments, users of AI, and others on the regulatory perimeter.
• Poor insurance claims handling, particularly following extreme weather events.
• Failure or significant outage resulting from the implementation of CHESS replacement or due to the ongoing use of the aging infrastructure of the current system.
• Poor quality financial reporting, sustainability reporting and audit quality; and
• Increased risk appetite in the banking sector in response to competitive pressures that results in consumer harm. 

For more information, please refer to the ASIC Corporate Plan 2025-26.

ASIC proposes updates to guidance on financial reporting and audit relief

On 12 January, ASIC released Simple Consultation 42 Proposed update to ASIC’s guidance on financial reporting and audit relief (CS 42). 

CS 42 seeks feedback on ASIC’s proposal to update Regulatory Guide 43 Financial reports and audit relief (RG 43) and withdraw Regulatory Guide 29 Financial reporting by Australian entities in dual listed company arrangements (RG 29). 

RG 43 provides guidance for entities seeking relief from the financial reporting and audit requirements of the Corporations Act. 

The proposed update to RG 43 aims to ensure the currency and clarity of that guidance by: 

• reflecting legislative reform since the guidance was last updated;
• incorporating relevant ASIC guidance including guidance from RG 29; and
• simplifying the existing guidance. 

The consultation period ended on 9 February 2026. 

ASIC renews guidance on managing conflicts of interest in financial services

On 16 December, ASIC released an updated version of Regulatory Guide 181 AFS Licensing: Managing Conflicts of Interest (RG 181). 

RG 181 provides guidance on managing conflicts of interest for Australian financial services businesses.

The changes to RG 181 align the guidance with developments in law and policy and draw on ASIC’s regulatory experience and insights from its surveillance of private markets. 

Key updates include:

• how the law applies to conflicts of interest, including the scope of the conflicts management obligation and links to other related obligations;
• the types of conflicts AFS licensees should identify and manage;
• the need for robust, tailored arrangements to manage conflicts;
• practical steps for effective conflict management; and
• a non-exhaustive ‘catalogue’ of related legal obligations and information.

The updates to RG 181 incorporates feedback from 26 submissions made in response to Consultation paper 385 Proposed update to RG 181 Licensing: Managing conflicts of interest (CP 385). 

For more information, please refer to our recent article, ASIC updates guidance on obligation of Australian financial services (AFS) licensees to manage conflicts of interest.