Financial Services in Focus – Issue 24
ASX releases a revised version of Guidance Note 33 Removal of Entities from the ASX Official List
On 15 April, ASX released a revised version of ASX Listing Rules Guidance Note 33 Removal of Entities from the ASX Official List.
Financial Action Task Force releases open-ended mandate
On 12 April, the Ministers of members of the Financial Action Task Force (FATF) agreed an open-ended Mandate for the FATF and its role leading global action to counter money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.
FATF stated that the adoption of an open-ended mandate, on the 30th anniversary of the FATF, reflects the fact that these threats are enduring concerns for the integrity of the financial system, and that a sustained political commitment to fight money laundering, terrorist financing, and proliferation financing is required.
FATF is an inter-governmental policy-making body formed to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. Australia is a member of FATF.
Other financial services regulation
APRA consults on updated member outcomes assessment
On 30 April, APRA stated that it has commenced consultation on an updated prudential standard requiring registrable superannuation entity (RSE) licensees to assess the outcomes they are delivering for members.
APRA states that, following the passage of Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill 2019 last month, APRA has revised Prudential Standard SPS 515 Strategic Planning and Member Outcomes to clarify how the legislated outcomes assessment in the Bill interacts with APRA’s requirements.
A four-week consultation period is now underway. APRA states the new standard is still scheduled to commence from 1 January next year.
APRA makes a number of prudential standards
On 17 April, APRA made Banking, Insurance, Life Insurance and Health Insurance (prudential standards) determinations Nos. 1 and 2 of 2019, Insurance (prudential standard) determinations Nos. 1 to 9 of 2019, Life Insurance (prudential standard) determination No. 1 of 2019 and Health Insurance (prudential standard) determination No. 1 of 2019.
According to the Explanatory Statement, the purpose of each instrument is to revoke the thirteen existing prudential standards requiring consequential or minor and machinery amendments and replace them with corresponding standards which incorporate appropriate amendments.
The prudential standards which have been revoked and replaced are:
- Prudential Standard CPS 220 Risk Management;
- Prudential Standard CPS 510 Governance;
- Prudential Standard GPS 110 Capital Adequacy;
- Prudential Standard GPS 112 Capital Adequacy: Measurement of Capital;
- Prudential Standard GPS 113 Capital Adequacy: Internal Model-based Method;
- Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge;
- Prudential Standard GPS 115 Capital Adequacy: Insurance Risk Charge;
- Prudential Standard GPS 116 Capital Adequacy: Insurance Concentration Risk Charge;
- Prudential Standard GPS 118 Capital Adequacy: Operational Risk Charge;
- Prudential Standard GPS 120 Assets in Australia;
- Prudential Standard GPS 310 Audit and Related Matters;
- Prudential Standard HPS 310 Audit and Related Matters; and
- Prudential Standard LPS 700 Friendly Society Benefit Funds.
ASIC and APRA give guidance to trustees about Protecting Your Super laws
On 17 April, ASIC called on superannuation trustees to provide helpful and balanced communications to their members regarding the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 reforms, which are due to take effect on 1 July 2019.
APRA releases new Enforcement Approach
On 16 April, APRA released details on the future role and use of enforcement activities in achieving its prudential objectives.
APRA states that its new Enforcement Approach is founded on the results of its Enforcement Review, which has also been published as a final report.
APRA states that it would implement all the recommendations, including:
- adopting a ‘constructively tough’ appetite to enforcement and setting it out in a board-endorsed enforcement strategy document;
- ensuring APRA supervisors are supported and empowered to hold institutions and individuals to account, and strengthening governance of enforcement-related decisions;
- combining APRA’s enforcement, investigation and legal experts in one strengthened support team, and ensuring resources are available to support the pursuit of enforcement action where appropriate; and
- strengthening cooperation on enforcement matters with ASIC.
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