Financial Services in Focus – Issue 3
Funds and financial products
Legislation introduced regarding the second and final phase of ASIC fee-for-services industry funding model
On 24 May the Government introduced into Parliament legislation for the second phase of the ASIC industry funding model, known as ‘fees for service’. Under the new regime, fees ASIC charges for specific activities are designed to reflect ASIC’s actual costs.
The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer, stated that the framework will ensure ASIC is transparent and held accountable throughout its periodic review in setting fee amounts by involving a public consultation process utilising a cost recovery implementation service.
Financial product advice
ASIC consults on code of ethics compliance schemes for financial advisers
On 15 May ASIC released its Consultation Paper 300 Approval and oversight of compliance schemes for financial advisers (CP 300) outlining its proposed approach to approving and overseeing compliance schemes for financial advisers.
ASIC states that ASIC will require high standards for compliance schemes and that the compliance scheme framework is key to the successful operation of the proposed code of ethics.
Responses to CP 300 are due by 28 June.
ASIC consults on short selling proposals
On 14 May ASIC released its Consultation Paper 299 Short selling: Naked short selling relief, position reporting amendments and sunsetting class orders (CP 299) seeking feedback on various proposals relating to both naked and covered short selling.
ASIC states that it is important that short selling continues to be regulated appropriately so that our market remains orderly and transparent, and that the proposals strike a balance between providing efficiency and certainty and reducing the burden of compliance for businesses, and managing the risks that short selling poses to market integrity
Responses to CP 299 are due by 20 June.
Legislation regarding international crimes co-operation
On 22 May the Crimes Legislation Amendment (International Crime Cooperation and Other Measures) Act 2018 received assent.
This Act contains 11 amending schedules which contain a range of measures to improve and clarify Commonwealth criminal justice arrangements.
AUSTRAC publishes consultation paper and draft Ministerial Determination for the 2018-19 industry contribution
On 23 May AUSTRAC published a Stakeholder Consultation Paper in respect of the 2018-19 industry contribution.
The purpose of the paper is to outline the proposed arrangements for the AUSTRAC Industry Contribution for the 2018-19 financial year.
Submissions are due by Friday 22 June.
ASIC and RBA welcome new bank bill swap rate calculation methodology
On 21 May the new bank bill swap rate (BBSW) calculation methodology commenced. ASIC states that the new methodology calculates the benchmark directly from market transactions during a longer rate-set window and involves a larger number of participants.
ASIC and the RBA expect all bank bill market participants to adhere to the ASX BBSW Guidelines and support the new BBSW methodology.
ASIC also intends shortly to make financial benchmark rules, on which ASIC consulted in 2017.
Other financial services regulation
Government releases proposed Financial Institutions Supervisory Levies for 2018-19
On 11 May the Government, in conjunction with APRA, released its proposed supervisory levies for 2018-19. The financial levies are intended to cover the operational costs of APRA for the 2018-19 financial year.
Submissions responding to the proposed levies are due 8 June.
Government releases its response to the Parliamentary Joint Committee on Corporations and Financial Services annual report
On 11 May the Government released its response to the Parliamentary Joint Committee on Corporations and Financial Services’ report on the 2015-2016 annual reports of bodies established under the ASIC Act.
The Government has noted the single recommendation of the Joint Committee. The recommendation is to the effect that ASIC investigate the feasibility of establishing a searchable public register containing information on the applications or waivers for relief currently in effect as well as indicative information for consumers regarding how they might be affected.
Government introduces legislation to appoint second Deputy Chair of APRA
On 24 May the Government introduced legislation to allow for the appointment of a second Deputy Chair of APRA.
The Treasurer, the Hon Scott Morrison, stated that the appointment of up to two Deputy Chairs will provide greater flexibility in the way in which APRA is governed and the allocation of responsibilities to each APRA member.
Government releases exposure draft legislation on the tax treatment of stapled structures
On 17 May the Government released exposure draft legislation and explanatory materials on the tax treatment of stapled structures, putting into place targeted integrity rules designed to neutralise the tax benefits of stapled structures.
The Treasurer, the Hon Scott Morrison, stated that an increasing number of foreign investors have sought to convert trading income into a more favourably taxed passive income through the use of stapled structures, and that the reforms are intended to ensure foreign investors do not have a competitive advantage over Australian investors.
Responses are due by 31 May.
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