Regulatory highlights February 2023

The hectic start to 2023 has certainly seen government policy and regulators create fireworks. Here’s our pick of news that has sparked the most attention.

Lend now, regulate later days are numbered

Treasury recently concluded consultation on options for supervising the buy now, pay later sector (BNP) amid concerns that the absence of key protections available to other products regulated by the National Credit Act are potentially creating consumer harm.

The three regulatory options that the government sought feedback on were:

1. Strengthening the BNPL industry code and imposing an affordability test
2. Require BNPL providers to obtain and maintain an ACL, plus introduce modified responsible lending obligations (RLOs) under the Credit Act
3. Regulating BNPL under the Credit Act, with full RLOs

BNPL providers are generally supporting Option 2, while stakeholders such as the MFAA and consumer groups are advocating for Option 3. Read More

Quality of Advice Review Final Report

The Federal Government has released the Final Report of the Quality of Advice Review, which aims to give more Australians access to high quality, affordable financial advice. Key concepts include capturing more advice under the definition of ‘personal advice‘ and replacing the best interest duty with an obligation to give ‘good advice‘. However, the Government is unlikely to consider reforms in the short term, while the Australian Law Reform Commissions review of the Corporations Act continues. Read More

APRA policy and supervision priorities for 2023

APRA has pledged a lighter policy load for 2023, recognising that regulated entities are focused on embedding prior major reforms and responding to challenges in the operating environment.

However, no sector has been spared in its devising of this year’s supervision priorities, which include:

• heightened supervision on cyber resilience through detailed assessments and rigorous pursuit of breaches
• embedding the capital reforms for banks and insurers
• continuing to hold trustees to account to improve superannuation member outcomes; and
• ongoing work to address challenges in the availability, affordability and sustainability of insurance.

Governance, risk culture, and climate risk also continue to be on APRA’s radar. Read more

AUSTRAC compliance reporting season

Listed companies are not the only ones in the midst of a reporting season. It’s also time for reporting entities to lodge their 2022 compliance report to AUSTRAC. Given that several questions have changed or been added since last year’s report, we recommend that organisations access AUSTRAC’s ‘Preview questions’ webpage to help them prepare. Compliance reports must be submitted to AUSTRAC by 31 March 2023. Read more

Government begins journey to demystify crypto world

The Federal Government has launched consultation into ‘token mapping’ – a foundational step in its commitment to developing appropriate regulatory settings for the crypto sector. This exercise will contribute to shared understanding of crypto assets in Australia’s financial services industry, including how existing regulation applies. Stakeholders have until 3 March 2023 to have their say on formulation of a fact‑based, consumer conscious and innovation friendly approach to crypto asset policy development. Read more