General

ASIC seeking to enhance banning power

The ASIC Enforcement Review Taskforce (Taskforce) is seeking to enhance ASIC’s banning powers, to ensure ASIC can take action to ban senior managers from managing financial services business. The Taskforce has made two key recommendations to increase the banning powers. 1. Whilst ASIC currently has the power to ban a person from providing financial services, the Taskforce has recommended the powers be broadened to allow ASIC to ban a person from: Performing a specific function …

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ASIC consults on add-on insurance reforms

ASIC is seeking feedback on proposals to reform the sale of add-on insurance through car dealerships. Consultation Paper 294 sets out ASIC’s approach and proposed reforms in detail. The reforms would see the introduction of: A deferred sales model ASIC proposes to introduce a deferred sales model which would insert a pause in the sales process for add-on insurance products. The proposal is that a period of between 4 to 30 days must elapse before …

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Enforcement report confirms ASIC’s focus for remainder of 2017

On 22 August 2017, ASIC released a report regarding its enforcement outcomes from the first half of 2017. The report also flags what the focus of ASIC’s enforcement activity will be over the next six months (1 July to 31 December 2017). Consumer credit continues to be a key focus for ASIC, as do obligations of Australian financial services (AFS) licensees. In the first half of 2017 the majority (59%) of ASIC enforcement in relation …

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CCI sales process to be overhauled

ASIC has recently announced the establishment of a Consumer Credit Insurance (CCI) Working Group, who have been tasked with improving outcomes for CCI customers. The CCI Working Group will progress a range of reforms. A key reform will be the introduction of a deferred-sales model for CCI sold with credit cards over the phone and in branches. This means that banks will be prohibited from selling a CCI policy until at least four days after …

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Breach reporting obligation repealed for group purchasing bodies

Group purchasing bodies (GPBs) are no longer required to report breaches of the conditions of relief provided by ASIC Class Order 08/1 (Class Order). The obligation to comply with the breach reporting condition in the Class Order was due to commence from 30 June 2017 but has been repealed. GPBs are persons who arrange or hold cover under risk management products for others but neither issue risk management products (except for interests in a risk …

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ASIC industry funding model introduced

Late last year the Government announced it would introduce an industry funding model for ASIC (our previous update on this can be found here). The ASIC Supervisory Cost Recovery Levy Bill 2017 and related bills have now passed. Effective from 1 July 2017, ASIC’s regulatory costs will be recovered through annual levies from all industry sectors regulated by ASIC. The amount of the levy will be worked out in accordance with regulations. Whilst the relevant …

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ASIC Report into financial advisers

As part of its Wealth Management Project, Australian Securities and Investments Commission (ASIC) has released its report into how effectively Australia’s largest financial institutions oversee their financial advisers. The report is based on a 20-month project instigated by information received by ASIC about non-compliant advice, as well as public concerns about wider problems in large advice firms. The full report is structured in three key phases and can be accessed here. Phase 1: How the …

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Senate Inquiry into ‘non-confirming’ building products is wrapping up

On 23 June 2015, the Senate commenced a wide-ranging an inquiry into the use of ‘non-conforming’ building products (being products and materials that do not meet required standards). The inquiry was launched following a 2014 fire in a Victorian apartment complex involving the use of aluminium composite panelling. The due date for reporting has been extended several times, and the report is now due to be released on 25 May 2017. The long awaited and …

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The Victorian Building Authority fires up for further audits

Following the Lacrosse fire in Melbourne’s Docklands in late 2014, the Victorian Building Authority (VBA) conducted an audit of non-compliant wall cladding systems of high rise buildings in inner city Melbourne. By way of background, the Lacrosse building was clad in aluminium composite panelling, and it is alleged that the panelling (with a combustible core) contributed to the fire’s dramatic spread up the exterior façade of the building, causing significant property damage. The VBA’s audit …

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ASIC reveals ‘hot spots’ for the insurance industry in 2017

Last week Greg Medcraft, the chairperson of the Australian Securities and Investments Commission (ASIC), delivered a speech to the Insurance Council of Australia Annual Forum on the current insurance environment and ASIC’s priorities for the coming year. Current environment The speech commenced by noting that 2016 was an eventful year for the insurance industry. In particular, Medcraft noted the impact of technology and social media and the impact that technology is having on consumer empowerment. …

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