Last month ASIC announced that it is calling upon product issuers to ensure distribution practices are ‘up to scratch’. This announcement follows the release of Report 795 Design and distribution obligations: Compliance with the reasonable steps obligation by ASIC. Alan Kirkland, ASIC Commissioner, has said that improvements across the board are still required to ensure that consumers feel confident that the financial products they purchase will suit their needs.
On 11 September 2024, the Australian Government released a much-anticipated bill which proposes to extend the anti-money laundering and counter-terrorism financing regime to real estate professionals, professional service providers including lawyers, accountants and trust and company service providers, and dealers in precious stones and metals.
On 13 September 2024, the Australian Government opened public consultation on the proposed Scams Prevention Framework. The Scams Prevention Framework introduces economy-wide reforms designed to combat scams and enhance consumer protections across multiple sectors including banking, telecommunications and digital platform services. Under the proposed regime, regulated entities in designated sectors will be required to take positive steps to detect, prevent and disrupt scams, with significant civil penalties for non-compliance.
The Federal Court of Australia has ordered wholesale licensee Lanterne Fund Services Pty Ltd (“Lanterne”) to pay a AUD 1.25 million penalty for failing to meet its obligations as an AFS licensee. This case is one of the first to litigate AFS obligations in the context of “license for hire” businesses. It provides some useful guidance to AFS licensees to work out what is a sustainable scale for authorizing Representatives for the business.
On 12 March 2024, the Australian Government released exposure draft legislation on Buy Now, Pay Later products (“BNPLs”) for public consultation. This follows the Government’s previous consultation on the regulatory framework for BNPLs, and growing calls to regulate the BNPL industry in order that these products might have similar or the same protections that exist for consumer credit products in Australia.
On 8 December 2023, the Australian Treasury released the Second Consultation Paper on “Payments System Modernization: Regulation of Payment Service Providers” that provides some further details on the proposed broadening of the licensing and regulatory framework for payment service providers. This follows the Treasury’s initial consultation conducted in June earlier this year.
ASIC Corporations and Credit (Amendment) Instrument 2023/589 was registered on 17 October 2023 to amend ASIC Corporations and Credit (Breach Reporting – Reportable Situations) Instrument 2021/716. The amendments modify the current reportable situations regime applicable to Australian financial services licensees and Australian credit licensees and apply from 20 October 2023.
The Government has released exposure draft legislation to update the Payments Systems (Regulation) Act 1998 (PSRA). This follows consultation conducted in June 2023 to “modernize” the application of the PSRA and to ensure the framework appropriately regulates emerging and future payment functions.
For the fourth time since its inception in September 2016, the Australian Securities and Investments Commission (ASIC) has extended the transitional relief period for Foreign Financial Services Providers (FFSPs) for a further 12 months until 31 March 2025. In its introduction of the ASIC Corporations (Amendment) Instrument 2023/588 on 4 August 2023, FFSPs have been offered a further extension on relief from the requirement to hold an Australian financial services license when providing certain financial services.