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Financial Services Thinking – Issue 1

Introducing Financial Services Thinking – a quick new monthly round-up of the most interesting and important news items for the financial services sector from our Funds Management team.

Our aim is to help deepen your understanding of the real issues so that you can smartly navigate the most important developments from the likes of ASIC, AUSTRAC, APRA, and Treasury, as well as legislation and cases.

In each issue we'll ask for your feedback—and you are welcome to share Financial Services Thinking with your friends and colleagues who may find it valuable.

We hope you enjoy Financial Services Thinking!


  • Following a consultation period, ASIC has released a new framework for foreign financial services providers. Regulatory Guide 176 Foreign financial services providers now incorporates a new licensing regime for foreign providers and also provides some relief for foreign providers attempting to induce professional investors. For more information click here.
  • ASIC is currently consulting with industry operators to determine the best way to implement recommendations from the Hayne Royal Commission regarding advice fees, consents and independence disclosures. For more information click here.
  • On 26 February 2020, ASIC released an update on enforcement and regulatory work. In short, ASIC is increasing its enforcement efforts. In the past 12 months, the number of investigations conducted by the regulator has increased by 10 percent and the number of investigations into Australia's big four banks has increased by 52 percent.  For more information click here.  Our latest article on the response to the Hayne Royal Commission can be found here.  ASIC's pursuit of investigations and enforcement sends a clear message that financial service providers need to ensure their house is in order. Our team can help put your house in order and assist with any queries or concerns. Contact Selina Nutley or a member of our Funds Management team.
  • ASIC is also consulting on its proposal to grant relief to companies considering an initial public offering. The proposed relief will allow companies to communicate some factual information to investors prior to lodging a prospectus and allow companies, underwriters and managers to disregard interests obtained in a voluntary escrow arrangement from the takeover provisions. For more information click here.
  • The new product design and distribution obligations, which are set to be introduced mid-2021, are currently in a consultation period to gather industry feedback. The new obligations provide a framework for product issuers and distributers to develop and maintain effective product governance across the product life cycle.  For more information click here.  Our Funds Management team is closely following these developments and can help explain the new obligations.


AML/CTF Compliance Reports for 2019 must be completed by 31 March 2020.  The report is required under the Anti-Money Laundering and Counter-Terrorism Financing Act and addresses how reporting entities have met their AML/CTF compliance obligations for the year.  For more information click here.


APRA released its policy and supervisions priorities for 2020, including:

  • Strengthening crisis preparedness and developing a new prudential standard on recovery planning.
  • Reviewing the capital framework for deposit-taking institutions.
  • Maintaining financial resilience with a focus on recovery planning and stress-testing.
  • Encouraging underperforming superannuation funds to improve their performance or exit the industry.

For more information, click here.


Treasury is currently consulting with the industry on recommendations from the Hayne Royal Commission. The specific recommendations propose to extend the Bank Executive Accountability Regime (BEAR) to all APRA regulated entities. BEAR was enacted in 2018 and originally aimed to increase the accountability of the senior executives and directors of authorised deposit-taking institutions. For more information click here.

Legislation and cases

  • On 28 February 2020, the government concluded its exposure period for a series of draft bills intended to implement the last of the Hayne Royal Commission recommendations. The exposure period began on 31 January 2020, with an intention to introduce the bills into parliament by the middle of the 2020 year. The changes proposed by the bills range from a more stringent reporting regime for AFSL holders to a cap on vehicle dealer commissions. The bills also establish a new regulator, the Financial Regulator Assessment Authority, responsible for reviewing the effectiveness of ASIC and APRA. For more information click here.
  • The High Court ruled in favour of ASIC in a matter brought by the regulator against Michael King, chief executive of MFS Group prior to its collapse. The High Court said that when the term 'officer' is used in relation to a company the definition is extended beyond its ordinary meaning. This finding meant that King had breached his duties as an officer despite not holding the title at the time he contravened the Corporations Act. For more information click here.

In the news

  • ASIC continues its increased scrutiny of financial advisers and AFS licensees: in the last month the regulator has revoked six AFSLs and permanently banned several financial advisers.
  • Information from the Australian Financial Complaints Authority (AFCA) for the 2019 year revealed there was a 20 percent increase in complaints relating to mortgages. These complaints are believed to have arisen in response to APRA's new 30 percent cap on interest only lending, meaning banks are forced to move customers on principal and interest facilities. For more information click here.


Emma Donaghue

Emma Donaghue


Contact McMahon Clarke

T +61 7 3239 2900
A Level 7, 100 Creek Street, Brisbane Qld 4000