This edition of Financial Services Thinking highlights the latest developments from ASIC, Treasury and APRA, as well as the recent High Court decision in the Westpac case. We also share a Hot Tip about electronic communications.
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ASIC has released a warning to investors about the rise in imposter bond investment offers where scammers pretend to be associated with well-known domestic and international financial service firms and offer high yield bonds to investors. ASIC is aware of two such scams currently operating in Australia and numerous instances overseas.
ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787 was originally due to sunset on 1 October 2030 but will now end on 22 August 2025. ASIC’s decision to reduce the term was driven by concerns raised by a Senate Committee and the overlap between matters addressed by the instrument and the recommendations in the final report of the Parliamentary Joint Committee inquiry into litigation funding and the regulation of the class action industry.
Contact Elliott Stumm or another member of our Funds Management team to learn more about the application of the financial services regime to litigation funders. You can also click here to view our recent Alert about the final report of the Parliamentary Joint Committee.
ASIC has just released an immunity policy for certain contraventions of the Corporations Act, including serious offences such as market manipulation, insider trading, and dishonest conduct in the course of carrying on a financial services business. Under the new policy, an individual who thinks they may have engaged in contravening conduct with others can apply for immunity from both civil penalty and criminal proceedings. Applications for immunity under ASIC’s policy are only available to individuals, not companies. ASIC will assess whether an individual is eligible for immunity based on several factors, including:
Treasury is currently undertaking a public consultation process into the effectiveness of AFCA (the “one-stop shop for financial complaints”) in delivering against its statutory objectives. The information received during the consultation process will assist Treasury in undertaking its review of AFCA. The public consultation process closes on 26 March 2021.
APRA has released a statement outlining its policy and supervision priorities for 2021.
APRA’s policy priorities for 2021 include:
APRA’s supervisory priorities include:
In a recent decision, the High Court said Westpac had provided personal advice during an advertising campaign where individuals were encouraged to ‘roll-up’ their existing superannuation products into a single product issued by Westpac. Some of the Court’s key findings include:
You can read more about the Westpac case in our recent article about the implications for licensees and how it impacts the soon to commence design and distribution obligations. You can contact partner Selina Nutley from our Litigation team or a member of our Funds Management team to learn more about the decision and the implications it may have for your business.
In late 2020, a new deeming provision was added to the Corporations Act providing electronic communications are taken to have been received when they become capable of being retrieved by the recipient. This became relevant to one of our clients where an electronic communication was sent but not received due to the file size of the correspondence. As the communication could not be retrieved, the communication was deemed not to have been received.