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08.04.2021

Publication

Financial Services Thinking – Issue 12

Financial Services Thinking is our monthly wrap-up of financial services regulatory news and important industry developments. This useful resource helps you keep track of the latest news at a glance. In this edition we share the latest from ASIC and Treasury.

You're welcome to share Financial Services Thinking with your friends and colleagues, and we value your feedback.


ASIC

CFD intervention order and binary options

ASIC's product intervention order imposing restrictions on the issue and distribution of 'contracts for difference' (CFDs) to retail clients took effect on 29 March 2021. The intervention order reduces the CFD leverage available to retail clients and prohibits the use of certain sales tactics.

ASIC saw the need to take action against CFD market operators following a review of the industry and public consultation.

ASIC has also made a product intervention order banning the issue and distribution of binary options to clients after an ASIC review revealed approximately 80 percent of retail clients lost money when trading in binary options.

Cost Recovery Implementation Statement

On 4 March 2021, ASIC released its 2019-20 Cost Recovery Implementation Statement which provides regulated entities (such as AFS licensees) with details about the costs of ASIC's regulatory activities for each industry subsector and how these costs will be recovered from the industry.

Virtual meetings and electronic signatures

ASIC has again taken a 'no-action' position in relation to the holding and convening of virtual meetings for corporations.  ASIC's no-action position will—

  • support holding meetings using appropriate technology
  • facilitate electronic dispatch of notices of meetings
  • allow public companies an additional two months to hold their annual general meetings.

ASIC has also indicated they will not be provided any further non-action position in respect of electronic signatures.

You can read more about ASIC's no action position for virtual meetings in our recent Alert.  For background information about these recent developments please see our alert Electronic execution, virtual meetings, and continuous disclosure in doubt.

We will keep you up to date with further developments.  If you need help understanding how this impacts you and what steps you need to take, then please contact us.  We can help.


Treasury

Breach Reporting Regulations

Treasury is currently seeking public consultation on draft regulation amendments and explanatory materials for changes to regulations supporting the breach reporting rules in Schedule 11 of the Financial Sector Reform (Hayne Royal Commission Response) Act. Schedule 11 implements recommendations following the Royal Commission which—

  • clarify and strengthen the breach reporting regime for financial services licensees in the Corporations Act
  • introduce a comparable breach reporting regime for credit licensees in the Credit Act
  • require financial services licensees and credit licensees to report serious compliance concerns about financial advisers and mortgage brokers.

Authors

Emma Donaghue

Emma Donaghue

Partner

Elliott Stumm

Elliott Stumm

Partner

Contact McMahon Clarke

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

Melbourne
T +61 3 9909 1400
A Level 2, 696 Bourke Street, Melbourne Vic 3000