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Financial Services Thinking – Issue 4

In this edition of Financial Services Thinking we wrap-up the latest news for the financial services sector to help you navigate the real issues and important developments.

We encourage you to contact our team who can help guide your business in these uncertain times so that you are best placed to manage and mitigate risk and seize new opportunities. You can also take a look at our Toolkit for Fund Managers which consolidates our thinking and commentary on some of the issues our funds management and real estate clients must manage in the coming months.

As always, we value your feedback. You are very welcome to share Financial Services Thinking with your friends and colleagues.

We hope you enjoy Financial Services Thinking!


ASIC's Cost Recovery Implementation Statement

The consultation version of ASIC's Cost Recovery Implementation Statement (CRIS) for the 2019-2020 financial year has been released. The CRIS details ASIC's actual regulatory costs for the 2018-2019 financial year (which were the basis for the industry levies invoiced in January 2020) and provides an estimate of costs for the 2019-2020 financial year. The CRIS can be used to estimate industry levies that will be invoiced in January 2021. However, as senior associate Kristy McCluskey discussed in Fundamental earlier this year, the estimate and the actual costs can vary significantly. Click here for a summary of the indicative levies most relevant to the funds management sector, or click here for the CRIS. Feedback on the CRIS can be provided to ASIC until 24 July 2020.

Interim Corporate Plan

ASIC has modified its strategic planning process for the 2020-21 year and released an Interim Corporate Plan setting out its revised priorities as a result of the COVID crisis. ASIC's priorities for tackling the challenges over the coming year are:

  • protecting consumers for harm in a time of increased vulnerability
  • maintaining resilience and stability in Australia's financial system
  • supporting businesses to respond to the effects of COVID-19
  • identifying, disrupting and taking enforcement action against harmful conduct
  • building an organisation's capacity.

For more information click here.

Revised timetable for ongoing work

ASIC has released a revised timetable of ongoing work which includes indicative timing for the following projects:

  • Product intervention power—June 2020.
  • Review of competition in the investment management industry—July/August 2020.
  • Product design and distribution obligations—Q3 2020.
  • Changes to fees and costs disclosure requirements for managed funds and superannuation—September 2020.

The full timetable is available here.


Stamping Fee Amendment

In early June this year, Treasury sought stakeholder input on the Corporations Amendment (Stamping Fee Exemption) Regulations (Stamping Fee Amendment). The Stamping Fee Amendment proposes to extend the ban on conflicted remuneration to stamping fees paid in respect of listed investment companies and listed investment trusts. Under the Stamping Fee Amendment, the existing stamping fee exemption would be retained for trading companies, REITs, and listed infrastructure entities. It is expected that the stamping fee exemption will be abolished from 1 July 2020. For more information click here.

Foreign investment review reforms

Treasury recently announced that comprehensive reforms to Australia's foreign investment review framework will take place. The Government is expected to release exposure drafts soon for public consultation and the reforms are expected to come into force from 1 January 2021. The reforms focus on:

  • protecting Australia's national security
  • streamlining less-sensitive investments
  • providing stronger penalties, compliance, and enforcement powers
  • maintaining the integrity of the foreign investment review framework
  • providing more co-ordinated information gathered and sharing
  • providing a timely, consistent, and reliable investor experience.

For more information click here for an article by partner Mark Lyons which highlights the significant expansion of transactions now requiring FIRB approval. Our lawyers understand the changes and can assist with your questions and explain how to develop the best strategy.

Legislation and cases

Continuous disclosure obligations

The Corporations (Coronavirus Economic Response) Determination (No. 2) 2020, which reduces the liability of companies and officers for failing to meet their continuous disclosure obligations, takes effect from 26 May 2020 and is expected to be in place for six months. It means the continuous disclosure provisions of the Corporations Act will only be breached where there is 'knowledge, recklessness or negligence' by the company or officer when failing to make an information disclosure.

Our Funds Management lawyers can explain these changes and answer your queries. You can also click here for a recent article outlining some of the critical questions for fund managers.

In the news

Australian Financial Complaints Authority

The Australian Financial Complaints Authority (AFCA) has received more than 3,100 COVID-related financial services complaints since the virus was declared a pandemic in March. AFCA has indicated that most of the complaints relate to residential lending and early release of superannuation claims.

Click here for an article by partner Selina Nutley explaining how AFCA's wide jurisdiction can impact the likes of fund managers.

Hot tip!

A recent matter highlights the importance of ensuring all documents within your structure work together and within the law. In particular, an outsourced trustee that requires a notice period for its retirement should ensure the person/s required to give the notice cannot rally investors to call a meeting to remove the trustee and circumvent providing the notice. Our Funds Management lawyers regularly deal with these types of questions and can help you prepare a co-ordinated response.


Emma Donaghue

Emma Donaghue


Contact McMahon Clarke

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