In this edition of Financial Services Thinking, we wrap-up the latest news for the financial services sector and share a hot tip reminding trustees not to exceed their powers when granting a lease over trust property.
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On 30 July 2020, ASIC released updated requirements for financial services firms dealing with complaints from consumers and small businesses through their internal dispute resolution (IDR) procedures. Regulatory Guide 271: Internal dispute resolution (RG 271) sets out the updated requirements developed by ASIC following an extensive research process involving consultation with Australia's big four banks. ASIC intends RG 271 to provide fair and timely outcomes for complainants by focusing on:
ASIC has released a minor change to Regulatory Guide 97 (RG 97) which deals with the disclosure of fees and expenses in PDSs and periodic statements from retail fund managers and responsible entities (REs). These latest changes, which follow the major amendments discussed in the July issue of Financial Services Thinking, provide minor technical refinement in relation to—
The amendments also clarify some definitions for consistency with the related legislative instrument. For background information visit our Hot Topics for Fund Managers.
ASIC has published an article reminding REs of their obligations to ensure the valuations of their managed fund assets are regular and reasonable. While acknowledging that the valuation of illiquid assets is more difficult due to COVID-19, ASIC emphasised that REs should also ensure they provide their members and investors with timely, full, and fair disclosure of asset values. ASIC also said REs should inform their members about the processes they are implementing to support the valuations given the current circumstances and uncertainties.
Please click here for a recent article by Sean McMahon and Elliott Stumm. If you need help with understanding your obligations and the issues around the valuation of scheme assets, our Funds Management team can help.
The Australian Government is seeking stakeholder views on the exposure draft of the Foreign Investment Reform (Protecting Australia's National Security) Bill (Bill). The Bill is intended to give effect to the major reforms of the Foreign Investment Review Framework which we discussed in the June edition of Financial Services Thinking. Following public consultation, which closes on 31 August 2020, the Bill is expected to be introduced during the Spring sitting of Parliament.
For background 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.
Public submissions on AUSTRAC's proposed amendment to Chapter 46 of the Anti-Money Laundering and Counter-Terrorism Rules closed on 12 August 2020. The proposed amendments aim to provide simpler and less prescriptive rules regarding special circumstances for the applicable customer identification procedure.
The monetary threshold to be considered a 'consumer' has increased from $40,000 to $100,000 to take account of the increased cost of living and inflation since the threshold was introduced in 1986. The Treasury Laws Amendment (Acquisition as Consumers—Financial Thresholds) Regulation 2020 amends both the Australian Consumer Law and Australian Securities and Investments Commission Act.
APRA has announced the recommencement of most of its planned policy and supervisory initiatives as well as the issuing of new banking, insurance and superannuation licences. The issuing of new licences was halted in April due to COVID-19 disruptions while policy and supervisory initiatives were put on hold in March. For more information click here.
Trustees of trusts established in Queensland need to ensure they are acting within their power when granting a lease over trust property. There is a little known provision of the Trusts Act that requires a trust deed to provide a specific power to grant leases where the term of the lease exceeds 30 years (including any options granted) for a building lease or 21 years (including any options granted) for any other lease. Our Funds Management lawyers can help with your queries and explain the impact.