Our final edition of Financial Services Thinking for 2020 gives a quick snapshot of the latest news for the financial services sector. We also highlight a warning about FASEA's new educational requirements and authorised representatives holding themselves out as financial advisers.
We hope Financial Services Thinking is a useful and informative resource, and we look forward to sharing this publication with you again in 2021.
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With our best wishes for the holiday season.
Following the recent release of Consultation Paper 332: Promoting access to affordable advice for consumers (Consultation Paper), ASIC is seeking input from industry stakeholders to help the regulator understand—
Submissions close 18 January 2021. The Consultation Paper is part of a broader piece of work by ASIC about improving access to personal advice for consumers. For more information click here.
ASIC has published a new report on Australia's 'buy now pay later' industry which reveals substantial growth since ASIC's initial review. Here are a few of ASIC's key findings:
ASIC has released its 2020 update on licensing and professional registration activities. The report outlines the key issues plus new and proposed changes to licensing processes. It also provides information and data on licensing and registration applications from the 2019–20 financial year. In summary:
Over the years, we have advised on hundreds of AFSLs, including the requirements for holding an AFSL, preparing AFSL applications, regulatory requirements, and compliance. Please contact Elliott Stumm or a member of our Funds Management team for further information about our AFS and credit licensing services.
ASIC's annual report was recently tabled and provides a record of ASIC's activities and performance for the previous financial year. The report highlights the impact of ASIC's 'why not litigate' approach with—
ASIC has made a product intervention order imposing conditions on the issue and distribution of contracts for difference (CFDs) to retail clients. From 29 March 2021, the intervention order will:
Treasury recently sought public feedback on the Government's proposed amendments to the national consumer credit framework in relation to individuals and small businesses.
The changes are aimed at reducing the time it takes for individuals and small business to access credit while maintaining strong protections for vulnerable consumers. One aspect of the reforms amends the existing responsible lending obligations with a risk-based regime that allows lenders the flexibility to make decisions based on the characteristics of the borrower and the type of credit.
The new measures, if accepted, will come into force on 1 March 2021.
The Government has announced changes to Australia's insolvency framework aimed at better serving Australian small businesses, their creditors, and their employees. The changes will introduce new processes suitable for small businesses, reducing complexity, time, and costs for small businesses. The changes will enable more Australian small businesses to quickly restructure. Where a restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.
Treasury is currently undertaking a process of public consultation on these reforms which is open until 24 November 2020.
If the legislation is passed, the insolvency measures will come into effect from 1 January 2021.
If you need more information about these changes please contact a member of our Litigation team.
In ASIC v Secure Investments Pty Ltd, the Federal Court said a loan agreement offered by an investment company constituted a financial product under the Corporations Act. The Court based this decision on the circumstances where the borrower used the contribution under the loan agreement to generate a return for the lender.
Our Funds Management lawyers can help with any queries you may have about what this decision means for your business.
Under the new FASEA Code of Ethics, authorised representatives cannot hold themselves out as financial advisers unless they meet the new educational requirements imposed by FASEA.
The education requirements apply to new advisers from 1 January 2021, while existing advisers have until 2022 for the FASEA exam and 2026 to complete a bachelor's degree.
If you need more information about these requirements and what the Code means for authorised representatives our Funds Management team can help.