Australia's current financial services regulatory & compliance landscape is changing rapidly - Clyde & Co's weekly Regulatory Roundup will ensure you are up to date with the most important changes. In each edition, we will set out five key developments from the past week for you to consider.
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1. APRA Corporate Plan: the prudential regulator has released its corporate plan for FY 23 / 24 (see here). Key priorities include: focus on operational resilience e.g. cyber resilience; climate-related financial risks; improving super transparency; and, cross-industry stress-testing in the context of rising interest rates and high inflation.
2. ASIC Corporate Plan: the conduct regulator has released its corporate plan for FY 23 / 24 (see here). Core priorities include: scams; crypto; cyber & operational resilience; DDO and sustainable finance. The latter two are also 'strategic priorities', which are an especial focus over the next 4 years. For example, for DDO, ASIC's strategic priority is to: "Reduce the risk of harm to consumers of financial, investment, credit and credit-like products, caused by poor product design, distribution and marketing, especially by driving compliance with design and distribution obligations".
3. RBA Corporate Plan: the RBA has released its corporate plan for FY 23 / 24 (see here). It largely revolves around implementing the recommendations from the independent Review of the Reserve Bank of Australia in April 2023 (see here) e.g. "Constructive challenge and openness to diverse viewpoints" (recommendation 11.3). There are five key objectives: price stability and full employment; the stability of the Australian financial system; a secure, stable and efficient payments system; efficient and effective banking services to Australian government agencies; and, provision of secure and reliable banknotes. Expect a lot of change around the payments system aspects given the large review in that space, and growing importance of blockchain technology.
4. Hardship: ASIC has sent an open letter to 30 large lenders calling on them to support those undergoing hardship, including through: proactively communicating how and when customers can seek assistance; genuinely considering customer circumstances to develop sustainable solutions where possible; and, communicating regularly with customers throughout and at the end of the assistance period. It has also said that this area will be an increased focus of ASIC over the next 12 months i.e. increased supervisory and potentially enforcement action. You can read the letter here.
5. Digital assets: a People’s Court in China has recognised digital assets as being legally "property" - despite them remaining banned. The Shanghai No. 1 Intermediate People's Court publicly announced an appeal for a Bitcoin foreign property damage compensation dispute - the second Court trial’s findings indicated that Bitcoin is a digital asset and should be protected by the law. For the world's second largest economy, any sign that it is taking small steps towards opening up to digital assets is a noteworthy one.
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Environmental, social, and governance (ESG) issues are driving some of the biggest and fastest changes to financial reporting and disclosure standards in a generation. (Joe Longo, ASIC Chair)