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. Super enforcement: ASIC will undertake targeted enforcement action in the coming months and into next year, in the super sector. Expect many more ESG actions, actions centred around member accounts e.g. duplication, pricing actions and more.  As the sector undergoes mergers, FAR implementations and has its own unique challenges e.g. aligning promises to members, with actions taken by investment managers - see the Active Super case as one example - our super sector is clearly in for a large 2024…

2. Stablecoins: The Bank of International Settlements has release a paper wonderfully titled “Will the real stablecoin please stand up?” Stablecoins are a subcategory of cryptoassets that aim to maintain a stable value relative to a specified “peg”.  USDC, for example, is pegged to the USD and is a commonly used stablecoin. The paper examines a period of a decade and 68 stablecoins, and show that not one of them has been able to maintain sufficent parity with its peg at all times. You can read the paper here, which is a good summary in showing the need for further product development.  Especially, as central bank digital currencies are gaining more traction. 

3. Prudential updates: APRA is finalising several minor updates to the prudential framework, which are technical clarifications / do not change policy settings.  They cover 180, 210, 120 and 320 in terms of the prudential guides.  There is a critical point to be made here though - please do not rely on Googling prudential standards.  You will often get the wrong one, or an old one.  You always need to go to the website / check with your legal team or APRA supervisor if in doubt.

4. AML information sharing: Financial intelligence units across the Pacific met in the Cook Islands this week to discuss and commit to sharing financial intelligence, tradecraft and financial tools.  AUSTRAC has also provided the Cook Islands Financial Intelligence Unit  with a new data analytics system that will aid in the detection of money laundering and be used to combat criminal and national security threats. The world is globalising, and the regulators are no different - what is provided to the Australian ASIC on Monday may be in the hands of the UK FCA on Tuesday.  A good thing, as a strong global regulatory framework assists those businesses doing the right thing to thrive and protects consumers. 

5. CPS 511: the new prudential standard comes into play for non-SFI organisations on 1 January 2024.  Remuneration frameworks, and ancillary documents e.g. consequence management frameworks and variable remuneration artefacts, should be being tested and refined now before the end of season ExCo / board meetings.  We are undertaking many reviews across our team, and some but not all anticipate FAR in March 2025.  Do get in touch if we can be of any assistance!

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