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 key developments from the past week for you to consider. 

Subscribe here: ONLINE LINK

1. ESG / Super: The ABC has released a piece of investigative journalism which concludes that "Almost all of Australia’s big super funds offer their members an investment option that avoids environmentally unsustainable industries like coal, oil and gas…Most of them also promise to exclude investment in industries like tobacco, gambling, uranium, alcohol and weapons".  It underscores the focus on ESG, and the super sector more broadly - a key focus of ASIC's in its 2024 corporate plan.  It is phenomenally tricky balancing maximum returns to members, which the fund needs to do under their fiduciary obligations, with growing ESG demands.  And it is always interesting when worlds collide i.e. media, and regulation: our ESG team will be busy.

2.  Premium increases (Life Insurance):  APRA and ASIC have issued a letter setting out their regulatory expectations and areas for further industry focus in relation to future life insurance premium increases, disclosure and marketing materials, and product design.  (Expect them to treat this letter as being personally sent to each LI privately, if you are in the space, based on our experience.) The letter is here, and essentially stresses the need for them to: have sound risk management and compliance assurance around re-rating practices and ensure any contract terms allowing for premium increases are transparent and not unfair; clearly explain how premiums are calculated and may change over the life of the policy; and design and price life insurance products factoring in consumers’ need for premium stability.  One to definitely cover in FAR implementations in 2024 (see a brief video of FAR / practical pitfalls we've done here). 

3. AUSTRAC / DCEs: as an early Christmas present (for some) AUSTRAC has published its regulatory priorities for 2024 (see here). To no surprise, the enduring priorities of the regulator are ML/TF risk, AML/CTF programs, reporting (IFT, TTR, SMR) and managing high-risk sectors such as banking, gambling and remittance. AUSTRAC also announced its increased regulatory focus on: digital currency exchanges; payment platforms; bullion; and, non-bank lenders and financiers,
as a result of rapid growth in these sectors, concerns about AML/CTF compliance, variance in compliance levels between reporting entities in these sectors, and AUSTRAC intelligence and partner agency concerns.

4. Financial Markets Infrastructure: The financial market infrastructure (FMI) package announced at the end of 2022 has been released.  In essence, it includes powers for the RBA to step in and resolve a crisis at a domestic clearing and settlement facility e.g. ASX 24 for derivatives to ensure the continuity of critical clearing functions. It also strengthens ASIC's and the RBA’s licensing, supervisory and enforcement powers over FMIs.  A sensible move, and following the ASX being in the headlines much of this past year, you can read the consultation paper here. 

5. Reminder: while many firms shut down over Christmas / New Year, RG 78, RG 271, SMRs and other pieces of regulatory infrastructure do not. Our FS Regulatory Partners (Avryl, Matt & Liam) of course know this, so if issues arise during our firm's shutdown between 22 December and 8 January), you can reach out here: liamhennessysupport@clydeco.com and we will triage to support you. 

Learn more about our global regulatory and investigations team here.