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. 

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1. ASIC reorganisation: ASIC has announced new appointments to its executive leadership team as part of its ongoing transformation program. Peter Soros will join as Executive Director of Regulation and Supervision in November, transitioning from AUSTRAC, where he served as Deputy CEO. Chris Savundra will assume the role of Executive Director of Enforcement and Compliance. These changes are designed to build on ASIC’s largest organisational redesign in 15 years, aiming to strengthen its regulatory capabilities and modernise its operations.

2. Harvey Norman / Latitude: The Federal Court has ruled that Harvey Norman and Latitude Finance Australia engaged in misleading advertising by promoting a 60-month interest-free, no-deposit payment option without adequately disclosing that consumers were required to apply for a Latitude GO Mastercard. The advertisements, run between January 2020 and August 2021, misrepresented the nature of the financial commitment, potentially leading consumers to pay more than expected through ongoing fees and interest. 

3. CPS 230: APRA has released a material service provider register template as announced in the Response to submissions – CPG Operational Risk Management publication in June 2024. The template was developed to assist entities in demonstrating the linkages between their critical operations and the material service providers they rely upon, and is APRA’s preferred method for regulated entities to submit their registers to APRA for meeting the requirement of paragraph 51 of Prudential Standard CPS 230 Operational Risk Management (CPS 230). A completed material service provider register is to be submitted back to APRA by authorised deposit-taking institutions (ADIs), superannuation trustees, and insurers by 1 October 2025.  Start now if you have not already, as CPS 230 projects need to be cross-linked to FAR projects!

4. Consumer guarantees: The government is inviting feedback on proposed penalties for businesses that fail to provide consumer remedies, reimburse suppliers, or retaliate against suppliers seeking reimbursement under consumer law. The consultation aims to enhance consumer guarantees, which ensure rights like repairs, replacements, refunds, and compensation when goods or services fail to meet standards. It also focuses on improving supplier indemnification, where manufacturers must refund suppliers for fulfilling these consumer guarantees. The consultation paper is here. 

International perspective: BNP Paribas has released a report that states that as digital asset adoption evolves, 2024 is expected to bring a more mature phase for distributed ledger technology (DLT) and tokenisation. While 2023 marked a challenging period with high-profile crypto failures and regulatory actions, it also drove progress in risk awareness and regulatory frameworks, like the EU’s MiCA and DLT Pilot Regime. The focus is shifting towards incremental initiatives that enhance liquidity, settlement, and cross-border collaboration, including central bank digital currencies (CBDCs). BNP Paribas has stated that it will continue to engage with this evolving landscape, exploring blockchain integration across asset origination, trading, and custody, aiming to create seamless connectivity between traditional and digital assets.