With 2024 now upon us, we bring to the fore our insights into the key reforms happening right now. Our FS Advisory team has also created a regulatory calendar to help you keep track of the upcoming important reforms.
Financial services regulation calendar
Ever wondered when a prudential standard is due to sunset? Whether a standard has been replaced? When that new piece of legislation will come into effect? What the Treasury or ASIC is planning for next month? Look no further than our Financial Services Regulation Calendar which sets out what we know of the government’s and regulators’ plans so far.
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Modernising the Payments System – A new licensing framework for Payment Service Providers
On 8 December 2023, the Treasury released a second consultation paper seeking feedback on proposed amendments to the Payments Systems (Regulation) Act 1998 (Cth). The Government is eager to ensure the payments system regulatory framework is fit for purpose in a modern Australian economy. After a successful consultation period on the topic in June, the Government has made further changes to its proposed amendments by altering the list of payment functions it intends to regulate, and by furthering the obligations it intends to impose upon entities who provide these services. With the goal of implementing these amendments some time in 2024, time is running out to get across these changes and ensure your business will be compliant in the future.
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The Consumer Data Right and Non-Bank Lenders: What the CDR means for you
The Consumer Data Right will begin its expansion into Open Finance by capturing Non-Bank Lenders and Buy-Now-Pay-Later product providers within its remit. Consumers will soon be able to request the sharing of product and consumer data from these entities. Data holders, beyond responding to consumer requests for data, will need to ensure compliance with relevant privacy and data-storing legislation, manage and maintain appropriate dispute resolution services, and keep proper records and make reports where appropriate to the ACCC. Compliance with the new CDR regime is not simply a technical update but is a significant legal and regulatory challenge.
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FAR is here!
The Financial Accountability Regime (FAR) has received royal assent and is ready to replace the previous Banking Executive Accountability Regime (BEAR). The new FAR is tasked with improving culture, governance, and accountability within financial services firms. On the face of it, while FAR does not radically differ from BEAR, the onus on senior manages to demonstrate they have taken reasonable steps to prevent regulatory breaches will be significantly higher. Entities will need to consider establishing frameworks which set out their expectations, provide adequate guidance material, and formal governance protocols to ensure that accountable persons can demonstrate they have taken reasonable steps to avert regulatory contraventions.
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Privacy Revolution? The Government’s response to the Privacy Act Review Report and the long road to reform
On 28 September 2023, the Government finally responded to the Privacy Act Review Report, following their release of the 2023-2030 Australian Cyber Security Strategy. The reforms to the Privacy Act are as important as ever, given the sharp rise in financial scams and fraudulent activity in the Australian economy. However, the Attorney-General’s response to the Privacy Act Review has taken a somewhat less robust approach to reforms than expected, with the Government agreeing to only 38 of the 116 recommended reforms set out in the Review. Several other reforms were agreed ‘in-principle’, but we are yet to see draft legislative proposals for any of the proposed amendments, agreed fully or partly.
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Authorised Push Payment Fraud and the Scam-Safe Accord – are we doing enough to protect Australians from scammers?
In 2022 alone, Australians lost more than $3.1 billion to scam activity. ASIC found that banking customers bore 96% of these total losses, with our banks only able to detect and prevent 13% of scam payments made by their customers. In contrast, the United Kingdom now operates a mandatory reimbursement scheme as part of its Contingent Reimbursement Model Code, with the banks bearing the cost of reimbursing customers where they have been allowed to send push payments to fraudulent parties. This article takes an in depth look into the varying legislative approaches taken to Authorised Push Payment Fraud in the UK and in Australia and considers whether we are really doing enough to protect Australians from the scourge of scammers.
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Navigating the upcoming prudential standard on operational risk
From 1 July 2025, all APRA regulated entities will be expected to comply with Prudential Standard CPS 230: Operational Risk Management, which will replace existing standards on outsourcing and business continuity management. Although this may seem like a problem for a later date, APRA expects regulated entities not to delay implementation, and compliance with CPS 230 will require significant uplift in the way Board’s manage and oversee their businesses operational risks.
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Thank you to the following Financial Services Advisory team members for their contributions to the above articles: Byron David, Senior Associate, Yvonne Nehme, Senior Associate, Freda Zacharia, Senior Associate, David Joughin, Senior Associate, Jordan Donaldson, Solicitor, Roshan Mohan, Solicitor, Will Gallett, Law Clerk and Hunter Gapes, Law Clerk.