The Financial Sector Regulatory Initiatives Grid

15 March 2024


The Federal Government has unveiled plans to introduce a financial sector regulatory initiatives grid, with the hope that the business of regulating the financial services industry will be carried out in a more coordinated and coherent way.

The Government’s plans for the grid involve a rolling, 24-month forward looking program of planned regulatory initiatives that will materially impact the financial services sector, including banking, credit, insurance, superannuation, investment, payments, and capital markets entities.

A similar scheme currently exists in the United Kingdom, where the Financial Conduct Authority (FCA) publishes the ‘Regulatory Initiatives Grid’, twice yearly, covering a 24-month period.

The Australian Financial Sector Regulatory Initiatives Grid

The issues with Australia’s Financial Services Law

Last September the Customer Owned Banking Association (COBA) and the Australian Banking Association (ABA), met with Australian Treasurer, Jim Chalmers, to call for a ‘regulatory grid’, after they described their members as ‘sinking’ underneath the mass of uncoordinated financial services regulation. Since the Hayne Royal Commission, there have been 1175 pages of new laws and regulations introduced into the sector, with 130 different regulatory changes occurring over the same period. A report from the Australian Law Commission tabled in Parliament in early 2024 also made some 58 recommendations to simplify Australia’s financial services law.

In a speech delivered at the Australian Financial Review’s Business Summit, Australian Treasurer, Jim Chalmers, promised to introduce a financial sector regulatory initiatives grid to make sure the standard business of regulation is carried out in a ‘more co-ordinated and coherent way’. Dr Chalmers also stated a regulatory grid would allow regulators to avoid duplication while helping banks allocate resources more efficiently by reducing compliance burden and costs.

How will the Grid work?

The Government plans for the regulatory initiatives grid to cover a rolling, 24-month forward program that will be updated twice a year. The grid is to be established and administered by Treasury and will detail proposed legislation, rule, regulation and standard making, and consultation and data collection processes.

The grid is planned to include initiatives from agencies such as ASIC, APRA, the ACCC, the RBA and the ATO.

Currently, banks and financial service providers are dealing with a wealth of planned regulatory uplift as new schemes such as the Financial Accountability Regime, the Compensation Scheme of Last Resort, and the Consumer Data Right have all either taken effect or look to take effect this year. The RBA is also exploring Central Bank Digital Currency and retail payment changes, ASIC is targeting financial hardship obligations, and APRA has identified operational risk, macroprudential policy, data transformation and stress testing as key agenda items for 2024. Additionally, Treasury is looking at proposals for new rules relating to payments, digital platforms, and climate related disclosures, on top of a Privacy Act review currently being undertaken by the Attorney-General’s Department.

The UK Regulatory Initiatives Grid

Treasury has provided that the Australian ‘Regulatory Initiatives Grid’ will be modelled off the grid currently used in the UK. So how does the UK grid work?

The UK approach

The British regulatory grid was first proposed in the wake of the UK government’s drastic post-Brexit regulatory revamp of financial services law when European Union laws had to be replaced. The ensuing confusion and drastic uplift in IT systems, administration processes and compliance training required threatened to overwhelm the UK financial services industry’s capacity to adapt to the changes.

In response, the UK government created the Financial Services Regulatory Initiatives Forum (‘the Forum‘), which is responsible for determining the contents of the Regulatory Initiatives Grid and ‘setting out’ the regulatory pipeline. The Forum was launched to ‘further strengthen coordination between members’.

The Grid is published twice a year and details the timing of prospective initiatives over a 24-month period, highlighting where interconnected initiatives take place to improve stakeholder identification of updates which impact them.

The Forum is currently comprised of representatives of: the Bank of England, the Competition and Markets Authority, the Financial Conduct Authority, the Financial Reporting Council, HM Treasury (as an observer), the Information Commissioner’s Office, the Payment Systems Regulator, the Prudential Regulation Authority, and the Pensions Regulator.

Example UK grid entry

1 –

As seen in the example above, the UK Regulatory Initiatives Grid considers the potential impact of a legislative change on financial firms, details when formal engagements are planned, and specifies when a change will come into effect. The Grid also shows whether the initiative is likely to be of interest to consumers and/or consumer organisations. This may be because an initiative is expected to have a direct impact on retail consumers.

Next steps

If you have questions, or require assistance, in relation to how the Regulatory Initiatives Grid or any of the new regulatory regimes mentioned may impact your business, please contact the Financial Services Advisory team at HWL Ebsworth.

This article was written by Michael Anastas, Partner, and Will Gallett, Law Graduate.

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us