THE WRAP - APRIL 2014

As this edition of THE WRAP goes to press, the financial services sector is facing a number of intersecting market and regulatory forces. Market conditions are improving both domestically and internationally, albeit slowly, unevenly and not without threat from political instability in some regions.

In Australia, financial services businesses are bedding down adapted business models and compliance arrangements in response to the recent wave of regulatory reforms, which include the Future of Financial Advice (FoFA), Stronger Super and Privacy law reforms.

While there is work left to do on the current regulatory reform agenda, the fact that we have moved into the implementation phase on a number of fronts is cause for increased optimism. In theory at least, businesses should have firmer ground on which to make commercial and strategic decisions, given there is greater certainty around the current regulatory and political environment. Indeed, we are seeing a gradual shift in perspective away from change management and toward business development. There is increased activity in terms of product development, innovation and mergers and acquisitions across the sector.

In this edition of THE WRAP, we give our perspective on some of the major forces impacting the broad financial services sector and how they relate specifically to wealth management. We also look at some of the issues that
are specific to wealth management businesses:

  • the intersection of the new privacy laws and the increasing appetite among financial services businesses for leveraging the value of customer data assets
  • the Government amendments to the FoFA laws, which were made not without substantial media noise and with the result that the amendments have now been paused. We look at what the amendments mean for scaled advice
  • providers of custody services will need to respond to ASIC’s new requirements, including new minimum standards and higher financial requirements
  • the Senate inquiry into the performance of ASIC provides the backdrop for our analysis of the pros and cons of enforceable undertakings
  • changes introduced by the Stronger Super reforms have brought about a rethink in group insurance arrangements. Default super funds must now provide minimum levels of cover and new requirements are targeted at ensuring insurance benefits do not get trapped in superannuation funds
  • the Federal Government’s recent announcements on tax reform have provided clarity for investment funds businesses regarding key tax changes.

As the sector tackles the issues discussed in this edition, we may pause to consider what the next wave of change may look like. In fact, this next wave is already upon us. We are already seeing attention focussed on the Financial System Inquiry (FSI) and CAMAC’s review of the establishment and operation of managed investment schemes. These are two significant, and to an extent overlapping, review initiatives. The broad terms of reference for the FSI have drawn a wide variety of suggestions for topics and areas of the industry which should come under scrutiny. The FSI and CAMAC reviews will gather pace over the coming months and have potentially broad ramifications. Running alongside these initiatives are a variety of other potential game changers for the industry, including the Asian region funds passport, TASA, FATCA/GATCA, OTC derivatives reporting, the investment manager regime and ASIC’s focus on complex investment products.

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Nikki Bentley

I understand the financial services industry and thrive on helping our clients in this industry succeed.

Nikki Bentley Partner

Nikki is the Group Leader of Henry Davis York's Corporate Group, which includes the legal teams for Corporate / Mergers & Acquisitions; Investments & Financial Services and Tax.

Nikki is a leading investment funds advisor specialising in financial services and corporate law.  She specialises in business establishment and structuring, fund establishment, funds merger and acquisition, product disclosure and distribution. Nikki leads HDY's corporate group which combines expertise from the Financial Services, M&A and Tax areas.

Nikki provides advice to leading Australian and global fund managers on a full range of corporate, commercial and regulatory issues facing their businesses. She has considerable experience in assisting clients with fund establishment (onshore and offshore), disclosure and distribution. Nikki regularly advises clients on establishing, buying, selling and restructuring their businesses. She also regularly assists clients responding to regulatory enquiries and investigations.

With more than 15 years funds management experience in private practice, government and as an in-house lawyer, Nikki's practice spans the range of funds management products, with particular expertise in hedge funds, property funds and equities.

Nikki is regularly involved in industry and government discussions on regulatory reforms impacting the Australian funds management industry. Nikki is a passionate advocate for the development of a new corporate collective investment vehicle because of the opportunities it could provide to grow the funds management industry. She is the Honorary Legal Counsel and Chair of the Regulatory Committee for the Australian branch of the Alternative Investment Management Association (AIMA) and is a regular participant on the Financial Services Council (FSC) working groups.

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Jon Ireland

I constantly strive for technical excellence and commercial outcomes that add real value for my clients.

Jon Ireland Partner

Jon has extensive experience in corporate and financial services law, specialising in complex transactions, funds management and investment distribution. Jon also advises on regulatory issues relating to the use of technology in financial services.

Jon provides advice to leading Australian and international financial services clients on the full range of corporate, commercial and regulatory issues facing these businesses. He has considerable experience advising them on establishing, buying into, selling and restructuring their businesses.

Jon regularly advises on funds management issues including fund structuring, disclosure, investment management and outsourcing arrangements. He has particular expertise in the area of investment distribution and has advised on key projects for platform operators and advice providers.

Recently, Jon has advised on the establishment of a fully digital investment platform, the negotiation of a material outsourcing arrangement for a global investment bank and a scheme modernisation project for a leading Australian fund manager. Jon has also recently advised on the establishment of the Australian operations of a global diversified financial services business, including regulatory and corporate issues related to its expansion.

Jon's clients value his advice on recent law reforms, including around product disclosure statements and the digital provision of financial services. Jon is consulting to the Committee for Sydney and is a regular participant on Financial Services Council working groups.

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Greg Reinhardt

Expert advice delivering commercial solutions.

Greg Reinhardt Partner

Greg is the Head of our Tax practice and is a recognised specialist in taxation law, advising clients across a range of industries in relation to income tax, GST, stamp duty and other state taxes.

Greg has particular expertise advising clients in the financial services sector, including managed investment funds, derivative markets, insolvency and restructuring.

He advises public and private companies, investment funds, foreign corporations and banks in respect of the tax implications of mergers and acquisitions, disposals, corporate restructures, property and infrastructure projects, financing and leasing arrangements, international taxation, financing transactions, property and infrastructure projects, managed investment schemes and other collective investment vehicles (CIVs) and tax due diligence as well as the establishment of new businesses in Australia.

Greg has published a number of articles on taxation law issues, particularly on the topic of making Australia a financial services hub, and is a regular speaker at conferences.

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Seema Mishra

I am passionate and focused on delivering outstanding outcomes for my clients.

Seema Mishra Special Counsel

Seema specialises in taxation law and provides income tax, GST and stamp duty advice to clients in a range of industries.

Seema is a Special Counsel in our Taxation practice.

She advises clients in the financial services, including funds management, industry, along with large domestic and multi-national corporations in relation to a range of issues, including the tax implications of mergers and acquisitions, disposals, restructures, international taxation, as well as banking, restructuring and insolvency matters and the establishment of new business in Australia.

Seema also advises clients in the not-for-profit sector on structuring issues, including the establishment of charitable funds.

Seema's experience has included both domestic and international secondments. She has authored a number of articles and publications, and is a contributor to the Australian Tax Handbook (published by Thomson Reuters).

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