Our insights - Henry Davis York

Regulatory Recap - September 2016

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Recent Key Developments

  • ASIC released Regulatory Guide 256, its guide to review and remediation of financial advice
  • ASIC released its Corporate Plan 2016-17 to 2019-20

  • CFPB fined Wells Fargo $100 million for secretly opening unauthorised accounts


  • ASIC's Corporate Plan outlined where it is investing its recent funding injection, unveiling a broad range of new surveillance activities, including projects relating to home loan fraud and breach reporting practices within the big four banks: > read more See also HDY's summary here

  • ASIC released Regulatory Guideline 256, its guide to review and remediation conducted by advice licensees seeking to remediate clients who have suffered loss or detriment as a result of misconduct or other compliance failure: > read more See HDY's summary here

  • Australian Small Business and Family Enterprise Ombudsman announced that it would undertake an inquiry into the adequacy of the law to address concerns raised by the Parliamentary Joint Committee on Corporations and Financial Services in its report, Impairment of Customer Loans, in relation to the banks' treatment of small business customers: > read more

  • ASIC announced that a number of large Australian banks would refund customers over $50 million in total, in relation to credit card fees, unclear fee disclosures and non-compliance with responsible lending obligations: > read more > read more > read more > read more

  • Parliamentary Joint Committee on Corporations and Financial Services will consider whether the life insurance industry needs further reform and better oversight by regulators, in a report due by 30 June 2017: > read more

  • RBA released its corporate plan for 2016-2017, with an overview of its key functions and purposes and the strategy it will implement to achieve them: > read more

  • Australian Council of Superannuation Investors released a report on CEO remuneration, opining that the decline in remuneration is a result of the two-strikes rule, which has seen boards engage with shareholders prior to the publication of remuneration reports and framework, in order to address investor and community concern about excessive pay: > read more

  • ASIC released the results of its review of interest-only home loans arranged via mortgage brokers, finding that over the past year, the proportion and value of interest-only home loans arranged by ADIs has decreased. ASIC also identified that mortgage brokers have higher rates of compliance with responsible lending obligations than lenders (based on a review of lenders in 2015): > read more

  • PF2 published a report about short-termism and its impact on corporate culture in the finance industry, noting how financial incentives drive a short-term vision that affects long-term financial performance. The report examines how this mindset contributed to the corporate collapses that caused the GFC and considers how organisations can take a more holistic approach to creating culture and long-term value: > read more

  • ASIC reported on its review of marketing of IPOs to retail investors, highlighting areas of concern (including the use of social media strategies) and providing ASIC's recommendations to improve marketing practices for IPOs in the future: > read more


United Kingdom

  • Financial Ombudsman is still receiving over 3,000 complaints per week in relation to payment protection insurance: > read more
  • FCA conducted a review of mortgage lenders' treatment of financially vulnerable customers, including how to identify them, mitigation strategies to assess the impact of interest rate rises and development of strategies for communicating with financially vulnerable customers: > read more 
  • FCA analysed transaction data and concluded that, contrary to popular belief, liquidity in the UK's corporate bond markets is not declining, perhaps due to banks reacting to costlier capital with less proprietary trading. However this has not, in turn, affected their market making activity in such a way as to impact liquidity: > read more

United States

  • Consumer Financial Protection Bureau fined Wells Fargo Bank USD100 million for its "widespread" illegal practice of secretly opening over 2 million unauthorised deposit and credit card accounts, charging customers USD5 million in fees and allowing bank officers to boost their performance. Wells Fargo has terminated 5,300 employees as a result of this practice and will refund customers and pay an additional USD85 million in other penalties: > read more
  • Wells Fargo announced that it would eliminate sale goals for all retail banking products as a result of the incident, with a view to reinforcing its service culture: > read more
  • SEC announced that its enforcement action from whistleblower tips had resulted in USD500 million in financial remedies, with the SEC's awards to whistleblowers surpassing USD100 million: > read more

Scott Atkins


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Nikki Bentley


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John Martin


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Kathy Merrick


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Claudine Salameh


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