Our insights - Henry Davis York

Regulatory Recap - December 2016

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Recent Key Developments

  • Labor established a Senate inquiry to review the impact of misconduct in the banking and financial services sector
  • ASIC announced BMW Australia Finance Limited would implement Australia's largest consumer credit remediation program
  • Professor Ian Ramsay released his interim report on the review of the financial EDR framework, going against the Government's recommendation of a banking tribunal    


  • Labor established a Senate inquiry to review the impact of misconduct in the banking and financial services sector. The Senate Economics References Committee will review the regulatory framework for the protection of consumers, including small business, with particular reference to the following: the impact of misconduct in the sector on consumers, the impact of consumer outcomes on executive and non-executive remuneration, commission and fee structures, and the availability and adequacy of compensation and legal advice to victims of misconduct:  > read more
  • ASIC accepted an enforceable undertaking from BMW Australia Finance Limited, pursuant to which it will implement Australia's largest consumer credit remediation program to compensate customers for its responsible lending failures. It will provide consumers with over $72 million in redress in the form of remediation payments, loan write-offs and interest rate reductions on current contracts: > read more
  • Professor Ian Ramsay released his interim report on the review of the financial EDR framework, proposing two new ombudsman schemes: one for financial, credit and investment disputes and another for superannuation disputes. The report recommended the monetary limits and compensation caps for consumers and small business be increased and proposed enhanced accountability and oversight for the two new schemes. The final report will be delivered to the Government by the end of March 2017: > read more
  • Federal Government introduced client money reforms to protect retail investors, ensuring financial services firms can no longer use their retail clients' money for their own purposes: > read more
  • ASIC deputy commissioner, John Price, gave a speech outlining various proposals to help improve the position of whistleblowers: > read more
  • ACCC issued a draft determination to deny authorisation to CBA, Westpac, NAB and Bendigo and Adelaide Bank to collectively bargain with and boycott Apple on Apple Pay. ACCC stated its concerns that the conduct would reduce or distort competition between the banks individually negotiating with Apple and therefore reduce competition between the banks in the supply of mobile payment services for iPhones: > read more
  • ACCC lost its Federal Court proceedings against Woolworths Ltd in which it alleged Woolworths had engaged in misleading and deceptive conduct in demanding payment from a large number of its suppliers: > read more
  • Australian Law Reform Commission released its second discussion paper regarding elder abuse, which considers laws and frameworks to safeguard older persons from misuse or abuse by formal and informal carers and others. These include regulation of financial institutions and superannuation. The paper proposes a national online register of enduring powers of attorney and enduring guardianship documents. It also proposes amendments to the Code of Banking Practice to require banks to take reasonable steps to identify and help prevent the financial abuse of elders: > read more
  • ASIC released an overview of its decisions on relief applications for April to September 2016 showing in over 60% of cases ASIC approved applications for relief. The applications refused included an application for relief from the requirement to hold an AFS licence for the development and use of a digital advice tool: > read more
  • Federal Court fined construction company Hochtief AG $400,000 for insider trading, after it came into possession of information about the expected results of Leighton Holdings Limited shortly prior to Hochtief AG procuring the acquisition of shares in that company (via its Australian subsidiary): > read more
  • Treasury released a proposals paper on the design and distribution obligations and ASIC's product intervention power. This is in response to the recommendation from the Financial System Inquiry for new accountability obligations for entities that issue or distribute financial products and to strengthen consumer protection by introducing financial product intervention powers. The Government will undertake extensive consultation on the proposals: > read more
  • ASIC released class waivers to allow eligible financial technology businesses to test certain specified services without holding an Australian financial services or credit licence: > read more
  • ASIC reported on corporate insolvencies for the 2015-2016 financial year:  > read more​​


United Kingdom

  • FCA issued a consultation paper on broadening the £3.5 billion Financial Services Compensation Scheme, including extending compensation limits for pension products beyond the current £50,000 up to £1 million and making retail product providers cover the cost of failed intermediary firms. The FCA also sought views on making the riskiest financial services companies (in terms of their product offering or business model) pay more towards compensation: > read more
  • FCA issued a report on early arrears management in unsecured lending, finding that the majority of firms missed early opportunities to identify and offer appropriate forbearance to customers who were showing signs of financial difficulty: > read more

    United States

  • CFPB released its FY2016 annual report, highlighting its internal engagement and outreach initiatives: > read more
  • Yahoo disclosed a security attack in 2013 had compromised more than 1 billion user accounts. Together with its disclosure in September that 500 million accounts had been hacked in 2014, these are the largest known security breaches of one company's computer network: > read more
  • Deutsche Bank settled charges it misled clients about the performance of a core feature of its automated order router that primarily sent client orders to dark pools, agreeing to admit wrongdoing and pay US$18.5 million penalties to the SEC and New York Attorney General's office: > read more

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