Our insights - Henry Davis York

Regulatory Recap - October 2016

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Recent Key Developments

  • ASIC, APRA, ACCC and the Big Four Bank CEOs appeared before the House of Representatives Standing Committee on Economics
  • The Treasurer announced that the government would strengthen regulation of the BBSW, including the introduction of criminal penalties for manipulation of financial benchmarks

  • Wells Fargo's CEO resigned following court and Senate scrutiny of the bank's cross-selling tactics, which led to the termination of 5,300 staff and the bank receiving USD185 million in fines


  • Treasurer Morrison announced that the government would strengthen regulation of the Bank Bill Swap Rate, following recommendations from the Council of Financial Regulators, including that the manipulation of any financial benchmark used in Australia be made a criminal and civil offence: > read more

  • Prime Minister Turnbull confirmed that the government would establish a new "low-cost, speedy" banking tribunal for customers, based on advice from Professor Ian Ramsey's review of external dispute resolution schemes in finance: > read more and see all public submissions here

  • FOS and CIO, which are subject to the review, raised concerns about the constitutional legitimacy of such a tribunal: > read more

  • ABA released its new Reference Checking and Information Sharing Protocol, as part of its 6-pillar plan to improve banking standards. All of the major banks and many smaller financial services licensees have adopted the protocol, which aims to improve reference-checking during the recruitment of financial advisers and promote better information sharing about advisers' performance history, include compliance records and advice quality: > read more

  • ABA released its guiding principles for customer advocates, who will be appointed by banks to identify areas where customer outcomes can be improved and assist with dispute resolution and remediation. The guiding principles are intended to help banks appoint their customer advocate and ensure the role is performed effectively: > read more

  • ASIC issued its industry review of life insurance claims, finding that, while life insurers are paying the considerable majority of claims, there are relatively high rates of declined claims for TPD cover (16%) and trauma cover (14%). It recommended public reporting of life insurance claims outcomes, at an industry and individual insurer level and sought higher penalties for misconduct in relation to insurance claims handling: > read more

  • FSC released its Life Insurance Code of Practice, setting out the life insurance industry's key commitments and obligations to customers on standards of practice, disclosure and principles of conduct. It also sets out timeframes for insurers to respond to claims, complaints and requests for information from customers: > read more

  • Minister for Revenue and Financial Services announced the terms of reference for the ASIC Enforcement Review Taskforce, which will examine the adequacy of ASIC's enforcement regime to deter misconduct and foster consumer confidence in the financial system. The appointed taskforce will report to the Government in 2017 with specific recommendations and what reforms should be progressed to best enhance ASIC’s enforcement regime: > read more

  • ABA released its second interim report on the progress of its package of reform initiatives. There have been some delays in the review of product sales commissions and product-based payments, however, “Good progress has been made to date on measures relating to ASIC’s review of client remediation programs and the ABA’s assessment of a mandatory last resort compensation scheme". Measures relating to the industry funding model and breach reporting guidance are likely to be implemented in December 2017, rather than June 2017 as initially proposed: > read more


United Kingdom

  • FCA 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 
  • Parliamentary Business, Innovation and Skills Committee commenced an inquiry ​​​​on corporate governance, focusing on executive remuneration, directors’ duties, and the composition of boards, including employee representation in boardrooms and gender balance in executive positions. This follows the Prime Minister's commitment to overhaul corporate governance: > read more 
  • FCA published a Feedback Statement entitled 'Smarter Consumer Communications', encouraging firms to be innovative and tailor the form and delivery of consumer communications to improve consumer choice, decision-making and outcomes: > read more



  • Wells Fargo's CEO announced his resignation following gruelling questioning by Senator Elizabeth Warren ( view video here ) in the wake of the bank receiving fines of over USD185 million for its illegal practice of secretly opening over 2 million unauthorised deposit and credit card accounts. He and the executive who ran the bank's retail banking division had previously agreed to forfeit remuneration totalling USD60 million: > read more
  • IBM accelerated the importance of "regtech" by purchasing Promontory Financial Group. IBM is hoping to automate the expertise of Promontory's advisers to enhance its Watson system of AI, so that it can be applied to the analysis of complex financial data. This could eventually lead to the automation of compliance functions: > read more
  • Consumer Financial Protection Bureau fined Credit Suisse USD90 million for misrepresenting how it determined a key performance metric of its wealth management business. It found that the chief operating officer of the firm’s private banking division pressured employees to apply a particular classification to high net worth and ultra-high net worth client assets, despite concerns raised by employees most knowledgeable about a particular client’s intent: > read more
  • SEC released its enforcement results for FY2016, stating that it filed 868 enforcement actions exposing misconduct relating to, amongst other things, financial reporting, market manipulation, financial fraud and insider trading schemes. The SEC was also focused on holding gatekeepers accountable. It awarded over USD57 million to 13 whistleblowers in FY2016, more than in all previous years combined. The agency noted that it continued to enhance its use of data to detect illegal conduct and expedite investigations: > read more

Anna Simmons

Senior Associate

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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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Victoria Taylor

Senior Associate

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