Financial Services space in Australia: Managing and simplifying regulatory shifts
In its recent media release, ASIC mentioned that it has withdrawn and updated certain regulations to make financial regulations simpler and more accessible.
Why does ASIC look to reduce the regulatory complexities?
ASIC’s multi-year program focuses on simplifying the regulatory complexities around the financial markets to enable
- Easily accessible regulatory information
- Improve interactions with ASIC
- Increases the effectiveness of reforms
- Reduce unwanted burden on investors and businesses.
What are the regulations that have been removed?
- Regulatory Guidance 64
The RG 64 is a regulatory guide issued by ASIC that explains the action ASIC will take against a company that fails to lodge its documents on time.
The annual returns, changes to office holders, and changes in the company’s registered office should be mentioned by the company secretary on time; failing which, ASIC will take necessary action.
This regulation is removed, as the regulations are removed or covered somewhere else.
Regulatory Guidance 40
The RG 40 is issued by ASIC to banks, building societies and credit unions to clearly disclose the transaction fees for everyday accounts, which include transactions and savings accounts.
This ensured that transparent pricing and consumer protection are maintained.
ASIC removed this guidance, as it is outdated or has been covered by more recent disclosures.
What are the regulations that have been changed?
Regulatory Guide 104
The Regulatory Guide 104 is issued by ASIC for firms that already hold or might newly apply for an Australian Financial Services (AFS) license.
This RG highlights the obligations a firm has to follow, even after obtaining the license.
The obligations might include
- The firm has to comply with financial services laws and regulations
- Should provide adequate arrangements for managing conflicts of interest
- The firm has to maintain proper financial, technological, and human resources to provide financial services efficiently and fairly.
- Review and implement compliance measures at regular intervals.
ASIC has mentioned that it has made minor and technical changes to this regulation to help improve accuracy and clarity for the industry.
- Regulatory Guide 205
This regulation outlines the responsibilities of credit licencees in Australia, which might include mortgage brokers, lenders and those who provide credit.
The obligations under RG 205 include,
- The credit activities are performed efficiently, honestly, and fairly.
- Adequate resources are maintained, and employees are well- trained.
- Compliance should be monitored, and credit representatives should be supervised.
- The firm should be able to identify and manage the conflicts that affect consumer outcomes.
- The licencees should have an internal dispute resolution process and hold Australian Financial Complaints Authority membership.
The ASIC has updated a few sections of this RG to improve clarity and accuracy.
The regular changes in the regulatory environment indicate that firms and businesses in Australia’s financial services sector must keep up with these changes to stay compliant and remain aware of which regulations exist and which do not.
At Sundaram Business Services, our processes help you strengthen your focus on navigating the evolving regulations, while we handle the repetitive back-office tasks.
