The Treasurer has announced a six month deferral to the implementation of commitments associated with the Financial Services Royal Commission as a result of the impacts of the coronavirus on the resources of businesses.
Under the updated timetable for Bills not yet introduced, those measures that the Government had indicated would be consulted on and introduced into the Parliament by 30 June 2020, will now be introduced by December 2020.
The measures originally scheduled for introduction by December 2020 will now be introduced by 30 June 2021. Original Implementation Roadmap.
In relation to commencement dates contained in Royal Commission related exposure draft legislation issued prior to the coronavirus pandemic, the Government will also extend these dates by an additional six months.
Amended timetable for Bills not yet consulted on and introduced
Legislation to be consulted on and introduced by 30 December 2020
• Recommendation 1.7 – Removal of point-of-sale exemption
• Recommendation 1.15 – Enforceable code provisions for industry codes of conduct
• Recommendation 2.1 – Annual renewal and payment for financial advice
• Recommendation 2.2 – Disclosure of lack of independence of financial advisers
• Recommendation 3.1 – No other role or office for trustees of Registrable Superannuation Entities (RSE)
• Recommendation 3.2 – No deducting advice fees from MySuper accounts
• Recommendation 3.3 – Limitations on deducting advice fees from choice superannuation accounts
• Recommendation 3.4 – No hawking of superannuation products
• Recommendation 4.1 – No hawking of insurance products
• Recommendation 4.3 – Deferred sales model for add-on insurance
• Recommendation 4.4 – Cap on commissions paid to vehicle dealers for sale of add-on insurance products
• Recommendation 4.5 – Duty to take reasonable care not to make a misrepresentation to an insurer
• Recommendation 4.6 – Limiting circumstances where insurers can avoid life insurance contracts
• Recommendation 4.8 – Removal of claims handling exemption
• Additional commitment in response to Recommendation 4.2 – Restricting use of the term ‘insurer’ and ‘insurance’
• Recommendation 1.6 – Reference checking and information sharing for mortgage brokers
• Recommendation 2.7 – Reference checking and information sharing for financial advisers
• Recommendation 2.8 – Licensee obligations to report compliance concerns
• Recommendation 2.9 – Licensee obligations where misconduct by financial advisers
• Recommendation 3.8 – Adjustment of APRA’s and ASIC’s roles in superannuation
• Recommendation 6.3 – General principles for ASIC and APRA to co-regulate superannuation
• Recommendation 6.4 – ASIC as conduct regulator for superannuation
• Recommendation 6.5 – APRA to retain current functions for superannuation
• Recommendation 6.9 – Statutory obligation for APRA and ASIC to co-operate and share information
• Recommendation 6.14 – A new oversight authority for APRA and ASIC
• Recommendation 6.11 – Improving ASIC’s Board meeting procedures
• Recommendation 7.2 – Implementing the ASIC Enforcement Review Taskforce’s recommendations to improve the breach reporting regime
• Additional commitment in response to Recommendation 7.2 – Implementing the ASIC Enforcement Review Taskforce’s directions power recommendations
Legislation to be consulted on and introduced by 30 June 2021
• Recommendation 2.10 – A new disciplinary system for financial advisers
• Recommendation 7.1 – Compensation scheme of last resort
• Recommendation 3.9 – Extending the Banking Executive Accountability Regime (BEAR) to RSE licensees
• Recommendation 4.12 – Extending the BEAR to APRA-regulated insurers
• Recommendation 6.6 – Joint administration of the BEAR
• Recommendation 6.7 – Statutory amendments to facilitate co-regulation
• Recommendation 6.8 – Extending the BEAR to all APRA-regulated financial services institutions.
• Additional commitment – extension of the executive accountability regime to non-prudentially regulated financial entities to be administered by ASIC.
Draft Bill
In relation to commencement dates contained in Royal Commission related exposure draft legislation issued prior to the coronavirus pandemic, the Government will also extend these dates by an additional six months.
Parts of the Bill will commence after Royal Assent, other parts will now be delayed until January 2021 and other parts until October 2021.
No hawking of superannuation and insurance products
The new law will commence on 1 January 2021.
Breach reporting by financial service licensees and credit licensees
The new reporting obligations in the Credit Act apply to all reportable situations arising on or after 1 October 2021.
Reference checking and information sharing protocol in relation to financial advisors and mortgage brokers
The amendments will apply from 1 October 2021 to a representative appointed on and after 1 October 2021. The obligation to share information about representatives will apply to a request for information made on and after 1 October 2021.
Notifying clients of suspected misconduct
The obligation to investigate and remediate misconduct will apply from 1 October 2021.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
