31 March 2021

2021: A year of financial services reforms – what you need to do and by when.

Most of the legislation to implement Government’s responses to recommendations of the Financial Services Royal Commission final report has been passed.  Many provisions commence in 2021.  We thought a timetable of the reforms and a couple of other reforms might be useful (see below).

Individual reforms should not be implemented in isolation.  For example how products are sold and distributed must comply with the stricter hawking prohibitions and the design and distribution obligations and for insurance products the new add-on insurance regime.  Compliance and governance processes will need to be updated.

Many of the reforms will necessitate new AFS licence or variations.  We expect a significant increase in applications for AFS licences and variations and recommend that applications be lodged as soon as practical.  Over the last 3 years ASIC has only approved about 300 AFSL applications per year.

Wait there’s more …

The timelines above cover the reforms that have been legislated.  There are a number of other reforms at various stages including:

  • new directions power for ASIC (exposure draft Bill released)
  • the Your Future, Your Super reforms, including stapling of superannuation accounts, introduction of the annual performance assessment by APRA, and introduction of the best financial interests duty (Bill introduced to Parliament), for further information click here
  • strengthening the security of Australia’s critical infrastructure including in the financial services and markets sector (Bill introduced into Parliament), for further information click here
  • ASIC to review the remaining exemptions to the ban on conflicted remuneration in 2022
  • financial accountability regime for all APRA regulated entities (Proposals paper released), for further information click here
  • retirement income covenant (RIC) for superannuation funds (deferred to 1 July 2022)

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