March « 2006 « Australian Regulatory Compliance Review from Langes+ Lawyers

March 17, 2006

Queensland adopts uniform succession laws recommendations

The Succession Amendment Act 2006 amends the Succession Act 1981 (Queensland) to implement the recommendations of the National Committee for Uniform Succession Laws regarding the law of wills.

Significant changes effected by the Act include:
• the introduction of court authorised wills for minors and people who lack testamentary
capacity;
• replacing the substantial compliance requirement for the execution of wills with a testamentary intention test;
• removing the requirement that a will must be signed at its foot or end;
• introducing provisions to allow the admission of limited evidence to aid in the interpretation of wills;
• new rules about the effect of marriage on wills;
• new rules about beneficiaries and interpreters who witness wills; and
• new provisions about who is entitled to see a will on the death of the testator.

The changes are relevant to both individuals and businesses who deal with estates.

The changes apply only to a will of a person who dies after the commencement of the Act. Whilst the Act has been assented to, it has not yet commenced..

UPDATE: The Queensland Parliament passed the Succession Amendment Bill 2005 at its sitting on 14 February 2006 and this Act was proclaimed on 1 April 2006.

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Posted 17th March 2006 by David Jacobson in Business Planning

APRA superannuation trustee licensing deadline

The Australian Prudential Regulation Authority (APRA) has confirmed that superannuation trustees who have not already applied for a Registrable Superannuation Entity (RSE) licence must make
alternative arrangements for their fund members.

APRA gave notice on 3 February that it would not accept applications from existing trustees in the period 17 February to 30 June 2006. Under the Superannuation Industry (Supervision) Act 1993 (SIS Act), superannuation contributions cannot be remitted to an APRA-regulated superannuation fund after 30 June 2006, unless that fund has been registered and the trustee of the fund licensed.

APRA has received 325 RSE applications; APRA has so far issued 129 RSE licences with the remainder being assessed. 850 trustees have indicated their intention to exit the industry.

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Posted 17th March 2006 by David Jacobson in Financial Services

FSR: ASIC issues fees and costs disclosure guide

ASIC has issued a guide for product issuers to help them comply with the Corporations Amendment Regulations 2005 (No. 1) (the enhanced fee disclosure regulations) that were made on 10 March 2005.

The guide includes a series of questions and answers and draws together some commonly asked questions about compliance with the enhanced fee disclosure regulations.

The guide incorporates answers to five new questions (see questions A7 to A10 and B3) and earlier guidance given by ASIC on questions about fees and costs (see ASIC Information Release [IR 05-19] ASIC provides answers on some fees and costs questions (10 May 2005), ASIC Information Release [IR 05-28] ASIC compliance guidance on the FSR refinement proposals and fees template regulations (3 June 2005) and ASIC Information Release [IR 05-54] Further answers on some fees and costs questions (26 September 2005)).

The regulations apply to PDS’s for superannuation products from 1 July 2005 and other financial products, including managed investment products, from 1 July 2006.

The regulations also mandate certain transactional disclosures in periodic statements of product issuers of superannuation (from 1 July 2006) and of managed investment products (from 1 July 2007).

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Posted 17th March 2006 by David Jacobson in Financial Services

March 15, 2006

Regulation of the Australian Payments System

Speaking at a Payments System Conference 2006 at Melbourne Business School on 14 March 2006 Philip Lowe, the Reserve Bank Assistant Governor (Financial System) gave a snapshot of Australia’s payments system and possible changes:

1. the average number of cheques written per person in Australia has halved since the mid 1990s. Conversely, the average number of credit and debit card payments per person has more than doubled, as has the number of direct debits and credits.

2. Australians use more credit cards and less direct debits than other countries.

Key quotes:

“the shift towards electronic payments is undeniably global. It is driven by advances in technology and the lower cost of electronic payments, as well as the additional convenience that they can offer to consumers and businesses. There is much less certainty about how various individual methods of electronic payment are likely to evolve – which methods will be the winners and which will be the losers.

For much of the past decade or so – including at the time of the Wallis Inquiry – there have been numerous claims that smart cards or electronic purses were about to replace cash for many payments. Yet, while there have been some advances, relatively little has happened. On the other hand, use of the internet for banking has grown by much more than many thought likely in the mid 1990s…

In contrast to the difficulty we have in making predictions about particular products, we do have a reasonable handle on the factors that are likely to shape the evolution of the overall system. Developments in technology are clearly important, as is the willingness of consumers to adopt new technologies. Experience has also taught us that relative prices and costs are critical, as are the arrangements under which new firms enter the market. In addition, experience suggests that the way collective decisions are made is also important…

Exactly how the system evolves will depend, amongst other things, on the price signals that various users of the system face, on the extent to which potential entrants can participate in the market, and on decisions about the basic messaging architecture.”

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Posted 15th March 2006 by David Jacobson in Compliance, Financial Services

March 7, 2006

Victoria Consumer Credit Review

Consumer Affairs Victoria has published the Report of the Consumer Credit Review.

The Report sets out options for reform in areas including small amount short term credit, credit cards,
alternative housing finance and finance brokers. It also discusses concerns including responsible lending, access to financial counselling and dispute resolution services, and more sophisticated credit education programs.

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Posted 7th March 2006 by David Jacobson in Compliance, Financial Services

March 5, 2006

Trade Practices update

Legislation

At the end of 2005, the Government’s response to the Dawson Review, the Trade Practices Legislation Amendment Bill (No.1) 2005 was amended in the Senate. The Government announced that it wanted the Bill passed in its entirety and would re-introduce it. But no timetable has been announced yet.

However the Government has announced its intention to introduce the following Bills this year:

Trade Practices Amendment Bill (No. 1)
- implement the government’s response to the Senate Inquiry into the Effectiveness of the Trade Practices Act 1974 in Protecting Small Business

Trade Practices Amendment Bill (No. 2)
- introduce criminal penalties for serious cartel conduct and for related purposes

Trade Practices Amendment Bill (No. 3)
- better regulate component pricing; and make amendments in relation to the regulation of Australian energy markets and for related purposes

Trade Practices Amendment Bill (No. 4)
- amend the Trade Practices Act 1974 in response to the 2000 Ergas Review into intellectual property and for related purposes

The Trade Practices Amendment (Personal Injuries and Death) Bill was passed on 27 February 2006. The Bill excludes damages for personal injuries arising from misleading or deceptive conduct under the Trade Practices Act.

ACCC guidelines

Draft merger guidelines

Immunity Policy for cartel conduct

Draft Guide to Exclusive dealing notifications (including third line forcing)

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Posted 5th March 2006 by David Jacobson in Compliance, Trade Practices

March 3, 2006

Privacy case notes

The Federal Privacy Commissioner has published case notes 1 – 4, 2006.

The cases relate to personal information handled by a credit provider, a banking institution, insurance company and an Australian Government agency.

Of particular interest is D v Banking Institution [2006] PrivCmrA 4 in which the complainant alleged that the banking institution was gathering unnecessary marital status information for the purposes of opening a deposit account.

The banking institution advised the complainant that it was unable to open the account without entering information into the ‘marital status’ field on its computer system. It offered a ‘workaround’ as system changes could not occur quickly. (The workaround was that it would use the response of “single” in the mandatory data field, and it would include a note stating that the entry may not reflect actual marital status.)

The Commissioner’s view was that the collection of marital status information for the purposes of opening a deposit account was unnecessary. The banking institution agreed that the collection of marital status information would not be considered necessary for its functions or activities; in this case because the complainant’s marital status had no bearing on the complainant’s eligibility to open the account. In consultation with the Commissioner the banking institution agreed that it would change its computer system so that when individuals applied for a deposit account, they would no longer be required to disclose their marital status if they did not wish to. Further the banking institution agreed to report to the Commissioner on the progress of the implementation program and would also raise the matter with its industry body as it appeared to be an industry-wide practice.

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Posted 3rd March 2006 by David Jacobson in Compliance, Privacy

APRA releases new “fit and proper” prudential standards for ADI’s , life companies and general insurers

The Australian Prudential Regulation Authority (APRA) has released three new fit and proper standards: APS 520 Fit and Proper (for authorised deposit-taking institutions), LPS 520 Fit and Proper (for life companies) and GPS 520 Fit and Proper (for general insurers). The standards come into effect from 1 October 2006.

The framework consists of principles-based prudential standards and separate prudential practice guides, which provide non-binding guidance on meeting these new standards and on prudent practices in fit and proper matters.

Prudential Practice Guide APG 520 Fit And Proper (ADI’s)
General Insurance Prudential Practice Guides
Life Insurance Prudential Practice Guides

The new standards are aimed at enhancing the calibre of those charged with running APRA-regulated institutions. The standards establish a minimum benchmark for acceptable practice in the appointment of Board directors, senior management, and certain auditors and actuaries. Key elements of the new standards are:

* regulated institutions must have their own policies, and take all prudent steps, to ensure their responsible persons are fit and proper;
* the fitness and propriety of a responsible person must generally be assessed prior to initial appointment and reassessed annually; and
* additional criteria must be met for the appointment of certain auditors and actuaries.

The standards involve only minimal reporting requirements.

In developing its framework, APRA has harmonised its requirements with ASIC’s fit and proper regime for responsible officers, where possible. The prudential practice guides confirm that in assessing a responsible person, an institution can give weight to another regulator’s assessment, or information collected for that assessment, where it is current and relevant.

APRA itself has powers to remove a responsible person who it considers is not fit and proper. “APRA will not be vetting appointments and we see our powers as reserve powers – to be used when an institution is unable or unwilling to take action itself”, APRA Chair Dr Laker said.

In February under its existing powers APRA announced the disqualification of a former credit union director from acting as a director or senior manager of an authorised deposit-taking institution (ADI) or the Australian operations of a foreign ADI.

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Posted 3rd March 2006 by David Jacobson in Compliance, Corporate Governance, Financial Services