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The Garnaut Climate Change Review has released its Final Report.
The report provides recommendations on the policy options for Australia to most effectively respond to climate change.
The report recommends that the emissions trading system should be established at the earliest possible date, in 2010.
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ASIC has issued Class Order (CO 08/1) Group purchasing bodies to provide conditional exemptions for group purchasing bodies that arrange cover under insurance or facilities for managing financial risk (excluding certain foreign insurance) from the Australian financial services (AFS) licensing and managed investment scheme registration requirements.
Group purchasing bodies may be eligible for the relief if they are independent or are acting incidentally to their not-for-profit activities.
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Tasmania, Australian Capital Territory, New South Wales, South Australia and Victoria start daylight saving on 5 October 2008 and end on 5 April 2009.
Western Australia starts on 26 October 2008 and ends on 29 March 2009.
Queensland and the Northern Territory do not have daylight saving.
Confused? Use ABC’s Clock.
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From 1 October 2008 financial institutions and other approved providers will be able to offer first home saver accounts.
They encourage saving for a first home by taxing earnings on first home saver accounts at 15%.
Here is an ATO summary of the rules.
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Austrac Public Legal Interpretation 6 deals with suspect transactions and suspicious matter reports.
The PLI sets out AUSTRAC’s views on the provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Financial Transaction Reports Act 1988 (FTR Act) as they relate to:
• the obligation to report suspect transactions within the meaning of section 16 of the FTR Act
• the obligation to report suspicious matters within the meaning of section 41 of the AML/CTF Act
• the general prohibition on use of these reports as evidence.
The PLI discusses the ‘Reasonable grounds to suspect’ test with reference to decided cases.
It concludes that a cash dealer who suspects the relevant matters on reasonable grounds which are later found to be mistaken, has an obligation to report to AUSTRAC. Paragraph 16(5)(d) FTR Act provides immunity from any action, suit or proceeding for mistakenly reporting matters.
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The Commonwealth Government has introduced into Parliament the Trade Practices Amendment (Clarity in Pricing) Bill 2008.
The Bill relates to the use of component pricing in representations by businesses to consumers. Component pricing is the practice of advertising prices as the sum of multiple component parts, for example as $X plus $Y. Component pricing can create an impression that a product is being offered for sale at a lower price than it actually is.
If passed, this Bill will amend the Trade Practices Act to prohibit corporations from using a component price when making a representation as to the price of a good or service without also prominently specifying the single figure price a consumer must pay to obtain the product or service, to the extent that a single figure price is quantifiable at the time of making a representation.
This Bill does not prohibit component pricing, provided that a single figure price is also displayed.
The limitations on the use of component pricing imposed by the Bill would not apply to representations made exclusively by businesses to other businesses or governments.
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The Treasurer has announced that the Australian Office of Financial Management (AOFM) will purchase Australian residential mortgage‑backed securities (RMBS) as part of the Government’s commitment to improve liquidity in Australia’s mortgage markets and to re-invigorate the sector.
Liquidity in the primary Australian RMBS market has been reduced to around $2½ billion per quarter since mid-2007, compared with $18 billion over the previous year. This has weakened the capacity of mortgage lenders reliant on the primary RMBS market as a source of funding to compete.
The AOFM will invest in AAA rated RMBS in two initial tranches of $2 billion each.
To ensure diversity in the new issuance and provide access to the facility to a wide range of lenders, purchases may be subject to a per-issuer cap.
The AOFM will invest only in newly issued, prime, AAA rated RMBS that meet strict criteria in relation to the quality of the underlying mortgages.
The RMBS purchased by the AOFM will be held until redeemed or sold into secondary markets as and when market conditions normalise.
Joshua Gans comments here and here.
UPDATE 13 October 2008: Amount increased to $8 billion
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The Reserve Bank’s 2008 Financial Stability Review concludes that "Australia has benefited from having strong and profitable financial institutions with few problem assets on their balance sheets, and a sound regulatory regime. While the Australian financial system has not been completely insulated from developments abroad, it is weathering the current difficulties much better than many other financial systems."
Of particular interest is the Memorandum of Understanding (MOU) on Financial Distress Management dated 18 September 2008 between the members of the Council of Financial Regulators (Reserve Bank, Treasury, ASIC, APRA) at the back of the report (Also here).
The MOU sets out the objectives, principles and processes for dealing with stresses in the Australian financial system. It identifies the responsibilities of each Council member and is intended to facilitate a coordinated response to stresses in the financial system.
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ASIC has announced that persons who have placed portfolio securities into a securities lending program provided by an established securities lending business and who wish to sell those securities (a sale) before they have completed a recall of those securities from the program can sell their securities from the program in the usual way.
ASIC will not take any action for a breach of short selling requirements in relation to the sale of those securities where all of the following apply:
The sale is a bona fide sale transaction from the portfolio.
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This article by me first appeared in Complinet.
The Australian Securities and Investments Commission ( ASIC) has released Consultation Paper 102: Dispute Resolution – update of RG 139 & RG 165 proposing improvements to the way financial services businesses operating in Australia resolve disputes with consumers.
It also aims to refine and harmonise the approaches taken by different external dispute resolution (EDR) schemes.
Under s 912A of the Corporations Act, financial services businesses that do business with retail clients are required to have a dispute resolution system that consists of an internal dispute resolution process and membership of one or more external dispute resolution schemes approved by ASIC.
ASIC requires that access to an approved EDR scheme should be free of charge for consumers and investors. ASIC does not propose to reconsider this requirement as part of this review.
A key proposal of ASIC’s is to replace monetary limits on claims with a cap on compensation that can be awarded by an external dispute resolution scheme approved by ASIC and to increase the compensation amount to $280,000.
This would mean that some schemes would need to lift their current limits within an appropriate transitional period.
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