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September 8, 2009

Senate reports on Financial Services Modernisation BIll

As part of its report on the National Consumer Credit Reform Package (also see here), the Senate Economics Committee has reported on the Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 which regulates margin lending, promissory notes and trustee corporations.


It recommends that the Bill be passed.


See draft Regulations here

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Posted 8th September 2009 by David Jacobson in Financial Services

September 7, 2009

Financial market licence requirements for professional markets

ASIC has released a consultation paper and proposed regulatory guidance on criteria for exemption from Australian financial market licence provisions for professional markets.


ASIC will recommend exemptions for markets where all of the following defining characteristics are present:

  • users are professional investors;
  • products are not usually traded on public markets (e.g. excluding shares);
  • trading is not anonymous; and
  • the operator does not also operate a clearing and settlement facility for the market.

The consultation period on the proposed regulatory guidance closes on 19 October 2009.

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Posted 7th September 2009 by David Jacobson in Corporations Act

Further APRA consultation on remuneration for ADI’s and insurers

The Australian Prudential Regulation Authority (APRA) has released a second consultation package on remuneration for authorised deposit‑taking institutions (ADIs) and general and life insurance companies.

The second package comprises a response paper to the submissions to the previous paper, together with revised draft versions of the relevant governance standards and an associated draft prudential practice guide (PPG).

APRA is seeking submissions on the revised draft standards and PPG by 2 October 2009. It is expected that the final prudential standards and associated PPG will be released in November 2009 and be effective from 1 April 2010.

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Posted 7th September 2009 by David Jacobson in Financial Services

September 6, 2009

Stage 3 award modernisation

The Award Modernisation Full Bench of the Australian Industrial Relations Commission has issued a decision and the Stage 3 modern awards

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Posted 6th September 2009 by David Jacobson in Workplace

Company losses

The Assistant Treasurer, Senator the Hon Nick Sherry, has released exposure draft legislation to improve the income tax company losses regime and associated explanatory material.

The exposure draft legislation implements announced changes to the company loss recoupment rules to improve the operation of the continuity of ownership test where a company has an unfixed share structure, modify the definition of voting power and clarify the operation of the same business test for consolidated groups (Treasurer's Media Release No 53 of 13 May 2008 ).

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Posted 6th September 2009 by David Jacobson in Tax

Draft AML/CTF Rules relating to friendly society closed funds and grain warehousing

Austrac has released 2 new draft Rules for public consultation until 18 September 2009:

  • Friendly society closed funds: These draft AML/CTF Rules exempt from the AML/CTF Act, reporting entities who provide item 37 (issuing a life policy), item 38 (accepting a premium in relation to a policy) and item 39 (making a payment to a person under a policy) designated services, where they relate to approved benefit funds which are closed to new members and to which new policies cannot be written.
  • Commodity warehousing of grain: These draft AML/CTF Rules exempt from the AML/CTF Act, reporting entities who provide item 6 (making a loan) and item 7 (allowing a transaction on a loan) designated services, where they relate to the storing of grain for the purposes of a grain pool.

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Posted 6th September 2009 by David Jacobson in Anti-money laundering

TOFA changes

The Assistant Treasurer, Senator Nick Sherry,has announced several amendments to the income tax law relating to the Taxation of Financial Arrangements, (TOFA).


The changes include:

  • the interaction of TOFA and the pay as you go (PAYG) instalments system.
  • clarify that a dividend paid on a share that is a debt interest may be deductible
  • Modify the assets threshold test that applies to regulated superannuation funds so that it also applies to unregulated superannuation funds on the same basis

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Posted 6th September 2009 by David Jacobson in Financial Services, Tax

September 3, 2009

Termination Payments Regulations

The Minister for Financial Services, Superannuation and Corporate law, Chris Bowen MP, has released the final Regulations and explanatory material in relation to the proposed reforms to termination payments in the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009.


The Regulations:

  • provide a definition for ‘base salary’;
  • clarify and expand the types of benefits that are (and are not) subject to shareholder approval; and
  • prescribe circumstances in which a benefit is given in connection with a person’s retirement.

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Posted 3rd September 2009 by David Jacobson in Corporations Act

September 2, 2009

Austrac Public Legal Interpretation No. 11 – Electronic funds transfer instructions

AUSTRAC has released Public Legal Interpretation (PLI) 11 which covers electronic funds transfer instructions (EFTIs) and international funds transfer instructions (IFTIs), as detailed in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).


The AML/CTF Act requires:

  • persons involved in an electronic funds transfer instruction to record, obtain, include and/or pass on specific information about an EFTI and, in certain circumstances, report this information to AUSTRAC
  • a person who sends or receives an IFTI, transmitted into or out of Australia, to report specific information about the transaction to AUSTRAC.

The PLI sets out AUSTRAC’s views on the relevant EFTI and IFTI provisions of the AML/CTF Act, their application to particular scenarios (such as when funds transfer instructions are given using a debit or credit card), and when reporting to AUSTRAC is required.


This PLI does not cover instructions made under a designated remittance arrangement.

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Posted 2nd September 2009 by David Jacobson in Anti-money laundering

September 1, 2009

Privacy Case Notes 7 – 11 for 2009

The Privacy Commissioner has issued 5 new case notes:


In Own Motion Investigation v Airline [2009] PrivCmrA 7 the Privacy Commissioner investigated a report that an airline had failed to protect its passengers’ privacy. An individual had accessed the airline’s online flight check-in system using their personal booking number and flight number. When they entered this information the personal information of two other airline passengers was allegedly shown on the screen.


On investigation the Commissioner found that as the airline already had security processes in place and that the code problem which led to the disclosure was remedied soon after the airline was notified of the error, the steps taken to respond to the error were adequate.


In F v Medical Specialist [2009] PrivCmrA 8,the complainant had approached a medical clinic specifically seeking treatment from a consultant. The consultant refused to treat the complainant citing ethical and therapeutic reasons. The consultant then advised the clinic manager of the complainant’s need for treatment, the consultant’s personal refusal to treat the complainant and the reasons for this refusal.


The Commissioner formed the view that in the circumstances described, the disclosure of the complainant’s personal information to the clinic manager was both directly related to the purpose for which the information was collected, and was within the complainant’s reasonable expectations. The complaint was closed.


In G v Counselling Service [2009] PrivCmrA 9, the complainant complained that a counselling service had disclosed the content of their counselling sessions to their employer, that it did not inform the complainant that it would make such a disclosure, and that it had failed to keep the notes of the counselling sessions safe and secure.


The Commissioner formed the view that the complainant’s information had not been disclosed. The Commissioner also considered the service’s practices and formed the view that, although it had misplaced one page of the complainant’s notes, it had reasonable steps in place to protect client information.


In H v Telecommunications Company [2009] PrivCmrA 10 the complainant complained about a credit report default listing in relation to an overdue mobile phone account which had been paid. The complaint was closed after investigation showed the default listing was properly made.


In I v Insurance Company [2009] PrivCmrA 11, the complainant alleged that their insurance company had inappropriately disclosed a copy of a letter regarding their claim to the repairer. The Commissioner found that the primary purpose of collection of the information was to process the complainant’s insurance claim. The Commissioner accepted that the insurance company disclosed the information to the repairer for a related secondary purpose which was to investigate the complaint about the service that had been provided.


However, the Commissioner did not accept that the complainant would have expected that a full copy of their letter, including the statements made about the repairer, would be disclosed directly to the repairer.


The Commissioner did not consider that the disclosure of the complainant’s letter was permitted by NPP 2.1(a) and formed the view that the insurance company had interfered with the complainant’s privacy.


The insurance company apologised to the complainant and agreed to amend its staff training program to incorporate the handling of personal information collected in relation to customer complaints.

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Posted 1st September 2009 by David Jacobson in Privacy
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