Hayne royal commission reforms given 6-month delay

According to its Implementation Roadmap released in August last year, these measures include:

Measures to improve consumer protections

• 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”

Measures to strengthen financial regulators

• 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

Similarly, measures originally scheduled for introduction by December 2020 will now be introduced by 30 June 2021.

Those measures, according to the Implementation Roadmap, include:

Access to redress and new disciplinary body

• Recommendation 2.10 – A new disciplinary system for financial advisers
• Recommendation 7.1 – Compensation scheme of last resort

Measures to strengthen financial regulators − executive accountability regime

• 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

“This announcement today balances the need to implement the recommendations of the royal commission with the need to ensure our financial institutions are in a position to devote their resources to responding to the significant challenges posed by the coronavirus,” Treasurer Josh Frydenberg said.

ASFA referred to the government deferral as “sensible”, saying it will ensure funds can continue to focus on supporting the immediate needs of their members.

“Superannuation funds have dedicated their focus towards effectively delivering the vital services their members need at this difficult time,” ASFA said.

“Maintaining the stability of the superannuation system over the course of the pandemic has been paramount, especially while administering over $9 billion in early release of super payments to more than 1 million Australians.”