In brief
Written by Senior Regulatory Counsel Michael Mathieson
Are you interested in the financial system and how it is regulated? And do you like tables (the kind with rows and columns, this is not about your furniture preferences)? If you answered 'yes' to both questions, you should read on.
I don't know about you, but I do like a good table. Not an excel spreadsheet, mind. But a good table certainly helps my simple brain to assimilate complex information. I have a colleague who disdains tables but, to resort to cliché, we have agreed to disagree.
While the final report of the Financial System Inquiry was surprisingly brief, and while the Government's response resembled, at times, a secondary school social sciences handout, it can still be hard to work out where, exactly, things are heading.
So here is a table which sets out what is likely to happen and when.
When |
Area |
Action |
|---|---|---|
| To date | Resilience | APRA has released an international capital comparison study. |
| " " | Resilience | APRA has announced an increase in mortgage risk weights for the larger banks. |
| " " | Innovation | Legislation has been passed to extend the period before unclaimed monies in the banking and insurance sectors are captured from three to seven years. |
| By end-2015 | Resilience | Develop legislation to facilitate participation of Australian entities in international derivative markets and better protect client monies. |
| " " | Superannuation | Develop legislation to improve governance and transparency in superannuation. |
| " " | Superannuation | Progress the Retirement Income Streams Review. |
| " " | Superannuation | Task the Productivity Commission to immediately develop and release criteria to assess the efficiency and competitiveness of the superannuation system and to develop alternative models for a formal competitive process for allocating default fund members to products. |
| " " | Innovation | Consult on legislation to support crowd-sourced equity funding. |
| " " | Innovation | Consult on crowd-sourced debt financing. |
| " " | Innovation | Task the Productivity Commission to review access to and the use of data. |
| " " | Consumer Outcomes | Develop measures to address the misalignment of incentives in life insurance. |
| " " | Regulatory System | Complete a capability review of ASIC. |
| " " | Regulatory System | Complete consultation on industry funding arrangements for regulatory activities undertaken by ASIC. |
| " " | Regulatory System | Appoint new members and revise the Terms of Reference of the Financial Sector Advisory Council. |
| By mid-2016 | Resilience | Consult on measures to ensure financial regulators have the tools they need to manage any future financial crisis. |
| " " | Innovation | Develop legislation to ban excessive card surcharges and better protect consumers using electronic payment systems. |
| " " | Innovation | Develop legislation to reduce disclosure requirements for issuers of 'simple' corporate bonds. |
| " " | Innovation | Establish the Innovation Collaboration Committee. |
| " " | Consumer Outcomes | Develop legislation which provides a professional standards framework for financial advisers. |
| " " | Consumer Outcomes | Consult on development of 'accountabilities' for issuers and distributors of financial products and ASIC product intervention powers. |
| " " | Regulatory System | Update the Statement of Expectations for APRA, ASIC and the Payments System Board. |
| " " | Regulatory System | Consider ASIC capability review and, as appropriate, develop legislation to enhance operational capabilities of regulators. |
| By end-2016 | Resilience | APRA to take additional steps to ensure the banks have unquestionably strong capital ratios. |
| " " | Superannuation | Develop and introduce legislation to enshrine the objective of the superannuation system. |
| " " | Superannuation | Consult on legislation to facilitate trustees of superannuation funds providing pre-selected comprehensive income products for retirement. |
| " " | Innovation | Give legal effect to the Asian Region Funds Passport initiative. |
| " " | Innovation | Consider technology neutrality in financial sector regulation. |
| " " | Consumer Outcomes | Develop legislation to give ASIC the power to ban individuals from managing financial firms. |
| " " | Consumer Outcomes | Consult on strengthening ASIC's enforcement tools in relation to the financial services and credit licensing regimes. |
| " " | Consumer Outcomes | ASIC to review remuneration arrangements in the mortgage broking industry. |
| " " | Regulatory System | Introduce competition into ASIC's mandate. |
| Beyond 2016 | Resilience | APRA to ensure our banks have appropriate total loss-absorbing capacity and leverage ratios in place. |
| " " | Superannuation | Implement legislation to introduce director penalties. |
| " " | Superannuation | Consult on legislation to improve member engagement, consistent with the recommendations in the Inquiry. |
| " " | Superannuation | Monitor leverage and risk within the superannuation system. |
| " " | Innovation | Facilitate rationalisation of life insurance and managed investment scheme legacy products. |
| " " | Consumer Outcomes | Consult on and develop legislation to enable innovative disclosure for financial products and to improve the regulation of managed investment schemes. |
| " " | Consumer Outcomes | ASIC to review stockbroking remuneration arrangements. |
| " " | Regulatory System | Commence a review of ASIC's enforcement regime. |
| " " | Regulatory System | Task the Productivity Commission to review the state of competition in the financial system. |