Financial Services and Credit Monthly Update April 2025
CONSUMER PROTECTION
ACCC launches new small business support page
The Australian Competition and Consumer Commission (ACCC) has unveiled a new web page dedicated to supporting small business and franchise owners. It consolidates essential information, tools, and guidance tailored to the needs of small businesses.
The new page features a small business toolkit, offering information on key topics such as unfair contract terms, which remain a priority for ACCC compliance and enforcement. Additional resources include guidance on reporting issues through the ACCC’s Infocentre, updates on the latest small business developments, and access to relevant industry codes of conduct.
The ACCC’s initiative aims to help small businesses better understand their rights and responsibilities when dealing with customers, competitors, and suppliers.
FINANCIAL MARKETS
ASIC urges review of AI governance and risk management
The Australian Securities and Investments Commission (ASIC) has called on market participants to ensure their governance practices and risk management systems keep pace with the accelerating adoption of artificial intelligence (AI). A recent review of 40 market intermediaries revealed that 70% currently use AI, with 71% planning to expand its use within the next 12 months. However, many lacked AI-specific documented governance arrangements, leading to potential gaps in AI risk assessment. The review highlighted key challenges, including data privacy and security, skills and knowledge gaps, and data quality issues. ASIC emphasised the importance of balancing innovation with responsible, safe, and ethical use of emerging technologies, urging market participants to refer to ASIC’s Report REP 798 for guidance on complying with existing licensee obligations when using AI.
FINANCIAL SERVICES
ASIC to launch new AFS licence portal
ASIC has announced the launch of a new digital portal for Australian financial services (AFS) licensees, set to go live on 5 May 2025. The portal aims to streamline the application, variation, and cancellation processes for AFS licences, offering a more efficient and user-friendly experience. The new system will pre-fill known information, present relevant questions for each applicant, and collect essential information upfront. While the portal introduces significant design and functionality changes, it does not alter the AFS licence eligibility criteria or the information required by ASIC to assess applications. Updated regulatory guides will be available when the portal is launched, to assist users in navigating the new system.
FINANCIAL SYSTEM
RBA and APRA clarify use of Overnight Standing Facility
On 2 April 2025, the Reserve Bank of Australia (RBA) and the Australian Prudential Regulation Authority (APRA) issued a joint statement on the use of the RBA’s Overnight Standing Facility. This facility is part of the RBA’s new ‘ample reserves with full allotment’ system, which allows eligible counterparties to borrow as many reserves as needed during open market operations (OMO).
The statement highlights that the Overnight Standing Facility will play a crucial role in maintaining the cash rate close to its target by supplying necessary reserves. Market participants experiencing liquidity shortages are encouraged to use this facility if they cannot secure liquidity through private markets or weekly OMOs.
The RBA and APRA have assured banks that using the Overnight Standing Facility is consistent with routine liquidity management practices. Both agencies will work closely with banks to ensure they understand and are comfortable using the facility as part of their liquidity management strategies.
Stakeholder feedback on Future Monetary Policy implementation
On 2 April 2025, the RBA published a summary of stakeholder feedback on its consultation paper, "The Future System for Monetary Policy Implementation." The consultation sought input on the design of the future system and focused on topics such as the configuration of full allotment repurchase agreements (repo) in the RBA’s OMO, the potential impacts on Australian financial markets, the demand for reserves, and the role of non-repo operations.
PAYMENTS
ACCC urges businesses to review card surcharges
The ACCC has called on businesses to reassess their card payment surcharges to ensure compliance with the law. Businesses must disclose any surcharges upfront and ensure they do not exceed the cost of acceptance. This initiative is part of the ACCC’s 2025-26 compliance and enforcement priorities. The ACCC has launched an education and compliance campaign to assist businesses, particularly small enterprises, in understanding their obligations, including updated guidance materials and close engagement with industry representatives. The ACCC will actively monitor compliance and may take enforcement action against businesses that fail to adhere to the regulations.
PRIVACY AND DATA
ASIC enhances public data accessibility
On 4 April 2025, ASIC Commissioner Kate O’Rourke delivered a keynote speech at the 11th Annual Australian Government Data Governance Summit, highlighting the pivotal role of ASIC’s publicly accessible datasets in supporting commerce, consumer financial activity, and corporate transparency. ASIC administers 32 registers, including the Australian Companies Register and Business Names Register, which collectively saw 343 million searches and over 689,000 new registrations in the last financial year.
Ms O’Rourke also announced several enhancements to these datasets, focusing on improving data quality and accessibility, which include:
linking director ID information with the Companies Register to improve data accuracy and help identify director conflicts and patterns of corporate stewardship;
collecting and publishing data on complaints and their resolutions from financial services firms to enhance transparency;
addressing issues such as fragmented or duplicated data, inaccurate ABN linkages, and fraudulent addresses;
the RegistryConnect program, which aims to deliver reliable, secure, and efficient registry services, including stabilising old technology and improving user interfaces; and
enhancing authentication and authorisation processes to prevent errors and reduce fraudulent interactions.
PRUDENTIAL
APRA updates Capital Adequacy Reporting Standards
On 23 April 2025, APRA released its response to submissions on proposed updates to Reporting Standard ARS 110.0 – Capital Adequacy. These changes are part of APRA’s ongoing efforts to strengthen the banking sector’s resilience to future stress. The updated standard, effective from 1 July 2025, will include amendments to improve the accuracy and consistency of capital adequacy reporting by authorised deposit-taking institutions. Key changes involve enhanced requirements for the measurement of capital and adjustments to the treatment of certain exposures.
AML/CTF
AUSTRAC targets inactive digital currency exchanges
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has urged inactive digital currency exchange (DCE) businesses to voluntarily withdraw their registrations or face having them cancelled. Currently, 427 DCEs are registered, but AUSTRAC suspects many are inactive. The regulator is contacting these businesses to confirm their operational status. AUSTRAC has emphasised the risks associated with inactive DCEs, noting their vulnerability to criminal exploitation for money laundering and scams. Following this campaign, AUSTRAC will establish a publicly searchable DCE register, allowing consumers to verify the legitimacy of cryptocurrency providers.
DISPUTES AND ENFORCEMENT
AFCA clarifies how direct loss is calculated
On 3 April 2025, the Australian Financial Complaints Authority (AFCA) published detailed guidance on how it calculates losses in upheld financial advice complaints. AFCA primarily employs two counterfactual approaches: the "no-transaction" method, which assumes the client would have taken no action if given appropriate advice, and the "estimate" method, which uses a market benchmark to assess potential returns based on the client's risk profile. These approaches aim to reflect both potential gains and market risks, ensuring compensation is consistent with relevant case law. In rare cases where AFCA cannot determine what the client would have been invested in, AFCA may adopt the capital loss approach, which calculates loss based purely on the decline in value of a specific investment.
ASIC consults on publishing breach and complaints data
On 10 April 2025, ASIC launched a consultation on its proposal to publish firm-level data on reportable situations and internal dispute resolution outcomes. As detailed in Consultation Paper 383 Reportable situations and internal dispute resolution data publication, the initiative aims to enhance transparency and accountability within the financial sector. ASIC plans to release two dashboards in the second half of 2025, showcasing data on compliance breaches and complaints received by financial firms. The consultation seeks feedback on the proposed publication framework, which is intended to drive improved performance and consumer confidence. Submissions can be made until 14 May 2025.
APRA accepts Court Enforceable Undertaking from ANZ
On 3 April 2025, APRA accepted a Court Enforceable Undertaking (CEU) from Australia and New Zealand Banking Group Limited (ANZ) to address ongoing weaknesses in the bank’s non-financial risk management practices and risk culture. Concurrently, APRA increased the capital add-on applied to ANZ from $750 million to $1 billion. This follows a previous increase from $500 million in 2019.
APRA's concerns include weaknesses in ANZ’s operational risk and compliance management, as well as a reactive risk culture. Despite some improvements noted in an independent review, APRA determined that ANZ's existing remediation efforts in implementing a group-wide non-financial risk management framework, system and operating model were insufficient to address the broader weakness across the bank. Under the CEU, ANZ will appoint an independent reviewer to conduct a comprehensive review and develop a remediation plan. The $1 billion capital add-on will remain until APRA is satisfied with ANZ’s remediation progress.
ASIC shuts down 95 companies linked to scams
On 7 April 2025, ASIC announced that it had successfully obtained court orders to wind up 95 companies suspected of facilitating online investment and romance baiting scams. The Federal Court granted ASIC's application on just and equitable grounds, citing the incorporation of these companies with false information and a lack of confidence in their conduct and management. Many of these entities were linked to websites and mobile apps used to deceive consumers into investing in fraudulent foreign exchange, digital assets, or commodities trading schemes. ASIC has also taken steps to remove numerous related websites and apps.
Hollard Insurance sued for claim handling failures
On 11 April 2025, ASIC commenced Federal Court proceedings against Hollard Insurance Partners Limited (Hollard Insurance), alleging serious breaches in its handling of a home building and contents insurance claim. At the centre of ASIC’s action is a claim by Hollard Insurance customers lodged on 31 October 2021 following storm damage, which was subject to extensive delays and poor communication, ultimately leading to the rejection of the claim in April 2023. ASIC contends that Hollard's actions, including ignoring expert advice and failing to provide timely temporary accommodation, breached its duty of utmost good faith under the Insurance Contracts Act 1984 (Cth). The prolonged delays resulted in the insured home becoming uninhabitable due to moisture, mould, and decay. ASIC is seeking declarations and a civil penalty against Hollard Insurance.
ASIC suspends Beacon Wealth's AFS licence
On 14 April 2025, ASIC suspended the AFS licence of Beacon Wealth Pty Ltd (Beacon Wealth) until 7 April 2026. The suspension follows a change in ownership and control in June 2024, during which the directors were replaced, and 100% of the shares were sold to a new owner. Since the change, Beacon Wealth has ceased carrying on a financial services business. ASIC also noted that the responsible managers and key persons associated with the licence no longer have any involvement with the licensee. Beacon Wealth has expressed an intention to resume its financial services business under its AFS licence but will need to obtain ASIC's approval to do so.
Green County and Max Funding found engaged in unlicensed lending
On 16 April 2025, the Federal Court ruled that Green County Pty Ltd (Green County), a business lender, and Max Funding Pty Ltd, a business loan introducer, engaged in unlicensed credit activities in relation to loans provided to two consumers. The Court also determined that Green County contravened consumer protection provisions under the National Credit Code. The Court found that the companies provided loans to two consumers without holding the necessary Australian credit licence. In providing credit to one of the consumers, the companies improperly relied on a business purpose declaration without making reasonable inquiries into the actual purpose of the loans, which were not for business purpose.
ASIC fines debt management firm for misleading claims
ASIC has issued two infringement notices totalling $37,560 to Chapter Two Holdings Pty Ltd (Chapter Two) for allegedly making misleading statements on its website. Between August 2023 and March 2024, Chapter Two claimed to have wiped $80 million in debt and saved consumers $30 million in interest, which ASIC found unsubstantiated. The statements were removed on 14 March 2024. Chapter Two paid the first instalment of the fine on 12 April 2025. ASIC may pursue civil penalty proceedings if the remaining instalments are not paid. This action is part of ASIC’s 2025 enforcement priority to ensure accurate representation by debt management firms. The case was referred to ASIC by the Australian Financial Security Authority.
Financial services provider penalised $11 million for inappropriate advice
DOD Bookkeeping Pty Ltd (in liquidation), formerly known as Equiti Financial Services Pty Ltd (Equiti FS), has been fined $11,030,000 by the Federal Court for breaching conflicted remuneration rules and providing inappropriate "cookie-cutter" advice. Equiti FS paid $130,250 in bonuses to three advisers who recommended clients roll over their super into self-managed super funds to purchase property through a related entity, Equiti Property Pty Ltd (Equiti Property). The Court found that the advice given to 12 clients failed to consider their individual circumstances, focusing instead on property purchases. The advice was also found to be influenced by the fact that the bonuses were paid to the advisors when the clients settled on property through Equiti Property, in breach of the conflicted remuneration rules.
Federal Court clears Block Earner of unlicensed conduct
On 22 April 2025, the Full Federal Court found that Web3 Ventures Pty Ltd trading as Block Earner, a digital asset service provider, did not require an AFS licence to offer its fixed-yield digital asset-related Earner product.
On 9 February 2024, the Court at first instance had found that Block Earner engaged in unlicensed financial services conduct by offering the Earner product. On 4 June 2024, in a penalty decision, the Court relieved Block Earner from being liable for a penalty on the ground that Block Earner acted in good faith in its Earner product offering and had obtained legal advice on the matter. On 18 June 2024, ASIC appealed the Court’s decision to relieve Block Earner from liability, and on 9 July 2024, Block Earner filed a cross-appeal against the Court’s initial decision that Block Earner needed an AFS licence. In the appeal decision on 22 April 2025, the Full Federal Court sided with Block Earner, dismissed ASIC’s appeal, and ordered ASIC to pay the costs of the proceedings, including appeals.