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In the new get tough environment, regulators have suffered some setbacks in the last 3 months – ASIC in its responsible lending case against Westpac, and APRA in its action against IOOF – but they are also getting to use some of their new powers. ASIC has been quick out of the block with its product intervention power, which allows it to control products without having to go to court, even when there is no breach of the law. An order has already been issued for a payday lending product (although it is being challenged). Two more orders are in the works.
The pipeline of new regulation from the Royal Commission is open and flowing fast. This includes initiatives such as the draft legislation for a best interests duty for mortgage brokers, removing the financial services exemption for funeral policies, removing the “grandfathered” exemption for conflicted remuneration for financial advice, and applying unfair contract terms laws to insurance contracts. The Federal Government has published a roadmap to keep track of it all.
Reviews and inquiries now seem a permanent feature of the regulatory landscape. We have an ASIC inquiry starting into school banking programs and a new Senate Select Committee planning to conduct a 12 month investigation of FinTech and RegTech.
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Patrick Dwyer and Kathleen Harris
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