Author: Brooke Benson

Culture, Conduct and Responsible Managers

facebook Twitter LinkedIn RSS As a Responsible Manager, what does it mean to maintain your competency as required by s912A(1)(e) of the Corporations Act 2001 (Cth) (the Corporations Act? ASIC takes a far less rigorous approach than other regulatory bodies allowing licensees to self-regulate how they maintain the ongoing competence of their RMs rather than prescribing specific requirements such as mandatory training. However, in Regulatory Guide 105 ASIC provides that: AFS Licensees should have measures in place to ensure they maintain their organisational competence at all times, including: reviewing their organisational competence on a regular basis and whenever their RMs or business activities change; maintaining and updating the knowledge and skills of their RMs; and keeping records to show the Licensee has reviewed its organisational competence and what steps have been taken to maintain its organisational competence; and AFS Licensees should document their measures in some form, as in ASIC’s view, it is more difficult to show compliance where documentation is not in place. Spotlight on Culture and Conduct With 2016 being ASIC’s year of “Culture and Conduct” it is fair to assume that this obligation will attract increasing attention along with the rest of the general obligations set out in s912 of the Act. Historically, ASIC has made a number of observations regarding the link between compliance culture and leadership stemming from both directors and RM’s. It’s a message that ASIC...

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Culture, Conduct and Responsible Managers

facebook Twitter LinkedIn RSS As a Responsible Manager, what does it mean to maintain your competency as required by s912A(1)(e) of the Corporations Act 2001 (Cth) (the Corporations Act? ASIC takes a far less rigorous approach than other regulatory bodies allowing licensees to self-regulate how they maintain the ongoing competence of their RMs rather than prescribing specific requirements such as mandatory training. However, in Regulatory Guide 105 ASIC provides that: AFS Licensees should have measures in place to ensure they maintain their organisational competence at all times, including: reviewing their organisational competence on a regular basis and whenever their RMs or business activities change; maintaining and updating the knowledge and skills of their RMs; and keeping records to show the Licensee has reviewed its organisational competence and what steps have been taken to maintain its organisational competence; and AFS Licensees should document their measures in some form, as in ASIC’s view, it is more difficult to show compliance where documentation is not in place. Spotlight on Culture and Conduct With 2016 being ASIC’s year of “Culture and Conduct” it is fair to assume that this obligation will attract increasing attention along with the rest of the general obligations set out in s912 of the Act. Historically, ASIC has made a number of observations regarding the link between compliance culture and leadership stemming from both directors and RM’s. It’s a message that ASIC...

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Second Anniversary of ASX CGPRs: Report Sets a Baseline for Compliance

Second anniversary of ASX Corporate Governance Principles and Recommendations: Report sets a baseline for compliance facebook Twitter LinkedIn RSS In this edition: Second anniversary of ASX CGPRs: Report sets a baseline for compliance Loss of licence: ASIC gets serious   Second anniversary of ASX Corporate Governance Principles and Recommendations: Report sets a baseline for compliance Almost two years after the ASX Corporate Governance Principles and Recommendations (CGPRs) came into effect, the ASX has release its commissioned report prepared by KPMG, (the Report) examining the disclosure of ASX-listed entities against the CGPRs in their first full year of reporting. The Report does not address all the CGPRs, only those recommendations which were new or revised in the 3rd edition. See our earlier blog for more information on the new and revised CGPRs. Unsurprisingly, KMPG found a positive correlation between the size of the ASX-listed entity (S&P/ASX 200), the adoption of the CGPRs and the adequacy of disclosure of information by the entity. It also observed, that there appears to be ‘significant confusion’ about the role of Appendix 4G, with many entities assuming that it was sufficient to note they had adopted a recommendation in their Appendix 4G. KPMG has now recommended the ASX make it clearer to entities that the Appendix 4G should not be used as a substitute for disclosures ‘normally made’in the Corporate Governance Statement (CGS). Some other key insights included: Board skills...

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Financial Services Update: Government Review of AML/CTF Regime recommends simplification and regulation

Government Review of AML/CTF Regime recommends simplification and regulation of lawyers and accountants facebook Twitter LinkedIn RSS In this edition: Government Review of AML/CTF Regime recommends simplification and regualtion of lawyers and accountants; Changes to ASX Appendices to improve consistency; and Suspension for Melbourne company that failed to lodge financial statements.   Government Review of AML/CTF Regime recommends simplification and regulation of lawyers and accountants On Friday 29th April 2016, the Minister for Justice released the long awaited Report on the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006(Report) and associated rules and regulations. You may recall that the government commenced this review in 2013 and undertook consultation with industry in 2014-15. Overall, the Report acknowledges the widespread concerns about the current Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulatory regime being overly complex and cumbersome, particularly for small to medium businesses, making compliance challenging and expensive. The Report has made 84 recommendations for government to consider.  Key topics include the simplification of the AML/CTF Regulatory framework, AML/CTF Programs and CDD requirements. The old chestnut – widening the scope to introduce tranche 2 has been raised again, albeit with loose reference for the need for further consultation before any change can occur! No doubt this is good news for those industries caught by tranche 2. AUSTRAC has welcomed the government’s report and recommendations highlighting the opportunity to: simplify the AML/CTF...

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The Spotlight is on Compliance Culture: What does it mean and the cost if you get it wrong

ASIC’s Culture Club facebook Twitter LinkedIn RSS In this edition: ACE Insurance Ltd’s Enforceable Undertaking; ANZ’s One Path failures; Conflicts Management in Funds Management- ASIC Report; and ASIC’s focus on culture. ASIC’s Culture Club For the past year, ASIC has been talking about compliance culture, or the lack of, in our finance services industry. Recently, we have started to see the results of its surveillance in this area including investigations of the CBA, Macquarie Bank, ANZ, Ace Insurance (now Chubb) to name a few. Ahead of ASIC’s annual forum titled “culture shock” which begins today, ASIC’s Chairman Greg Medcraft has said in a recent interview that ASIC is now stepping up its focus on culture by including it in its risk-based surveillance reviews. Mr Medcraft said “what we are now doing is bringing the elements of culture together and considering whether they indicate a cultural problem. Where we think there may be a problem, we will ask questions and do a ‘deeper dive’.” This blog will explore some of the recent regulatory activity involving culture and ask: what is the cost of poor culture? Poor Compliance Culture central theme of recent EU ASIC recently accepted an Enforceable Undertaking (EU) from ACE Insurance Limited (ACE), following an investigation which found evidence that ACE had ‘inadequate or insufficiently documented compliance and risk management policies and systems in place’. The breaches in...

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Financial Services Update: Advertising Continues to be in ASIC’s Surveillance Spotlight

Advertising continues to be in ASIC’s surveillance spotlight – AFS Licensees beware! facebook Twitter LinkedIn RSS In this edition: Advertising continues to be in ASIC’s surveillance spotlight; ASIC releases consultation paper on retail client review and remediation programs and update to record-keeping requirements; and  ASIC enforcement reminder: the importance of not deleting emails.   Advertising continues to be in ASIC’s surveillance spotlight – AFS Licensees beware! Keen readers of ASIC publications will have noticed that ASIC is continuing its surveillance focus on potentially misleading or deceptive advertising and promotional material.  This focus includes wholesale as well as retail Australian financial services (AFS) licensees. Two weeks ago, ASIC issued a Media Release about action taken against ACE Insurance Limited and Tiger Airways Australia Pty Limited to force the removal of misleading promotional statements on their websites concerning ACE Insurance travel insurance policies. This Media Release also highlights 17 other similar cases over the last few years where ASIC has taken action against companies for misleading advertising. But this is not the full extent of ASIC’s recent surveillance of advertising and promotional materials. During the 2015 financial year, ASIC took action with 54 cases of potentially misleading or deceptive promotional material. As distinct from some of ASIC’s more time-intensive surveillance activities, you can imagine that picking up potentially misleading or deceptive advertising and promotional material is a relatively low-cost, high impact...

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