On the pulse
Securing regional banking services – see media release.
Scams Prevention Framework Bill commences – see Bill.
Financial Advice Update – February 2025 – see media release.
The complex challenge of advice – speech by ASIC Commissioner Alan Kirkland – see media release.
ASIC updates guidance for applicants applying for ASIC relief or no-action letters – see media release.
ACCC authorises suspension and termination provisions relating to Bulk Electronic Clearing System – see media release.
Parliamentary committee report on wholesale investor and wholesale client tests tabled – see report.
ASIC proposes further relief for licensees under the reportable situations regime – see media release.
APRA proposes updated approach to treatment of HELP debts – see media release.
APRA statement on BUSSQ Federal Court appeal – see media release.
APRA rescinds information paper on cloud outsourcing and ceases ad hoc credit reporting collection – see media release.
AUSTRAC campaign targets remitters and digital currency exchanges – see media release.
Former Star executives penalised for breaching duties – see media release
G+T Insight – The Scams Prevention Framework legislation passes Parliament: time to get your house in order – Antonia Garling, Jeremy Jose and Silvana Wood (14 February 2025).
G+T Insight – Updating super fund service provider agreements for CPS 230 – Luke Barrett (10 February 2025).
G+T Insight – Boardroom Brief Week Commencing 17 February 2025 – Justin Mannolini, Cassandra Lee and Adam Sibum (20 February 2025).
ASIC
Financial advice update – February 2025
The Financial advice update is a round-up of regulatory developments and issues affecting financial advice.
It covers all areas of financial advice regulation and includes a broad range of content relevant to Australian financial services (AFS) licensees who are advice licensees and financial advisers.
The topics of this update include (among other things) professional standards and assessment of qualifications, ASIC’s first internal dispute resolution data report and findings and an update on the reportable situations regime.
For more information, see ASIC media release.
The complex challenge of advice – speech by ASIC Commissioner Alan Kirkland
On 10 February 2025, ASIC Commissioner Alan Kirkland delivered a speech at the Conexus Financial Professional Planner 2025 Advice Policy Summit. Key points include:
Financial advisers are entrusted by their clients to help them make confident and informed decisions. In many cases, those decisions will be among the most consequential of their lives.
ASIC has observed some positive signs of improvement – but there continues to be too many examples where advice leads to poor, if not devastating, outcomes for consumers.
In light of some of these poor practices, ‘misconduct exploiting superannuation savings’ and ‘unscrupulous property investment schemes’ have been selected as 2025 enforcement priorities.
See the full speech.
ASIC updates guidance for applicants applying for ASIC relief or no-action letters
ASIC has released updated Regulatory Guide 51 Applications for relief (RG 51) and Regulatory Guide 108 No-action letters (RG 108).
These updates improve and simplify ASIC guidance regarding relief and no-action letters by centralising related guidance and amending outdated references.
ASIC has taken on board feedback from stakeholders during the consultation process in 2024: Consultation 11 Proposed updates to RG 51 and RG 108 (CS 11). In response to this feedback, ASIC has:
Updated RG 108 to include a reference to relevant content in RG 51 to consider when making a request for a no-action letter.
Updated RG 51 to include a reference that an applicant may have a right to seek review of ASIC’s decision to the Administrative Review Tribunal.
Updated RG 51 to remove the proposed reference in Table 2 that a cost and benefit analysis is needed to accompany an application.
Adopted technical or stylistic recommendations from the consultation process to enhance readability.
On release of the updates, ASIC will withdraw the guidance in RG 21 How ASIC charges fees for relief applications, RG 208 How ASIC charges fees for credit relief applications and RG 57 Notification of rights of review. Relevant guidance has now been incorporated into RG 51.
See ASIC media release.
ASIC proposes further relief for licensees under the reportable situations regime
ASIC announced a proposal to provide additional relief under the reportable situations regime (see ASIC CS 16 Reportable situations - additional relief). The proposed relief aims to reduce the reporting burden on licensees, while upholding the objectives of the reportable situations regime. The relief would apply to certain breaches of the misleading and deceptive conduct (MDC) provisions and certain contraventions of civil penalty provisions (CPPs), subject to specific conditions.
ASIC proposes to provide relief from reporting breaches of the MDC provisions and CPPs when:
The breach has been rectified within 30 days from when it first occurred (this includes paying any necessary remediation).
The number of impacted consumers does not exceed five.
The total financial loss or damage to all impacted consumers resulting from the breach does not exceed $500 (including where the loss has been remediated).
The breach is not a contravention of the client money reporting rules and clearing and settlement rules.
ASIC proposes to consolidate this additional relief and the relief in ASIC Corporations and Credit (Breach Reporting–Reportable Situations) Instrument 2024/620 into a new instrument.
More broadly, licensees are required to have systems and processes in place to identify, escalate, investigate, rectify and capture incidents and breaches as part of their general obligations to maintain adequate risk management systems and to ensure compliance with their licensee obligations. The proposed relief does not affect these obligations.
Submissions are due by 11 March 2025.
Former Star executives penalised for breaching duties
In 2022, ASIC commenced civil penalty proceedings in the Federal Court against 11 current and former directors and officers of The Star Entertainment Group Ltd (Star) for alleged breaches of their duties under section 180 of the Corporations Act. This case is ongoing in the Federal Court.
Following a hearing on 24 February 2025, the Court penalised two former executives of Star after they admitted to breaches of their duties in proceedings brought by ASIC. The former Chief Casino Officer, Gregory Hawkins, was ordered to pay a penalty of $180,000 and disqualified from managing corporations for 18 months. The Court found that Mr Hawkins, whose role included overseeing the operations of Star’s Sydney casino, breached his duties under section 180(1) of the Corporations Act in 2018 and 2019. Among other things, he approved an agreement between Star and the gambling operator Suncity in 2018, which gave Suncity exclusive access to a private gaming room in the Sydney casino known as ‘Salon 95’. Mr Hawkins knew that the conduct of Suncity’s representatives exposed Star to the risk that it would breach the law or become unsuitable to hold a casino licence. He also failed to report the information he knew about Suncity to the Board.
The former Chief Financial Officer, Harry Theodore, was ordered to pay a $60,000 penalty and was disqualified from managing corporations for nine months. Mr Theodore was found to have breached section 180(1) of the Corporations Act by failing to prevent Star from sending correspondence to National Australia Bank on 7 November 2019 which contained inaccurate, incomplete and misleading representations about the use of China Union Pay cards for gambling purposes at NAB terminals located within Star’s casino.
See ASIC media release.
APRA
APRA key actions and proceedings
APRA accepts court enforceable undertaking from Cbus and launches investigation – APRA has taken further action to address material prudential concerns identified with United Super Pty Ltd (United Super) and to support improved outcomes for its members. United Super is the trustee for Construction and Building Unions Superannuation Fund (Cbus), which has over 920,000 member accounts and around $100 billion in funds under management.
APRA has taken steps to ensure its concerns from a recent prudential review and the issues identified from the independent expert report published in November 2024 are addressed through:
APRA’s acceptance of a court enforceable undertaking (CEU) from Cbus to undertake a holistic risk transformation program to address concerns in relation to Cbus’ risk management and related issues.
The publication of a rectification plan prepared by Cbus to address weaknesses in governance and expenditure processes identified by an independent review as required under the additional licence conditions imposed by APRA in August 2024.
The review identified significant and persistent weaknesses in Cbus’ operational risk management framework, in addition to concerns related to insurance administration and outsourcing.
APRA is also exploring possible breaches of the Superannuation Industry (Supervision) Act 1993 (Cth) by Cbus through an investigation with a focus on expenditure management practices.
See APRA media release.
APRA proposes updated approach to treatment of HELP debts
On 20 February 2025, APRA announced that it is consulting on changes to how banks treat Higher Education Loan Program (HELP) debt in home loan assessments. The proposal includes removing HELP debt from debt-to-income ratio reporting and allowing banks to exempt HELP debt from loan serviceability assessments for borrowers likely to pay it off in the near term. These adjustments aim to provide clarity and consistency in the banking sector and potentially make it a little easier for some borrowers with HELP debts to purchase homes at an earlier time.
For more information see APRA media release.
APRA statement on BUSSQ Federal Court appeal
APRA imposed additional licence conditions on BUSS (Queensland) Pty Ltd as the trustee for the Building Unions Superannuation Scheme (Queensland) (BUSSQ) in August 2024 to safeguard the interests of members, ensuring prudential concerns could be addressed effectively and efficiently and promoting transparency in BUSSQ's response to such concerns.
The Board of BUSSQ decided to seek judicial review of APRA's decision in circumstances where it was on notice that an alternative and more cost-effective avenue of review, internal review, was available. In a judgment handed down on 31 January 2025, his Honour Justice Derrington found that BUSSQ should have availed itself of the internal review process, instead of applying to the Federal Court for relief. The BUSSQ Board has now taken the further step of challenging Justice Derrington's decision. APRA is considering the notice of appeal.
For more information see APRA media release.
APRA rescinds information paper on cloud outsourcing and ceases ad hoc credit reporting collection
On 19 February 2025, APRA rescinded its 2018 Information Paper Outsourcing Involving Cloud Computing Services in light of APRA Prudential Standard CPS 230 Operational Risk Management (CPS 230), which includes formal supervisory coverage for entities with cloud service provider arrangements and comes into effect on 1 July 2025. This move aims to reduce regulatory burden and enhance clarity regarding the expected approach for material service provider arrangements. APRA regulated entities will be expected to comply with CPS 230 requirements when using cloud services to appropriately manage associated risks and ensure operational resilience.
APRA has ceased the collection of "ARF 923.0 Covid-19 Capital and Credit" with the last submission being the period ending 31 January 2025. The decision was part of APRA’s regular review of its ad hoc data collection and follows a number of cessations in 2023 and 2024.
For more information see APRA media release.
AUSTRAC
AUSTRAC campaign targets remitters and digital currency exchanges
On 17 February 2025, AUSTRAC announced it had recently taken action against 13 remittance and digital currency exchange providers with more than 50 others still in its sights.
AUSTRAC is wrapping up a year-long blitz to target non-reporting and under reporting, issuing another round of alerts to the industry’s potentially non-compliant operators.
AUSTRAC CEO Brendan Thomas said alerts are a precursor to potential regulatory action and identify AUSTRAC’s concerns that operators may not be reporting suspicious matters and transactions to AUSTRAC.
Late last year, AUSTRAC cancelled, suspended and refused renewals of registration for 9 providers that had failed to meet their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). A further two providers had conditions placed on their registrations and are now on notice – a failure to meet these conditions may lead to suspension or cancellation of their registrations.
Current AUSTRAC records show 417 digital currency exchanges and 5,112 remittance registrations Australia-wide. Since January 2024, AUSTRAC has issued to 106 entities reminders of their obligations. The entities are across all sectors and those entities which continue to be non-compliant could face further regulatory action.
AUSTRAC remains concerned about money laundering risks in the digital currency exchange sector and will continue to address these concerns through the Crypto Taskforce established last year and its regulatory function more broadly.
See AUSTRAC media release.
Other regulators
ACCC authorises suspension and termination provisions relating to Bulk Electronic Clearing System
The ACCC has revoked authorisations A91473 and A91474, and substituted authorisation AA1000678, enabling Australian Payments Network Limited (AusPayNet) to give effect to suspension and termination provisions in the Bulk Electronic Clearing System (BECS) Regulations. The ACCC has granted authorisation for a period of 10 years, until 29 August 2034.
BECS is a system for managing the conduct of the exchange and settlement of bulk electronic low value transactions. The BECS Regulations contain provisions concerning the corporate governance of the system, including membership criteria, suspension and termination provisions, settlement and dispute resolution, amongst other matters. Only the suspension and termination provisions are the subject of this application.
Further information on the application, the draft determination and the final determination is available on the ACCC’s public register at: Australian Payments Network Limited – Bulk Electronic Clearing System.
See media release.
Legislation and proposed legislation
Securing regional banking services
The government is committed to maintaining banking services in regional areas and has secured commitments from the banks to ensure banking services remain available in the regions.
Key initiatives include:
Securing promises from major banks to prevent regional branch closures until at least 31 July 2027, addressing the 36% reduction in regional bank branches since 2017.
Reaching new Bank@Post agreements with CBA, NAB, Westpac and ANZ to bolster services in rural and regional areas, with Macquarie and HSBC also entering negotiations
The government continues to emphasise the importance of face-to-face banking services for regional communities and small businesses, despite the rise of digital banking.
See Treasury media release.
Scams Prevention Framework Bill commences
On 13 February 2025, the Scams Prevention Framework Bill 2025 (Bill) passed both Houses of Parliament. It commenced on 21 February 2025, the day after it received Royal Assent. For more information on the Scams Prevention Framework, refer to our G+T article on the new legislation.
Overall, there were only a few parliamentary amendments to the Bill. In addition to the small number of amendments made to the Bill between the first reading and third reading in Senate, on 12 February the Senate made four further amendments. These amendments are reflected in a separate schedule and include:
Specify that in determining whether a regulated entity has met an obligation under the Scams Prevention Framework (SPF) to take reasonable steps, the primary consideration must be whether the entity has complied with any corresponding SPF code obligations.
Clarify the guidelines for apportioning liability at internal dispute resolution (IDR) do not need to be consistent with the proportionate liability rules that apply in court actions for damages.
Require that the ACCC (as the SPF general regulator) publish a statement summarising the roles and responsibilities of certain entities with respect to the regulation, enforcement and administration of the SPF provisions.
See ACCC comment welcoming the passage of these world-first scams prevention laws.
According to the latest Regulatory Initiatives Grid, the next steps will be a consultation on the designation instrument in Q2 2025 and then consultation on industry codes and SPF rules in Q3 2025.
Parliamentary committee report on wholesale investor and wholesale client tests tabled
On 13 February 2025, the Parliamentary Joint Committee on Corporations and Financial Services (Committee) tabled the report of its inquiry into the wholesale investor test for offers of securities under section 708 of the Corporations Act and the wholesale client test for financial products and services under sections 761G and 761GA of the Corporations Act.
The Committee commenced its inquiry on 20 March 2024, received 128 submissions and held several public hearings over the course of 2024. The Committee's decision to inquire into the wholesale client and investor tests was prompted by consideration of the appropriateness of the current test thresholds in connection with the Australian Government's 2023 review of the regulatory framework for managed investment schemes (MIS Review).
The Committee noted that the current wholesale investor and client tests in the Corporations Act each have a product value test and a separate individual wealth test and that several submissions to both this inquiry and the MIS Review, including ASIC’s submission, recommended increasing the wholesale investor and client test thresholds. However, the Committee was not persuaded by the examples of investor harm identified by ASIC and other submitters as having been caused by the current settings of the test thresholds and ultimately did not recommend raising the relevant thresholds.
The Committee made the following recommendations:
The government consider establishing a mechanism for periodic review of the operation of the wholesale investor and client tests; and that any such mechanism includes mandatory requirements for engagement and consultation with Australia's investment industry.
Subject to a period of stakeholder consultation, the government amend the Corporations Act to remove the subjective elements of the sophisticated investor test and introduce objective criteria relating to the knowledge and experience of the investor.
Accordingly, reform of the wholesale investor and client tests is not an immediate priority for the Federal Government. Following Minister for Financial Services Stephen Jones’ announcement that he is stepping down from politics, his replacement will have the option to return to reforming the wholesale client definition following the federal election.
See the full report.
For all of the details of the Committee's inquiry, see Parliament of Australia website: Wholesale investor and wholesale client tests.
G+T articles
G+T Insight: The Scams Prevention Framework legislation passes Parliament: time to get your house in order – discusses the new Bill which introduces a new regulatory framework requiring banks, telecommunications companies and digital platforms to take proactive measures to prevent, detect, disrupt and report scams, with significant penalties for non-compliance, while empowering regulators like the ACCC to enforce compliance and facilitate consumer dispute resolution – Antonia Garling, Jeremy Jose, Silvana Wood and Chris Whittaker (14 February 2025).
G+T Insight: Updating super fund service provider agreements for CPS 230 – debunks seven myths about CPS 230 and separates fact from fiction, clearing the path to a pragmatic implementation approach and smoother negotiations with material service providers – Luke Barrett and Tim Gole (10 February 2025).
G+T Insight:Boardroom Brief Week Commencing 17 February 2025– Justin Mannolini, Cassandra Lee and Adam Sibum (20 February 2025).
Calendar dates
14 February 2025 – Consultation (first round) on draft AML/CTF rules closes
28 February 2025 – Submissions close for Treasury’s consultation on the use of LPP in Commonwealth investigations
28 February 2025 – Deadline for submissions to ASIC consultation on remaking of CHESS Depository Interests relief
28 February 2025 – Deadline for submissions to ASIC consultation on proposed updates to crypto-assets guidance
28 February 2025 – Updated Banking Code of Practice (2025 version) comes into effect
15 March 2025 – Financial Accountability Regime takes effect for superannuation and insurance bodies
31 March 2025 – Changes to the tipping off offence commence
10 June 2025 – Credit licensing requirements for Buy Now Pay Later providers commence
31 March 2026 – Amended AML/CTF obligations commence for existing reporting entities
31 March 2026 – Tranche two entities may enrol as reporting entities with AUSTRAC