State of Play: Taking ‘reasonable steps’ under financial services law

On 29 February, Jackson J handed down the decision in Australian Securities and Investments Commission v R M Capital Pty Ltd [2024] FCA 151 (ASIC v RM Capital). The case concerned whether RM Capital Pty Ltd (RM Capital), a financial services licensee, took reasonable steps to ensure its authorised representative, The SMSF Club Pty Ltd … Read more

5 YEARS ON FROM THE ROYAL COMMISSION

It has been 5 years since Commissioner Hayne, in February 2019, released the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (FSRC). It was a watershed moment for the financial services sector, with the rippling effects still being felt 5 years on. It is safe to say … Read more

Regulatory Rumbles: Can an issuer be held liable for a distributor’s conduct?

Increasingly, ASIC has sought to hold product issuers responsible for the conduct of other entities down the distribution chain. The recent case of ASIC v Diversa Trustees Limited [2023] FCA 1267 (Diversa) is an example of this. In this edition of Regulatory Rumbles, we explore this trend and examine the legal bases for holding product … Read more

QUALITY OF ADVICE TRANCHE 1: HSF MAKES SUBMISSION ON TREASURY CONSULTATION

On 14 November 2023, Treasury released exposure draft legislation for consultation, proposing amendments to a number of statutes in response to the Quality of Advice Review. Our team has made a formal submission on this consultation. In summary, our submission addresses the proposed removal of the exception to the conflicted remuneration provisions for benefits given by … Read more

ASIC doubles down – DDO pressure points

Following months of heightened scrutiny on target market determinations (TMDs) across the financial services sector, we are seeing signs that ASIC has shifted its focus on broader product and distribution governance under the DDO regime. In particular, ASIC has started issuing statutory notices and asking questions as part of a thematic review into how issuers and distributors are complying with their reasonable steps obligations. In this article, we focus on some of the key pressure points in DDO compliance as ASIC shifts its focus. Read more

FSR GPS: WHEN IS AN INCORRECT MISSTATEMENT NOT MISLEADING OR DECEPTIVE?

In this edition of the FSR GPS, we highlight some key principles that can help AFS licensees identify when an immaterial misstatement may: not constitute misleading or deceptive conduct; and therefore, not automatically be reportable as a significant breach to ASIC under section 912DAA of the Corporations Act 2001 (Cth) (Corporations Act). As with our … Read more

ASIC ‘lifts its game’ on DDO

The Design and Distribution Obligations (DDO) regime is increasingly becoming a cornerstone in ASIC’s supervision and enforcement arsenal. In the latest, on 18 May 2023, ASIC announced that it had made 8 new interim stop orders preventing the issue of derivatives including contracts for difference (CFDs) to retail clients because of deficiencies in their target … Read more

Quality of Advice Review: HSF makes submission on financial advice reform

In August 2022, the Quality of Advice Review released its Proposals Paper setting out a range of proposals to improve the accessibility and affordability of financial advice. Our team has made a formal submission to the Quality of Advice Review. While we strongly support the majority of the proposals outlined in the Proposals Paper, there are … Read more

Anti-hawking in financial services: Some observations on multi-product discounts

For some time now, the issue of whether a sales representative can cross-position different insurance policies or financial products through the mechanism of a multi-policy or multi-product discount has been somewhat of a vexed issue – to say the least. In this context, we are referring to a scenario where a client makes an enquiry … Read more