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By Fiona Smedley and David Curley ASIC has released Consultation Paper 325 Product design and distribution obligations (CP 325), on its proposals for guidance on the design and distribution obligations in Pt 7.8A of the Corporations Act 2001 (Cth) (DDO). ASIC is seeking public input on CP 325 by 11 March 2020 with a view to releasing … Read more
Consumer credit providers in Australia have been eagerly awaiting ASIC’s updated regulatory guide on the responsible lending laws (RG 209), which landed on 9 December 2019 and is another significant development in the understanding of these laws. Read more
The Government has made the Corporations Amendment (Design and Distribution Obligations) Regulations 2019 (Regulations), relating to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (DDO). Read more
The implications of the recent Full Federal Court decision in ASIC v Westpac Securities Administration Limited [2019] FCAFC 187 (ASIC v Westpac) are far-reaching for the financial services industry. The case is, of course, a significant development in the laws concerning the parameters of general advice and personal advice. However, the potential impact on the provision and regulation of financial services more broadly should be explored. Read more
The FCA and PRA yesterday published a joint statement setting out their key observations from the responses of major banks and insurers in the UK to the Dear CEO letters published in September 2018, which asked for details of the preparations and actions being taken by those firms to manage transition from LIBOR to alternative interest rate benchmarks (SONIA in the UK).
The statement confirms that the FCA and PRA have reviewed responses from those firms and provided feedback directly. In addition, given the market-wide nature of the issue, they have decided to publish a number of market-wide observations which they have made in the course of reviewing the responses to the Dear CEO letters. The FCA and PRA identify a number of critical elements which were present in “stronger responses” to the Dear CEO letters, which are summarised below and provide some helpful guidance for other firms affected by LIBOR discontinuation. Read more
It is clear that, from 2021, LIBOR (at least as we know it) will cease to exist. Given its prevalence as an interest rate benchmark in contracts across multiple markets and jurisdictions, its demise raises questions about the litigation risks which parties to such contracts may face. Herbert Smith Freehills LLP have published an article in the Journal of International Banking Law and Regulation on the types of litigation which may arise, and some of the legal arguments which might be deployed. The full article is available here: LIBOR is being overtaken: Will it be a car crash? (2019) 34 J.I.B.L.R.
In our article we explore the sorts of claims which may arise by reference to the four markets which are most affected by the transition from LIBOR: (A) the loan market; (B) the derivatives market; (C) the bond market; and (D) the securitisation market. We also look at the potential regulatory consequences (both to the financial institution and to the applicable senior manager) of failing to put in place appropriate transition plans, and to demonstrate delivery of that plan going forwards. Read more