Unlisted structured products in Hong Kong - changes to private placements proposed
Important further changes to the offering of structured products have been proposed by Hong Kong’s Securities and Futures Commission (SFC). The proposals set out in the “Consultation Paper on Possible Reforms to the Prospectus Regime in the Companies Ordinance and the Offers of Investments Regime in the Securities and Futures Ordinance” (Paper) will eliminate a number of channels that are currently used to distribute structured products on an “exempt” basis in Hong Kong.
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Regulatory investigation and waiver of privilege - ASIC v Lindberg
The recent decision of the Victorian Court of Appeal in ASIC v Lindberg [2009] VSCA 234 considered whether someone who holds legal professional privilege (LPP) can assert that privilege in information that is in the hands of a third party who has obtained it from someone other than the holder of the LPP.
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Banks’ reputational risk can no longer be handled just by marketing departments
The China Banking Regulatory Commission (CBRC) has recently released a Guidance on Commercial Banks’ Management of Reputational Risks - changing the way financial institutions manage reputational risks. The new guidelines are aimed at having commercial banks take ownership of addressing and managing such risks.
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Draft short selling disclosure regulations released
Following a period of public and targeted consultation with key stakeholders, the Minister for Financial Services, Superannuation and Corporate Law today released the much anticipated draft regulations for the permanent reporting and disclosure regime for short selling.
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Productivity Commission releases recommendations on executive
The Productivity Commission has released its draft discussion report on executive remuneration for public consultation. The report proposes reforms to the Corporations Act, the ASX Listing Rules and corporate governance standards to improve the accountability of boards, remove conflicts of interest and enhance shareholder engagement on executive remuneration.
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Executive termination benefit laws delayed in senate
The Government’s proposed reforms to laws regulating executive termination benefits have been delayed in the Senate. This means the earliest the laws can be passed is when Parliament resumes on 17 October 2009.
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Draft transitional provisions for proposed ESS amendments released
Treasury has released draft transitional provisions for the proposed amendments to the employee share scheme rules (Draft Transitional Rules). The Draft Transitional Rules are a significant departure from the previous understanding that the proposed amendments would only apply to shares or rights acquired on or after 1 July 2009.
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The Senate Committee Report on the unfair terms bill - Are insurance contracts in or out?
The Trade Practices Amendment (Australian Consumer Law) Bill 2009 (Bill) was referred to the Senate Economics Legislation Committee (Committee) on 25 June 2009 for inquiry. The Committee received numerous submissions from various organisations and held two public hearings. The Committee released the report on its inquiry into the Bill on 7 September 2009.
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Australian carbon trading documentation launched
The Australian Financial Markets Association (AFMA) has launched its recommended form of Australian documents for domestic and international carbon trading. These documents (which are based on well-known international standards) are aimed at facilitating the growth of the carbon trading market in Australia. We look at answering ten key questions market participants may ask.
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ASIC passporting relief notices due this month
If you are regulated by the UK FSA, the US SEC, Federal Reserve, OCC or CFTC, the Monetary Authority of Singapore, the HK SFC or the German BaFin and have been granted Australian licensing relief then this month you must lodge a notice with the Australian Securities and Investments Commission (ASIC) to continue providing financial services to wholesale clients in Australia.
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Director and executive termination benefits - Government releases final regulations
On 3 September 2009, the Government released the final regulations and explanatory material relating to the proposed reforms to termination payments (Regulations), which define “base salary”, clarify and expand the types of benefits that are (and are not) subject to shareholder approval and prescribe circumstances in which a benefit is given in connection with a person’s retirement.
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Cooper Review: phased consultation begins
The Super System Review headed by Jeremy Cooper has today announced that its examination of Australia’s superannuation system will be conducted in three phases. The Review Panel has also called for submissions in response to the Phase One: Governance - Issues Paper also released today.
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James Hardie: former directors banned and penalised
Seven former non-executive directors and three former senior executives of James Hardie Industries Limited have today been ordered to pay a pecuniary penalty and banned from managing a corporation (including being a company director) for their roles in the release of a misleading ASX announcement.
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ASIC proposes radical reforms
The Australian Securities and Investments Commission has proposed some fundamental reforms to the Australian financial services industry. If adopted, the reforms would reshape the financial advice industry. Some would also have implications for the broader financial services industry and consumers.
ASIC has outlined its proposals for reform in a 184 page submission to the PJC Inquiry into Financial Products and Services in Australia.
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Changes to the National Consumer Credit Protection regime
The Government has announced an accelerated timetable for “responsible lending” requirements. From January 2010 - in less than four months - these will affect finance brokers, and lenders other than authorised deposit-taking institutions and registered financial corporations. Responsible lending obligations will affect other lenders from January 2011, in line with the previously announced timetable.
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Employee share schemes: impact of the Share Capital Tainting Rules
Companies may be required to recognise debits to their franking accounts, pay additional tax and be prohibited from making capital distributions following the recently released ATO ID 2009/87 on the share capital tainting rules.
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Chinese regulator issues new rules to regulate derivatives transactions
In a move designed to protect onshore (domestic) Chinese banks and their customers from exposure to derivative products which are perceived as being high risk, the China Banking Regulatory Commission (CBRC) has unveiled stringent new rules to further regulate the issue and use of derivative products.
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Government announces options paper to tackle legacy financial products
In the opening session of the Investment and Financial Services Association (IFSA) conference, the Minister for Financial Services, Superannuation and Corporate Law, the Hon. Chris Bowen MP, announced that an options paper will be released in coming weeks to tackle product rationalisations.
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Lehman Brothers’ priority provisions upheld
The High Court of England and Wales recently upheld the priority given to investors over the rights of Lehman Brothers as a swap counterparty in a credit-linked note structure. This means that, as a matter of English law, Lehman Brothers’ default under the swap will cause it to rank behind the investors on the application of the collateral which secures the amounts owed to the investors and Lehman Brothers.
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Loss roll-over for merging superannuation funds
The Government has released an exposure draft bill to provide roll-over relief for merging superannuation funds that have losses. The measure will provide roll-over relief for net capital losses and revenue losses, including for past income years. The relief extends to transfers where assets have been and/or will be held through a PST or life company. However, there are restrictions on the relief’s availability.
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New margin lending regulation: 7 steps for advisers
Legislation regulating margin lending as a financial product has been introduced into Federal Parliament. This alert provides seven steps to help financial planners and others involved in advising on and distributing margin loans to develop a plan to comply with the new regime.
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Unfair Contracts Bill: implications for financial services providers
Financial services providers will be regulated under a proposed national unfair contracts regime (“regime”) from 1 January 2010. The regime will apply to new contracts entered into after 31 December 2009, and also affect contracts that are varied after that date (but only to the extent of the variation). The first step will be to identify the affected products and services.
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National Consumer Credit Protection Bill introduced
The National Consumer Credit Protection Bill 2009 (Bill) has been introduced to Parliament. The Bill will mean sweeping changes for the Australian credit industry and a wide range of businesses that provide credit-related services. The Bill will establish a national licensing regime and impose new responsible lending obligations (the commencement of these will be delayed to 1 January 2011).
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Important disclosure changes for unlisted retail managed funds
The Australian Securities and Investments Commission (ASIC) has released new policy which will result in important changes to the way unlisted retail funds keep their investors updated. Regulatory Guide 198 (RG 198) provides guidance on how the continuous disclosure rules in the Corporations Act apply to unlisted funds, as well as an alternative disclosure regime based on website disclosure.
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Government introduces executive termination payment laws into Parliament
The Government has introduced its new laws regulating executive termination payments into Parliament. The Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 (Bill) retains the key changes proposed in the Exposure Draft of the Bill released in May 2009 but does contain some important differences.
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Unfair terms Bill introduced into Federal Parliament
The Minister for Competition Policy, Craig Emerson, today introduced the much-anticipated Trade Practices Amendments (Australian Consumer Law) Bill 2009 (Bill) into Federal Parliament.
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Widening the scope of share and interest purchase plans - ASIC class order
ASIC has today announced major changes to the rules relating to share and interest purchase plans (SPPs), extending the ability of ASX-listed entities to raise capital by offering shares or interests, including stapled securities (securities), to existing members without a prospectus or product disclosure statement.
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Australian Federal Court excludes forwards from derivative regulation
In a recent decision, the Federal Court of Australia has made some unexpected findings that, if taken to their apparently logical conclusion, might be argued to exclude some common derivatives from the Australian financial services regulatory regime. It is an interesting result, particularly in the context of the current global focus of expanding regulatory reach.
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Equity derivatives: Issues paper on proposed disclosure framework
The Federal Treasury has released an issues paper as part of the Government’s assessment of the existing ownership disclosure framework in light of the growing usage of both long and short equity derivative positions in the Australian financial markets. Any reforms which follow may have a significant impact on the Corporations Act substantial holding disclosure requirements as they apply to fund managers and others who enter into equity derivatives.
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Employee share schemes: Options paper and draft legislation for Budget changes released
On Friday 5 June 2009, the Federal Government released its options paper and draft legislation for the proposed amendments to the taxation of employee share schemes announced in the recent Federal Budget, for public consultation. The options paper and draft legislation contain significant changes to the existing rules relating to the taxation of employee share schemes. These are likely to significantly alter the way in which offerings of shares and options are designed and undertaken.
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Proposed employee share scheme amendments - key issues to consider
The Federal Government's announcement yesterday that it would fast track a consultation process on its proposed amendments to employee share schemes, as set out in the recent Federal Budget, is welcome news.
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Australian financial authorities release report on OTC market
Today, the three Australian financial authorities (the Australian Prudential Regulation Authority, the Australian Securities and Investment Commission and the Reserve Bank of Australia) published their joint report on the Australian over-the-counter (OTC) derivatives market. The report summarises the results of the survey which the authorities conducted in respect of the OTC market as well as identifying a number of areas in which practices in the Australian OTC market might be enhanced.
In the current context of the deluge of international statements regarding the future regulation of OTC derivatives market, the paper is highly relevant and may indicate the path which any future regulatory moves to be taken by these Australian authorities is likely to take.
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2009 Federal Budget measures - Significant changes for managed funds
In addition to the changes dealing with superannuation, the Federal Budget announcements contained significant changes, which are likely to have a widespread impact on the operation of managed funds in Australia and the global product which may be offered in Australia.
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Release of new margin lending & securities lending regulation
The Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 was released today. This Bill (together with the National Consumer Credit Protection Bill 2009 that was released last week) implements phase 1 of the Government's Action Plan for the regulation of credit. The Bill will have a significant impact on any person that issues, or provides advice in relation to, margin lending or securities lending facilities.
The key features of the Bill include the extension of Chapter 7 of the Corporations Act to margin lending and securities lending facilities and the creation of responsible lending obligations in respect of such facilities. The Bill also creates new obligations in relation to trustee companies and debentures.
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Government releases new laws to limit executive termination benefits
The Government has now released a draft of its new laws regulating executive termination payments. Under these new laws, termination benefits for directors and certain senior executive employees exceeding one year’s average base salary will require shareholder approval.
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Release of National Consumer Credit Protection Bill 2009
A public exposure draft of the National Consumer Credit Protection Bill 2009 was released on 27 April 2009. The Bill implements phase 1 of the Government’s Action Plan for single, standard, national regulation of consumer credit.
The Bill will have a significant impact on any person involved in the origination, management and enforcement of both consumer credit and credit provided to purchase, renovate or improve residential property for investment purposes. The key features of the Bill include the establishment of a national licensing regime and the creation of responsible lending obligations. Submissions on the Bill are due by Friday, 22 May 2009.
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Reforms to the offering and distribution of structured products in Hong Kong
On 25 March 2009, the Hong Kong Monetary Authority (HKMA) issued a circular setting out implementation measures and timeframes in relation to recommendations regarding the offering and distribution of structured products in Hong Kong (the “HKMA Circular”). The measures have important and immediate implications for distributors and manufacturers of structured products in Hong Kong and signal the start of a new wave of regulatory changes.
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ASIC extends ban on covered short selling of financial stocks - 5 March 2009
Today the Australian Securities and Investments Commission (ASIC) announced that it has extended its temporary ban on covered short selling of financial stocks until 31 May 2009, although it will keep the ban under review.
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Government announces extension of APRA’s supervisory and enforcement powers
Today the Assistant Treasurer and the Minister for Superannuation and Corporate Law announced that the Government proposes to introduce a Bill to regulate the non-operating holding companies (NOHCs) of life companies.
It is also proposed that the Bill, to be known as the Financial Sector Legislation (Enhancing Supervision and Enforcement) Bill 2009, will include provisions designed to improve the Federal Court of Australia’s ability to issue injunctions, on application by the Australian Prudential Regulation Authority (APRA), in respect of prudential matters.
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Henry Review calls for final public submissions
Businesses now have their last opportunity to make submissions to the Henry Review of the Tax System, with a series of meetings announced for all capital cities to obtain public views.
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New Australian short selling regime
The Corporations Amendment (Short Selling) Act 2008 became law on 11 December 2008. The three key measures include a legislative ban on naked short selling, a disclosure regime for permitted covered short selling, and clarification of the Australian Securities and Investments Commission’s (ASIC) powers.