The Australian Law Reform Commission Final Report, Confronting Complexity: Reforming Corporations and Financial Services Legislation (Report 141, 2023), has been released by the Attorney-General. Background.
The report found that “after more than 20 years of development, the legislative framework for corporations and financial services regulation is no longer fit for purpose. The existing legislative framework is unnecessarily complex, and complexity only continues to accrue.”
Its solutions include:
- Restructuring and reframing financial services legislation
- Applying a principled model to the legislative hierarchy, including having related provisions proximate to one another (grouping) and structuring legislation to ensure an intuitive flow that reflects the needs of potential users (intuitive flow)
- Clearly communicating fundamental norms of behaviour underpinning the legislation
- Making offences and civil penalties more visible
- Making definitions easier to find and understand.
The ALRC has made 58 recommendations for reform which would produce legislation that:
• is easier to navigate and understand;
• reduces the costs of unnecessary complexity in the existing legislative framework;
• promotes the principled use of delegated legislative powers, with appropriate levels of guidance and oversight from Parliament;
• promotes meaningful compliance with the substance and intent of the law;
• is flexible and adaptive to new business models, technologies, and practices; and
• provides a better platform for implementing future policy initiatives.
Of the 58 recommendations, 23 were made by the ALRC in Interim Reports A, B, and C.
The recommendations focus on consumer protection, disclosure, financial advice and licensing, and technical simplification.
Whilst the Final Report contains an implementation roadmap, the Government has not responded with a timetable.
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Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.