Financial services regulatory changes effective July 2018

This is a checklist of financial services regulatory changes effective from 1 July 2018 (or soon after).

BEAR Act
The new regime applies to the largest banks from 1 July 2018; other ADIs have until 1 July 2019 before they are subject to the BEAR. After BEAR applies to an ADI, it will then have three months to register their accountable persons and until 1 January 2020 to incorporate the remuneration requirements in pre-existing executive employment contracts. Background.

Credit card changes
From 1 July 2018 unsolicited offers of credit limit increases are prohibited. Background.

Credit Reporting Code changes
Variations to the Code have been registered. More.

Insolvency ipso facto contract clauses
The provisions imposing a stay on these clauses have commenced subject to financial services exceptions. More.

GST on property settlements
From 1 July 2018, certain purchasers of new residential premises or potential residential land will be required to withhold a GST amount from the price of the supply for payment to the ATO. Details. Lenders need to consider whether borrowers have a withholding obligation.

Superannuation life insurance code
The Insurance in Superannuation Voluntary Code of Practice for superannuation trustees came into effect on 1 July 2018.
It sets up a framework and standards designed to ensure fund members who cease contributions are not charged fees for unneeded or excessive life insurance cover as well as guidelines for cessation of cover notifications and simpler and clearer processes for fund members to opt out of automatic life insurance. Background.

Fees and charges

New PPSR fees and charges commence on 1 August 2018. Personal Property Securities (Fees) Determination 2018

Other regulators now charge a supervisory levy in addition to fees for service. Fees for service changed on 1 July.

ASIC fees for service
The Corporations (Fees) Amendment (ASIC Fees) Act 2018 received assent on 28 June 2018. This Act makes further changes to legislation to implement the ASIC industry funding regime, including increasing the fees ASIC can recover to reflect the costs incurred in the provision of regulatory services. Background.

APRA fees for service
Australian Prudential Regulation Authority Instrument fixing charges No. 5 of 2018 fixes charges to be paid in relation to: friendly society rules and rule amendment applications; applications for authorisation as a Private Health Insurer; applications to hold stakes in a financial sector company; transfer of business applications; and applications to hold a Restricted Authorised Deposit-taking Institution (ADI) licence and progression to an ADI.

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