PWC REGULATORY UPDATE - FEBRUARY 2019 - PWC AUSTRALIA
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PwC Regulatory Update February 2019
Contents
3 8 12
Legislative/ What have Industry bodies
Government the regulators been
developments up to?
14 21 26
Overseas PwC publications Contacts
developments
PwC Regulatory Update
PwC 2Legislative/ Government developments
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
1. Legislative/Government developments
Royal Commission into Misconduct in the Banking, Superannuation and Final Productivity Commission report into superannuation
Financial Services Industry The final report by the Productivity Commission into the efficiency and
The Government has released Commissioner Hayne’s final report, which competitiveness of Australia's superannuation system has been released. The
contains the results of his inquiry into Misconduct in the Banking, report found that while the superannuation system has served Australians
Superannuation and Financial Services Industry. The report outlines 76 reasonably well, there are significant issues within Australia’s superannuation
recommendations, which the Government has committed to implement. system, including:
Source: Royal Commission • The prevalence of high fees;
PwC has released a report, Resetting standards – now for the industry to • A significant number of unintended multiple accounts;
deliver, providing perspectives and insights on the Royal Commission Final
• Chronic underperformance by some funds; and
Report.
• A lack of effective competition particularly in the default fund system.
Source: PwC
The Commission has outlined 31 recommendations to improve the
Responding to the final report, The Australian Prudential Regulation Authority
superannuation system.
(APRA) stated its intention to implement the recommendations expeditiously. Of
the 76 recommendations there are 10 requiring APRA’s direct attention. Source: Treasury
Source: APRA
The Financial Services Council (FSC) viewed the release of the final report as
an opportunity to begin repairing the sector’s damaged reputation.
Source: FSC
Recommendations from the final report to strengthen the accountability and
effectiveness of regulators were welcomed by the Customer Owned Banking
Association (COBA), particularly the:
• New, independent oversight authority for APRA and the Australian Securities
Investment Commission (ASIC); and
• Regular capability reviews of APRA and ASIC.
Source: COBA
PwC Regulatory Update
PwC 4Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
1. Legislative/Government developments (cont’d)
Recent consultations Two bills implementing the tax and regulatory components of the CCIV regime
The Government has released a consultation paper; Stage Two of the have been released by the Government for public consultation. The proposed
Retirement Income Framework, and is seeking views on a proposed new law includes:
standardised document that outlines key metrics and features to help • The new Chapter 8B in the Corporations Act 2001 containing the core
consumers compare different retirement income products. provisions outlining the establishment of CCIVs and their operational and
Submissions are due by 28 March 2019. regulatory requirements;
Source: Treasury • Amendments to other legislation to support the implementation of CCIVs;
and
The Consultation process for Superannuation Contributions Tax regulations has
been completed by the Government. An Exposure draft, and supporting • The tax legislations, which ensures the tax treatment of CCIVs broadly
material, have been released to replace the existing Regulations, which are due aligns with the existing treatment of attribution management investment
to expire on 1 April 2019. Only minor technical changes have been made to trusts.
reflect current drafting practice and remove redundant references without Submissions are due by 28 February 2019.
altering the substantive meaning or operation of the existing Regulations.
Source: Treasury
Source: Treasury
The Government has released for public consultation an exposure draft of the A
New Tax System (Goods and Services Tax) Regulations 2019 and the Treasury
Laws Amendment (Goods and Services Tax) Regulations 2019 and explanatory
to replace the existing GST Regulations, which are due to sunset in April 2019.
The regulations are only being changed to the extent needed to ensure the
existing rules remain operational and the drafting is in line with current practice.
Source: Treasury
PwC Regulatory Update
PwC 5Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
1. Legislative/Government developments (cont’d)
ASIC Industry Funding Model and Registry Search Fees Introduction of the Consumer Data Right (CDR)
The consultation process has begun for the draft Treasury Laws Amendment In line with the recommendations of the Review into Open Banking in Australia,
(ASIC Cost Recovery and Fees) Regulations 2019. The purpose of the draft Treasury has prepared a first version of the Privacy Impact Assessment (PIA)
Regulations is to give effect to Government announcements to: for the CDR, in accordance with the Privacy (Australian Government Agencies
– Governance) APP Code 2017. The draft documents the learnings and
• Create a new subsector to enable ASIC to recover its regulatory costs
outcomes from extensive consultation on privacy risks associated with
incurred from its close and continuous monitoring of Australia’s largest
introducing consumer data access and portability rights. A revised PIA,
institutions;
incorporating the views of the public as well as key decisions on the Consumer
• Exempt journalists from paying certain registry search fees from 1 July 2019; Data Rules and standards, will be completed ahead of the Autumn
Parliamentary sitting period.
• Reduce the fee to access company roles and relationship extracts from $40
to $19 from 1 July 2019; and Source: Treasury
• Make other minor amendments to the Levy and Fees Regulations to ensure
ASIC’s regulatory costs are more accurately reflected.
Source: Treasury
PwC Regulatory Update
PwC 6Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
1. Legislative/Government developments (cont’d)
Transparency and enhanced disclosure practices in the General Government consults on a reporting regime for sharing economy platform
Insurance sector providers
A discussion paper, Disclosure in General Insurance: Improving Consumer Responding to the Black Economy Taskforce recommendation for a sharing
Understanding has been released by the Government in response to the Senate economy reporting regime, the Government has released a consultation paper;
Economic References Committee’s report into the general insurance industry. A sharing economy reporting regime. This paper is seeking the views of
This paper is requesting the views of interested stakeholders on the underlying interested stakeholders on the possible design characteristics of a reporting
issues and objectives behind the recommendations made in the Senate report. regime, including the scope of proposed information reporting requirements.
Submissions are due by 28 February 2019. Source: Treasury
Source: Treasury Government requests feedback of review into Initial Coin Offerings (ICOs)
Government consults on extending the tax regulations as they relate to An Issues Paper; Initial Coin Offerings (ICO), has been released for
mutually-owned authorised deposit taking institutions (ADIs) consultation. Interested parties are invited to provide feedback on any of the
issues raised in the paper, including:
The Government has release an exposure draft of the Treasury Laws
Amendment (2019 Measures No. #) Regulations 2019 for public consultation. • Opportunities and risks posed by ICOs for Australia;
The draft regulations propose to rectify the different treatment of capital
• A regulatory framework in Australia to allow those opportunities to be
instruments issued by mutually-owned ADIs by extending the operation of tax
harnessed while appropriately managing the associated risks; and
regulation to ensure equivalent treatment between capital instruments.
• Actions to be taken to best position Australia to capitalise on new
Source: Treasury
opportunities.
Submissions are due by 28 February 2019.
Source: Treasury
PwC Regulatory Update
PwC 7What have the regulators been up to?
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
2. What have the regulators been up to?
APRA ASIC ASX AUSTRAC
Australian Prudential Regulation Australian Securities and Investments Australian Securities Exchange Australian Transaction Reports and
Authority Commission Analysis Centre
The Australian Prudential Regulation Authority (APRA) finalises new APRA will remove interest-only benchmark for residential mortgage
measures to strengthen outcomes for superannuation members lending
APRA has released a package of new and enhanced prudential requirements In a letter to all Authorised Deposit-Taking Institutions (ADIs), APRA has stated
designed to strengthen the focus of registrable superannuation entity (RSE) its intention to remove the supervisory benchmark on interest-only lending, for
licensees on the delivery quality outcomes for superannuation members. The ADIs that have provided assurances on the strength of their lending standards.
package includes: The benchmark was put in place only as a temporary measure, in 2017, to
reduce the level of interest-only lending and improve the quality of mortgage
• SPS 515 - Strategic Planning and Member Outcomes;
portfolios.
• SPS 220 - Risk Management;
See: APRA
• SPG 515 - Strategic and Business Planning; and
• SPG 516 - Outcomes assessment.
The introduction of an outcomes assessment is a central component of APRA’s
new framework. The assessment requires RSE licensees to annually
benchmark and evaluate their performance in delivering sound and valuable
outcomes to all members.
The new measures will be effective from 1 January 2020.
See: media release
PwC Regulatory Update
PwC 9Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
2. What have the regulators been up to? (cont’d)
APRA ASIC ASX AUSTRAC
Australian Prudential Regulation Australian Securities and Investments Australian Securities Exchange Australian Transaction Reports and
Authority Commission Analysis Centre
Recent Consultations Recent key updates
The Australian Securities & Investments Commission (ASIC) is seeking The Global Financial Innovation Network (GFIN) was launched in January 2019
feedback on proposed changes to the fees and costs disclosure regime for by an international group of financial regulators and related organisations,
management investment schemes and superannuation outlined in consultation including ASIC. The GFIN intends to provide a more efficient way for innovative
paper, Review of RG 97 Disclosing fees and costs in PRSs and periodic firms to interact with regulators, helping them navigate between countries as
statements. The paper includes a proposed updated regulatory guide, they look to scale new ideas.
Disclosing fees and costs in PDSs and periodic statements (RG 97), and draft
Since 1 January, 2019 new professional standards requirements for financial
amendments to Schedule 10 of the Corporations Regulations.
advisers have been progressively replacing training standards in Licensing:
Submissions are due by 2 April 2019. Training of financial product advisers (RG146). New entrants to the industry
seeking to become a relevant provider will need to meet the new professional
Recent reports
standards requirements.
ASIC has released research exploring the consumer experience of internal
dispute resolution (IDR) procedures across the financial services sector. The
research highlighted the difficulties people face in approaching and navigating
the complaints process.
A report, Allocations in equity raising transactions, has been released by ASIC.
The report details the findings of ASIC’s review of allocations in equity raising
transactions across a range of large and mid-sized Australian-based licensees.
The report makes recommendations on improvements to licensee practices in
the conduct of allocations.
PwC Regulatory Update
PwC 10Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
2. What have the regulators been up to? (cont’d)
APRA ASIC ASX AUSTRAC
Australian Prudential Regulation Australian Securities and Investments Australian Securities Exchange Australian Transaction Reports and
Authority Commission Analysis Centre
The ASX consults on 90 Day Bank Bill Futures contract changes AUSTRAC will reform the superannuation sector with new guidance
The ASX has released a consultation paper, ASX 90 Day Bank Bill Futures AUSTRAC has published guidance to assist reporting entities in the
Contract Changes, seeking feedback from market participants on the following superannuation sector to:
proposed changes to the Bank Bill futures contract:
• Better understand their obligations under the Anti-Money Laundering and
• Change to the settlement process to make the contract cash settled at Counter-Terrorism Financing Act 2006 (AML/CTF Act);
expiry;
• Identify risks and potential criminal actions arising from the conduct of
• Application of expiry position limits; superannuation funds and their clients;
• Reduction in the minimum price increment for specific bank bill futures • Explain how these reporting entities can use their AML/CTF ‘toolkit’ to
months; mitigate the industry-specific money laundering and terrorism financing
• Increase to the maximum allowable order size; (ML/TF) risks they face.
• Listing of serial bank bill futures; and See: media release
• Development of Good Till Cancelled (GTC) spread order functionality.
Submissions are due by 30 April 2019.
See: media release
PwC Regulatory Update
PwC 11Industry bodies
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
3. Industry bodies
FASEA FPA FSC
Financial Adviser Standards and Ethics Authority Financial Planning Association of Australia Financial Services Council
Professional associations announce a landmark code monitoring FSC consults on rebuild consumer code
cooperation agreement The Asian Region Funds Passport (ARFP), a multilateral framework which
The Financial Planning Association of Australia (FPA), along with five other allows eligible managed funds to be marketed to retail investors across
professional associations representing the financial planning/advice sector,, participating countries, has become operational from 1 February 2019. The
have signed a cooperation agreement to develop a code monitoring solution for current signatories to the ARFP are Australia, Japan, New Zealand, South
their members. Korea and Thailand.
The code monitoring compliance scheme application will be submitted to ASIC See: media release
and aims enable compliance with the Financial Adviser Standards and Ethics
Authority (FASEA) code of ethics to be monitored and enforced.
A special purpose company, Financial Advisers Monitoring Scheme (FAMS),
has been established to operate the compliance scheme.
See: media release
PwC Regulatory Update
PwC 13Overseas developments
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – Global
BIS: Recent report BIS: Recent announcements IOSCO: Recent announcements
The Basel Committee on Banking Supervision The BCBS has released an updated Pillar 3 The Board of the International Organisation of
(BCBS) has published a report; Cyber-resilience: disclosure requirements, endorsing market Securities Commissions (IOSCO) has released a
range of practices, which identifies, describes and discipline through regulatory disclosure report, IOSCO Report on Good Practices for Audit
compares the range of observed bank, regulatory requirements in the following areas: Committees in Supporting Audit Quality, to assist
and supervisory cyber-resilience practices across audit committees in promoting and supporting
• Credit risk, operational risk, the leverage ratio
jurisdictions. audit quality.
and credit valuation adjustment risk;
Source: BIS The report has offered best practices to help audit
• Risk-weighted assets (RWAs); and committees in the following set of tasks:
• An overview of risk management, RWAs and • Recommending the appointment of an auditor;
key prudential metrics.
• Assessing potential and continuing auditors;
Source: BIS
• Setting of audit fees;
The BCBS has released a consultation paper,
Revisions to leverage ratio disclosure • Facilitating the audit process;
requirements, seeking feedback on revisions to • Assessing auditor independence;
leverage ratio Pillar 3 disclosure requirements to
further include: • Communicating with the auditor; and
• Mandatory disclosure of the leverage ratio • Assessing audit quality.
exposure measure amounts of securities Source: ISOCO
financing transactions;
• Derivatives replacement cost; and
• Central bank reserves calculated using daily
averages over the reporting quarter.
Submissions are due by 13 March 2019.
Source: BIS
PwC Regulatory Update
PwC 15Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – Europe
EBA: Recent guidelines EBA: Recent announcements EBA: Recent announcements
The European Banking Authority (EBA) has The EBA sought feedback on its consultation to The ESAs has published two joint draft
released its final guidelines about different kinds amend the Commission's Implementing Regulatory Technical Standards (RTS) to
of exposures associated with high risk under the Regulation on benchmarking of internal models to amend the RTS on the clearing obligation and risk
Capital Requirements Regulation (CRR). The adjust the benchmarking portfolios and reporting mitigation techniques for non-cleared OTC
guideline would enable current practices requirements. The amendments aim to simplify derivatives not cleared by central counterparties
comparability and facilitate easy transition to the the portfolio's structure for the credit risk part and (CCPs). The amendments will provide a specific
upcoming regulatory revisions . gaining more insights into the market risk pricing treatment for simple, transparent and
model of benchmarking exercise to be carried out standardised (STS) securitization to ensure a
Source: EBA
in 2020 . level playing field with covered bonds for the
The EBA has published final guidelines on the proper implementation of the European Market
Source: EBA
simple, transparent and standardised (STS) Infrastructure Regulation (EMIR).
criteria for the securitisation on a cross sectoral The European Supervisory Authorities (ESAs)
Source: ESMA
basis. The guidelines will help in easy has published a joint report on innovation
interpretation of the STS criteria and common facilitators (regulatory sandboxes and innovation The EBA has published its report on the
understanding for all the parties involved. hubs). The report presents a comparative applicability and appropriateness of EU law to
analysis of the innovation facilitators established crypto-assets, examining the following key areas
Source: EBA
to date within the EU coupled with best practices in its respect:
The EBA has released its final guidelines on for the design and operation of innovation
• The application of current EU banking,
disclosure of non-performing and forborne facilitators.
payments, e-money and anti-money
exposures. The disclosure will help to provide a
Source: EBA laundering laws to crypto-assets;
clear picture of the quality of the banks' assets,
the main features of their non-performing and • Crypto-asset custodian wallet providers and
forborne exposures, and the distribution of the crypto-asset trading platforms; and
problematic assets and the value of the collateral
• Credit institutions, investment firms, payment
backing those assets in case of more troubled
institutions and electronic money institutions'
banks.
activities involving crypto-assets and
Source: EBA regulatory and supervisory issues.
Source: EBA
PwC Regulatory Update
PwC 16Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – Europe
ESMA: Recent announcements ESMA: Recent announcements EIOPA: Recent opinions
The European Securities and Markets Authority The ESMA has published its guidelines on initial The European Insurance and Occupational
(ESMA) has published its final report amending coin offerings and crypto-assets, providing its Pensions Authority (EIOPA) has published an
the tick size regime. The amendments will allow position on any gaps and issues in the current EU opinion on non-life cross-border insurance
National Competent Authorities (NCAs) of financial regulatory framework for consideration business of a long-term nature and its
European Union (EU) trading venues to decide on by EU policymakers. supervision. The Opinion is addressed to NCAs
an adjusted average daily number of transactions ESMA has identified a number of concerns while and outlines EIOPA’s expectations to cross
(ADNT) on a case-by-case basis for the liquidity conducting a survey of NCAs during 2018: border undertakings and recommendations to the
available on third country venues in the calibration NCAs on the following aspects:
of tick sizes. • Crypto assets qualified under Markets in
• Expectations on technical provisions with the
Financial Instruments Directive (MiFID) need
Source: ESMA focus on the best estimate calculation;
potential interpretation or re-consideration of
specific requirements to allow for an effective • Expectations on governance, namely on the
application of existing regulations; and key functions and the Administrative,
Management or Supervisory Body (AMSB);
• In cases where these assets do not qualify as
and
financial instruments, the investors are subject
to potential risks without proper financial rules • Recommendations on the supervisory review
applicable. process and the collaboration between home
and host NCAs.
Source: ESMA
Source: EIOPA
PwC Regulatory Update
PwC 17Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – UK
FCA: Recent consultations FCA: Recent consultations PRA: Recent consultations
The Financial Conduct Authority (FCA) is The FCA is seeking feedback on its proposals to The Prudential Regulation Authority (PRA) has
consulting on cryptoassets guidance to provide change the ways banks and building societies released a consultation paper, Credit risk
clarity to market participants regarding whether charge for overdrafts (CP18/42) and extends mitigation: Eligibility of financial collateral, seeking
their activities fall within the scope of the FCA’s protection to customers of home-collected credit, feedback on proposed changes to Supervisory
regulatory remit and related authorisation catalogue credit, store card and buy now pay later Statement Credit risk mitigation (SS17/13). It aims
requirements. It also states that tokens are likely offer sectors (CP18/43). to clarify expectations regarding the eligibility of
to be classified as: Submissions are due by 18 March 2019. financial collateral as funded credit protection
under the Capital Requirements Regulation.
• Specified Investments under the Regulated Source: FCA
Activities Order; Submissions are due by 10 April 2019.
• Financial Instruments under the Markets in Source: Bank of England
Financial Instruments Directive II;
The PRA is seeking feedback on proposed rules
• E-Money under the E-Money Regulations; and for UK banks and building societies with £50
billion or more in retail deposits on an individual or
• Captured under the Payment Services
consolidated basis, to assess the preparations for
Regulations.
resolution, submit a report of their assessment to
Submissions are due by 5 April 2019. the PRA, and publish a summary of their report.
Its purpose is to ensure firms that pose a high risk
Source: FCA
to the UK’s financial stability are resolvable by
2022 and increase firms’ accountability &
ownership of progress.
Submissions are due by 5 April 2019.
Source: Bank of England
PwC Regulatory Update
PwC 18Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – UK
CFTC: Recent announcements OCC: Recent consultations SEC: Recent announcements
The Commodity Futures Trading Commission The Office of the Comptroller of the Currency The Securities and Exchange Commission (SEC)
(CFTC) has released an amended order to allow (OCC) has requested feedback on its proposed is seeking feedback on proposed rules requiring
additional Multilateral Trading Facilities (MTFs) rule to amend their stress testing requirements for the application of risk mitigation techniques to
and organised trading facilities to be exempted national banks and Federal savings associations. portfolios of uncleared security-based
from the Swap Execution Facility (SEF) The proposed rule would: swaps. The proposed changes include:
registration requirement with the CFTC.
• Revise the minimum threshold for national • Reconciling outstanding security-based swaps
Source: CTFC banks and Federal savings associations to with applicable counterparties on a periodic
conduct stress tests from $10 billion to $250 basis.
The CFTC is seeking feedback on the underlying
billion;
technology, opportunities, risks, mechanics, use • Engaging in certain forms of portfolio
cases, and markets for virtual currencies beyond • Revise the frequency of stress testing for compression exercises.
Bitcoin, namely Ether and its use on the Ethereum national banks and Federal savings
• Executing written security-based swap trading
Network. associations; and
relationship documentation with each of its
Source: CFTC • Reduce the number of required stress testing counterparties prior to, or contemporaneously
scenarios from three to two. with, executing a security-based swap
transaction.
Source: OCC
Source: SEC
The five Federal financial regulatory agencies are
seeking feedback on a proposal to exclude certain
community banks from the Volcker rule,
consistent with the Economic Growth, Regulatory
Relief, and Consumer Protection Act
(EGRRCPA). The agencies are jointly proposing
to exclude community banks with $10 billion or
less in total consolidated assets and total trading
assets and liabilities of 5 percent or less of total
consolidated assets from the rule restrictions.
Source: OCC
PwC Regulatory Update
PwC 19Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
4. Overseas developments – ASIA
HK: Recent announcements Korea: Recent announcements Singapore: Recent announcements
The Securities and Futures Commission (SFC) The FSC announced follow-up measures for The Monetary Authority of Singapore (MAS) has
and the Commission de Surveillance du Secteur capital market reform, including: issued a revised Singapore Code on Take-overs
Financier (CSSF) have entered into a and Mergers to clarify its application for dual class
• New schemes of introducing a specialised
Memorandum of Understanding (MoU) on Mutual share companies with a primary listing on the
brokerage company to facilitate investment
Recognition of Funds, which will enable Hong Singapore Exchange. The key changes to the
into unlisted securities of SMEs and venture
Kong public funds and Luxembourg Undertakings Code are:
companies; and
for Collective Investment in Transferable
• Relief for shareholders who trigger a
Securities (UCITS) to be distributed in each • Growing a pool of professional investors.
mandatory general offer.
other’s market. The MoU also establishes:
Source: FSC
• Greater certainty for the market and
• A framework for exchange of information; and
The FSC announced its plans to improve the safeguards for minority shareholders.
• Regular dialogue and regulatory cooperation in Korea Next Exchange (KONEX) by:
Source: MAS
regards to the cross-border offerings of eligible
• Facilitating fundraising by SMEs & venture
Hong Kong public funds and Luxembourg
companies;
UCITS funds.
• Boosting liquidity in the KONEX market;
Source: SFC
• Strengthening its role of nurturing SMEs &
venture companies; and
• Enhancing investors’ trust in the KONEX
market.
Source: FSC
PwC Regulatory Update
PwC 20PwC publications
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
5. PwC publications
PwC AUS: Super snapshot: Assessing PwC AUS: APRA’s Member Outcomes PwC AUS: Regulatory Guide 132 –
efficiency and competitiveness Prudential Reforms – Our Perspectives Compliance and oversight
PwC AUS has issued a report, Super snapshot: APRA released new prudential requirements on In response to ASIC issuing Regulatory Guide
Assessing efficiency and competitiveness, 12 December 2018 as part of Prudential Standard 132, PwC AUS has released a report, Regulatory
summarising the 31 recommendations proposed SPS 515 Strategic Planning and Member Guide 132 – Compliance and oversight, detailing
for superannuation in the Productivity Outcomes (SPS 515). what the new regulatory guide means for industry
Commission’s final inquiry report. participants.
Under the new requirements, trustees will need to
The report further discusses the additional demonstrate that their strategic planning The key areas that responsible entities should
impacts on employers, administrators and processes meet APRA’s principles as well as consider are:
auditors in the industry. undertake an annual assessment of outcomes
• Compliance management systems (CMS);
delivered to members.
See publication
• Compliance plans;
PwC AUS has issued a report, APRA’s Member
Outcomes Prudential Reforms – Our • Compliance committees;
Perspectives, highlighting the four main
• Compliance plan auditors; and
requirements of the reforms and their subsequent
impacts. • Australian passport funds
See publication See publication
PwC Regulatory Update
PwC 22Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
5. PwC publications (cont’d)
PwC AUS: Summary of ASIC Consultation PwC HK: Asset & wealth management 2025 - PwC HK: Asset & wealth management tax
Paper 308 on RG97 The Asian awakening highlights – Asia Pacific
ASIC released Consultation Paper 308 on 8 PwC HK has released a report, Asset & wealth In the latest edition of asset and wealth
January 2019 in relation to the independent management 2025 - The Asian awakening, management tax highlights for the Asia Pacific
expert’s proposed amendments’ to Regulatory highlighting how the industry will be impacted by region, PwC HK has highlighted industry and tax
Guide 97, Disclosing fees and costs in PDSs and changing people skills, fees, products, distribution developments from Australia, China, Hong Kong
periodic statements (RG97). regimes, regulations and use of technology in and India, which may impact asset and wealth
future. It brings out the following five key trends: management businesses.
PwC AUS has released a report, Summary of
ASIC Consultation Paper 308 on RG97, which • Investor and regulatory scrutiny shifting power In Australia, regulations have been introduced to
highlights the proposed amendments, key to investors; update the list of Exchange of Information (EOI)
observations and next steps. for 54 countries, which are now able to access the
• Entry of younger generation of tech-savvy
concessional Managed Investment Trust (MIT)
See publication investors;
withholding tax rate of 15% in respect of qualifying
• Passive strategies gaining favour over active MIT distributions.
strategies;
Hong Kong has signed a bilateral Competent
• APAC asset and wealth managers acting as Authority Agreement (CAA) on Automatic
the new financiers of infrastructure and real Exchange of Financial Account Information
estate projects; and (AEOI) with Mainland China. To deepen the
financial cooperation between China and the UK
• Financial integration across developed
and to expand the opening up of China’s capital
markets is driving the region to become more
market, a new investment scheme (the Shanghai-
cooperative and interconnected.
London Stock Connect) will be launched in both
See: publication the Shanghai Stock Exchange and the London
Stock Exchange.
See: publication
PwC Regulatory Update
PwC 23Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
5. PwC publications (cont’d)
PwC UK: CBI PwC Financial Services Survey PwC US: Current developments for mutual PwC US: How to make your analytics
PwC UK has published a report, CBI PwC fund directors functions more efficient and cost-effective
Financial Services Survey – Q4 2018, PwC US has published the latest edition of Analytics tools have long promised to help
summarising the results from the survey of the UK Current developments for mutual fund directors: executives make more informed business
financial services sector covering questions on Perspectives for management and the Board. decisions but many of these tools have been
business optimism, value and volume of This edition includes featured articles on topics ineffective due to the flood of new data and the
business, charges/costs and profitability, affecting the mutual fund industry, including: time required preparing and analysing it.
employment and training, capital expenditure,
• Board composition – Key trends and PwC US has published a report, Financial
business prospects, regulation, growth,
developments; intelligence - how to make your analytics
competitiveness and financial market conditions.
functions more efficient and cost-effective,
• Trends in mutual fund expenses: challenges
Some of the key findings are as below: outlining how automation may help analytics tools
and opportunities ahead;
fulfill their intended output and decision-driven
• The financial services industry is undergoing
• PwC Liquidity Risk Management role.
unprecedented change driven by innovation
benchmarking results; and
and technology. See: publication
• Mutual fund tax function of the future.
• Optimism in the financial services industry
decreased further in the fourth quarter of 2018. See: publication
• Top 5 challenges faced by financial services in
2019 are: macroeconomic uncertainty;
regulatory compliance; Brexit; financial market
instability and making better use of data to
improve customer experience and business
performance.
See: publication
PwC Regulatory Update
PwC 24Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
5. PwC publications (cont’d)
PwC US: Financial Services deal insights - PwC US: IASB proposes to further amend
year end 2018 IFRS 17
PwC US has published a report, Financial The International Accounting Standards Board
Services (FS) deal insights: Year-end 2018, (IASB) has proposed amendments to IFRS 17 to
highlighting the 2018 activities and trends in better reflect the economics of insurance
Banking Capital Markets, Insurance and Assets contracts. The proposed amendments include:
and Wealth management sector. Some of the key
• Requiring allocation of insurance acquisition
findings of the report are:
cash flows to anticipated future renewals;
• The value of FS deals in 2018 rose above prior
• Requiring recognition of a gain in profit or loss
year levels.
when an insurer recognises losses on onerous
• The surge shows no signs of weakening in underlying insurance contracts at initial
2019 owing to digital disruption, market recognition, to the extent that a reinsurance
volatility, and the clear gains from contract held covers the losses of each
consolidation. contract on a proportionate basis;
• PwC expect corporate, venture, and private • Expanding the scope for the risk mitigation
equity to play a bigger role in acquisitions and exemption for insurance contracts with direct
minority investments both inside and outside participation features to reinsurance contracts
the US. held that are used to mitigate financial risk;
and
See: publication
• Requiring consideration of the existence of an
investment return service in allocating the
CSM using coverage units.
PwC US has released a report; IASB proposes to
further amend IFRS 17, outlining the key points
from the proposal.
See: publication
PwC Regulatory Update
PwC 25Contacts
Legislative/ What have
Industry Overseas PwC
Government the regulators Contacts
bodies developments publications
developments been up to?
6. Contacts
Nicole Salimbeni Sarah Hofman
Partner Partner
Email: nicole.salimbeni@pwc.com Email: sarah.hofman@pwc.com
Tel: (02) 8266 1729 Tel: (02) 8266 2231
Edwina Star Craig Stafford
Partner Partner
Email: edwina.star@pwc.com Email: craig.stafford@pwc.com
Tel: (02) 8266 4940 Tel: (02) 8266 3725
Amrita Jebamoney
Partner
Email: amrita.jebamoney@pwc.com
Tel: (02) 8266 1826
PwC Regulatory Update
PwC 27Thank you www.pwc.com.au www.pwc.com.au © 2019 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australia member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Liability limited by a scheme approved under Professional Standards Legislation. At PwC Australia our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.au. WL 127067461
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