2022 Banner

Submissions - 2022

Date Title & Summary Topic Area Sent to
26-Apr-2022

ASX OTC Interest Rate Derivatives Clearing Consultation: OTC Fallback Rate Provisions and OTC Product Eligibility Enhancements

AFMA made a submission particularly regarding the performance and usefulness of the Liquidity Coverage Ratio (LCR) and whether there are any areas for improvement. The submission noted that while an important tool to protect financial systems globally, the LCR has costs in the Australian context associated with the optimisation of ADI’s lending performance. Cash which otherwise would be on-lent to retail and commercial clients is employed in low yield HQLA1. The submission stated suggestions for improvement such as recognition of a broader class of HQLA1 assets and HQLA2 assets, the potential to only apply the LCR and Net Stable Funding Ratio (NSFR) to designated significant financial institutions and reforms to enhance Australia’s competitive position in global markets.

Regulation ASX
14-Apr-2022

Post-implementation review of the Basel III liquidity ratios in Australia

AFMA made a submission particularly regarding the performance and usefulness of the Liquidity Coverage Ratio (LCR) and whether there are any areas for improvement. The submission noted that while an important tool to protect financial systems globally, the LCR has costs in the Australian context associated with the optimisation of ADI’s lending performance. Cash which otherwise would be on-lent to retail and commercial clients is employed in low yield HQLA1. The submission stated suggestions for improvement such as recognition of a broader class of HQLA1 assets and HQLA2 assets, the potential to only apply the LCR and Net Stable Funding Ratio (NSFR) to designated significant financial institutions and reforms to enhance Australia’s competitive position in global markets.

Regulation APRA
14-Apr-2022

ASX consultation on Issuer Services: New Pricing

AFMA's submission stated its support for ASX’s review of listing pricing as appropriate given the significant changes that will accompany the CHESS replacement. The submission noted that AFMA does not involve itself in commercial matters except to highlight matters of common market interest, and as such sought clarity on what effect the proposed changes suggested by ASX modelling will have on Holder Identification Numbers (HINs) for individual investors and costs for those investors.

Regulation ASX
14-Apr-2022

AUSTRAC Proposed Guidance on Source of Funds and Source of Wealth

AFMA's submission welcomed the Draft Guidance as it would provide a useful reference point for reporting entities.The submission sought clarity on the scope of the requirements articulated in the Draft Guidance and highlighted concerns relating to the consistency of the Draft Guidance with AUSTRAC Guidance on Debanking, expectations for establishing source of Funds/Wealth and need for the Draft Guidance to acknowledge that reporting entities are required to abide by the Australian Privacy Principles in verifying the source of funds/wealth. The submission also suggested that the Draft Guidance could be enhanced through the inclusion of specific legal references to the obligations articulated in it.

Regulation AUSTRAC
04-Apr-2022

ASX consultation on the ASX Recovery Rules to allocate US settlement bank investment losses between the ASX CCPs and their clearing participants.

AFMA made a submission generally welcoming the ASX’s proposed changes to ASX Recovery Rules and Handbook based on the objective to mitigate unintended consequences for clearing participants. AFMA's comments highlighted important matters around increased transparency and fairness for ASX’s consideration before the proposals are executed. These included among other matters, the ASX At-Risk Capital Commitment, clarity on loss allocation determination and components and mitigation of wrong way risk when a settlement bank and a clearing participant are in the same group.

Regulation ASX
04-Apr-2022

Reporting of International Electronic Funds Transfer Instructions - Draft Regulatory Guide

AFMA made a submission to AUSTRAC stating its perspectives in relation to the Draft Regulatory Guide. The submission noted based on the positions adopted in the Draft Regulatory Guide, that the legal interpretations adopted by AUSTRAC maydiffer to those taken by reporting entities and thus there is a need to better understand the legal position adopted by AUSTRAC and to ensure that any guidance on reportability is based on a current legal obligation rather than the intelligence value that would be obtained through the report.  The submission seeks an approprite transition period for members to adhere to new regulatory expectations.  

Regulation AUSTRAC
24-Mar-2022

Issue Alert - Use of Bank Name in Notifications

AFMA wrote to APRA alerting it to the Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022, which if passed and made a law, contains a proposed new professional investor exemption replacing a current professional investor exemption. The current exemption under s 911A(2E) of the Corporations Act 2001, only applies in limited circumstances to persons ‘not in this jurisdiction’ and gives effect to APRA's Guidelines that  overseas banks are able to carry on a cross-border banking business in Australia without holding a banking licence from APRA or an AFS licence from ASIC. AFMA's letter sought confirmation that APRA will not take any action against an overseas bank under s 66 of the Banking Act for using or assuming its own name in any notifications to an existing or prospective client or regulator provided that fulfills conditions from the Guidelines.

Regulation APRA
25-Feb-2022

ALRC Interim Report A - Financial Services Legislation

AFMA's submission noted general support to the recommendations made in Report A based on the analysis and justifications around the problems with the Corporations Act 2001 and related financial services legislation as ‘law’. AFMA’s central concern with Report A was that the proposals could be taken forward as law reform measures in isolation which will have significant policy implications and affects other parts of the way the law works. AFMA hence noted there is a need to take the proposals forward as policy review issues.

Regulation ALRC
25-Feb-2022

2022 Foreign Investment Reforms - Exposure Draft Regulations

AFMA made a submission noting its general support for the proposed changes. The submission stated concerns in regard to the drafting of the foreign custodian corporations exemption amendment as it narrows the availability of the exemption available for foreign custodians and adds to the regulatory burden for some less sensitive types of investment, thus in conflict to the purpose of the ammendments. The submission also sought clarifications around several matters inclduing for example, moneylending exemption, unit holdings, rights issue exemption.  

Regulation Treasury
14-Feb-2022

First Assessment of the Australian Securities and Investments Commission

AFMA made a submission highlighting its support for the establishment of the Financial Regulator Assessment Authority. The submission notes that in the same way the Australian community expects regulated financial entities to meet high standards of behaviour, accountability and efficiency, so too must regulators like ASIC meet such expectations and there should be effective checks and balances in the system to ensure this outcome. 

Regulation Financial Regulator Assessment Authority
01-Feb-2022

Education Standards for Financial Advisers – Policy Paper

AFMA's submission welcomed Treasury's new proposed pathways for Financial Advisers as they greatly increase the flexibility of the system to better reflect the wide variety of roles that involve financial advice. AFMA welcomed the proposed policy that recognises the skill and knowledge of experienced advisers and recognises the tertiary qualifications from relevant study areas that will equip advisers with skills and knowledge to provide advice on financial markets products.

Regulation Treasury
01-Feb-2022

2022/23 Pre-Budget Submission

AFMA’s pre-budget submission supported the advancement of policies that attract the undertaking of mobile financial centre business from Australia. The specific recommendations included in the submission all represent opportunities to enhance the competitiveness of Australia’s financial sector and build on initiatives that have been supported by successive governments on a bipartisan basis.

Taxation Budget Policy Division, Department of the Treasury
31-Jan-2022

ASX Trade Cancellation Ranges: Proposals for Change to ETO cancellation ranges and QCR process

AFMA's submission was supportive of ASX's efforts to simplify the ETR calculation and using a single calculation across all ETO series. AFMA supported the ability for market participants to have visibility of the reference price used by ASX in their calculation when cancelling a trade in the interest of market transparency. Based on member feedback, the submission welcomed the 6-week notice period as sufficient from the implementation date as the required systems changes will be limited.

Regulation ASX
31-Jan-2022

ASX 24 Cancellation Ranges: Proposals for Change to Energy Products and QCR process

AFMA's submission supported the proposed ETR amendment for the Base Load Electricity Cap products. AFMA agreed that valid market transactions should not unintentionally fall in to the ETR cancellation range when the price for Australian Electricity Base Load Cap futures is low. This would also support efficient and liquid markets.

Regulation ASX
31-Jan-2022

AUSTRAC Industry Contribution 2021-22 Stakeholder Consultation Paper - AFMA Submission

AFMA made a submission outlining ongoing concerns with both the policy and design of the AUSTRAC Industry Contribution Model ('Model'). AFMA expressed concerns around the non-applicability of the Government’s own cost recovery guidelines to the AUSTRAC Model and noted that volatility in the Industry Contribution amount is inappropriate. AFMA supported that contributions and maximum billable payments should be determined on an economic group basis and be the same irrespective of the number of reporting entities within the economic group.

Regulation AUSTRAC
24-Jan-2022

ASIC Consultation Paper 353: Proposed Amendments to theASIC Derivative Transaction Rules (Clearing) 2015

AFMA made a joint submission with ISDA welcoming ASIC’s statement that it continues to monitor international regulatory developments to maintain overall consistency. The submission encourages ASIC to consider the potential benefits of aligning its proposed termination date ranges for OIS referencing new RFRs with those of the home jurisdictions (and other relevant jurisdictions) of the underlying RFRs. The submission also noted concerns for financial stability around implementation timing of the proposed amendments to Clearing Rules. 

Regulation ASIC
12-Jan-2022

Treasury Laws Amendment (Measures for Consultation) Bill 2021: Licensing Exemptions for Foreign Financial Service Providers

AFMA made a submission noting it welcomed the Bill as drafted and considered it sound. The submission focused on the legislative text of the Bill. AFMA mentioned primary concerns with implementation issues and queries on how ASIC will interpret the law and timelines for transition and implementation and expressed interest to understand how additional comparable jurisdictions will be added to the list, noting that these matters are important in practice. 

Regulation Treasury
10-Jan-2022

Review of the Privacy Act – Discussion Paper

AFMA's submission outlined comments on several proposals of the Review such as Personal Information, Employee record exemption, etc. noting concerns around increased complexity, seeking further clarity and recommending alternative approaches. Where extensions to the current regime are made AFMA cautioned they should be aligned with standard practices elsewhere, where those practices have proved to work well and are compatible with Australian values and policies.

Regulation Attorney-General’s Department