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20 6月 2023
Insight
Australia
Our "FSR GPS" podcast series explores topical and emerging issues in financial services regulation that are of strategic importance for our clients and the financial services sector more broadly.
We aim to provide guidelines, principles and strategies (i.e. the "GPS") to assist financial services providers to navigate complex, and sometimes opaque or ambiguous, legal and regulatory requirements in a constantly evolving environment.
Join us in conversation with our resident FSR experts to explore some of the complex challenges faced by the financial services industry.
Be sure to also check out our FSR Australia Notes.
Latest episode
Episode 2: Fairly Efficiently, honestly and fairly – The quest for certainty
In this episode, Partners Michael Vrisakis, Hugh Paynter and Alice Molan discuss one of the most vexed obligations under financial services law – the obligation to take all necessary steps to provide financial services, and engage in credit activities, efficiently, honestly and fairly.
Read our key takeaways
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The obligation to do all things necessary to ensure financial services and credit activities are provided or engaged in efficiently, honestly and fairly applies both to financial services licensees and to credit licensees. While the precise formulation of these statutory duties differs slightly between the two, it nevertheless imposes a relatively high bar on both.
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There is considerable over-reporting of breaches of the efficiently, honestly and fairly obligation to ASIC. It is important to bear in mind that the efficiently, honestly and fairly obligation is a standalone obligation from other technical obligations under financial services law, which requires separate assessment of breach.
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Recent case law is instructive in distilling some key principles on when there is a breach of the obligation to act efficiently, honestly and fairly. Most notably, the courts are now recognising that the standard does not require perfection and there may be scope to rectify an error before there is a breach of the efficiently, honestly and fairly obligation.
Episode 1: Once more into the Breach
In the first episode of our series, Partner Andrew Eastwood, and Senior Associates Ed Einfeld and Tamanna Islam discuss the breach reporting regime and the financial services industry’s experience with it since implementation.
Read our key takeaways
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Investigations into breaches are reportable if they last more than 30 days. Understanding when an investigation has started is key to complying with the reporting timeframe, and because there is no statutory definition of what constitutes an investigation, each organisation must determine this for itself. In our experience, industry approaches differ significantly.
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There is an enormous number of obligations, the breach of which is deemed significant and therefore automatically reportable to ASIC (notably, including the prohibition on misleading and deceptive conduct and the obligation to do all things necessary to ensure financial services are provided efficiently, honestly and fairly). But it is not every obligation. And not every error will necessarily constitute a breach.
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Our experts expect ASIC’s attention will soon shift to those licensees who appear to be under reporting matters, particularly in light of ASIC’s observation that only 6% of licensees had lodged a breach report during the time of its review.