There’s a next wave of regulatory changes commencing early October that brokers will need to understand and take necessary actions to remain compliant.
We’d like to outline six new laws that will come into effect to expand obligations for brokers and the financial services industry. These include:
- Reference checking and information-sharing requirements – starting 1 October
- Breach reporting and the “notify, investigate and remediate” obligations – starting 1 October
- Design and distribution obligations (DDO)– starting 5 October
- Deferred sales model for add-on insurance products – starting 5 October
- Internal dispute resolution – starting 5 October
- Hawking reforms – starting 5 October
This has come as part of the government’s response to recommendations from the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry.
Australia’s leading aggregator Connective believes great preparation for the incoming laws for brokers to succeed is essential. Here are all the resources from Connective that you might find useful.
“Although the changes for brokers are not as significant as what the industry had to adapt to with best interests duty, brokers need to get ready ASAP, because these new laws are on our doorstep.
“Brokers have had to adapt to such a volume of change and disruption in the last 18 months, which has been consuming. So, we want to shine a spotlight on these latest new laws to make it as easy as possible for brokers to ensure they are compliant.”
MFAA and Connective’s responses
Additionally, Connective has been working with the Mortgage & Finance Association of Australia (MFAA) and the goal is “to push for the best outcome for the industry”. Following the industry feedback, the government will change DDO requirements for brokers. MFAA chief executive Mike Felton provided a video update back in August.
Brokers would be wise to demonstrate efforts to comply
Accordingly, the Australian Securities and Investments Commission (ASIC) said it will take a “reasonable approach” when enforcing the new laws the Government has passed. Under the current challenging environment, ASIC is well aware that the implementation of these changes all at one time will present a major challenge to industry participants.
“We therefore recognise there will be a period of transition as industry finalises implementation of additional compliance measures, and ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply.“ ASIC Chair Joe Longo said.
Regulatory Changes Rundown by Loan Market
The Loan Market Group also held a webinar to discuss the changes during which its executive director Sam White stated that aggregators should be more involved in “influencing and helping legislators in shaping their view on regulation”. Here’s a takeaway from the webinar. He believes aggregators should play a part in creating new rules and adding some structure and processes around the regulations moving forward.
Please stay tuned for more updates about the new laws in the coming weeks.