Financial Services Snapshots

Financial Advice

ASIC proposes to remake three financial advice-related legislative instruments

On 15 May 2025, ASIC released its proposal to remake three legislative instruments in relation to financial advice into a single instrument and extend the relief for a further five years. The legislative instruments are scheduled to sunset on 1 October 2025.

These legislative instruments are:

• ASIC Corporations (Advertising by Product Issuers) Instrument 2015/539;
• ASIC Corporations (General Advice Warning) Instrument 2015/540; and
• ASIC Corporations (Financial Services Guides) Instrument 2015/541

ASIC have assessed that each operate effectively and continue to form a necessary and useful part of the legislative framework. The content of these instruments will largely remain unchanged.

ASIC is inviting feedback on the proposal which will close on 12 June 2025.

See: Media Release; Instrument 2015/539; Instrument 2015/540; Instrument 2015/541

Banking

AFCA opens consultation on rule changes to expand jurisdiction over receiving banks in scams

On 19 May 2025, AFCA opened consultation on the proposed changes to its rules (AFCA Rules), with a key focus on expanding its jurisdiction to include the conduct of receiving banks in scam complaints. These amendments seek to improve the effectiveness and efficiency of complaint handling, improve transparency and lift industry standards in relation to scams.

These changes to the AFCA Rules involve:

• consideration of a receiving bank in a scam transaction;
• the ability for AFCA to name financial firms who do not comply with determinations;
• require the use of appropriate communication channels by paid representatives;
• dealing with paid representative who are not AFCA members; and
• removal of AFCA's legacy rules section.

The consultation will close on 13 June 2025.

See: Media Release

Insurance

ASIC proposes to remake incidental retail cover legislative instrument

On 16 May 2025, ASIC released its proposal to remake a legislative instrument that exempts insurers and brokers from certain retail client obligations, specifically, when incidental retail cover is provided in business insurance contracts. The ASIC Corporations (Incidental Retail Cover) Instrument 2022/716 (Instrument), which exempts insurers and brokers from certain client obligations, is scheduled to end on 16 August 2025.

ASIC granted the relief to reduce regulatory burden and provide certainty for industry that the retail client obligations will not apply to business insurance products to prevent retail client compliance costs. ASIC proposes to remake the instrument for a period of five years and continue to monitor it appropriateness considering feedback from relevant stakeholders.

The stakeholder opportunity for feedback will close on 16 June 2025.

See: Media Release; Instrument 2022/716

Superannuation

AFCA releases updated approaches to support fairer superannuation outcomes

On 16 May 2025, AFCA published updated approaches to three key superannuation topics. These topics are in response to stakeholder feedback and clarification of AFCA's approach on a range of complex matters, including:

• delayed insurance claims in superannuation;
• section 29(6) and (7) of the Insurance Contracts Act; and
• superannuation death benefit complaints

While each provides clarity around AFCA's decision-making process, the revised approach to superannuation death benefit complaints also includes important guidance for trustees in cases involving family violence.

AFCA welcomes stakeholder consultation to help create more predictable an efficient complaint resolution processes to ultimately reduce consumer harm and benefit all parties who rely on AFCA. 

See: Media Release; Consultations

AML/CTF

AUSTRAC's Fintel Alliance to expand after partnerships prove essential to fight financial crime

On 13 May 2025, AUSTRAC published an article setting out AUSTRAC's intention to expand the Fintell Alliance intelligence partnership (Partnership). The Partnership is a leading public-private partnership where banks, members and law enforcement work together and share data in real time to target serious crime. The Partnership allows members to pool data and identify criminal patterns that were previously undetectable.

AUSTRAC is expanding by increasing staff, enhancing its data analytics capabilities, and preparing to include additional regulated entities (tranche 2 industries). This expansion will foster stronger partnerships between industry and government, enabling more innovative intelligence solutions and more responsive regulation. 

See: Media Release

Other

ASIC announces financial reporting and audit focus areas for FY 2025-26

On 19 May 2025, ASIC published its financial reporting and audit focus areas for the 2025-26 financial year and highlighted the progress of its ongoing financial reporting and audit surveillance programs. ASIC will continue to focus on areas where judgement in the preparation of financial report is required considering recent market volatility. This includes:

• revenue recognition;
• asset valuation; and
• estimation of provisions

ASIC will continue to review audit files where a change has been made to financial information or where concerns that a financial report may have a risk or a material misstatement. 

ASIC now monitors compliance from financial reports from grandfathered entities. Some have not lodged financial reports since the exemption was lifted in 2022, ASIC will follow up with the company, and if necessary, take appropriate regulatory action.

Sustainability reporting in accordance with AASB S2 Climate-related disclosure will be mandatory for Group 1 entities with financial years commencing on or after 1 January 2025 who:

• are required to prepare an annual report under chapter 2M of the Corporations Act;
• meet certain sustainability reporting thresholds; and
• have not obtained sustainability reporting relief from ASIC

ASIC will review 31 December 2025 sustainability reports as part of the 2025-26 program and will share observations with the market and take a proportionate and pragmatic approach to supervision and enforcement as the sustainability requirements are phased in.

ASIC has updated Information Sheet 284 Public companies to include a consolidated entity disclosure statement in their annual financial report (INFO 284), to reflect the recent legislative amendments that clarify the tax residency disclosure requirements where entities are a resident in more than one jurisdiction. This is relevant to all public companies and applies to all annual financial reports for financial years commencing on or after 1 July 2024.

See: Media Release; INFO 284

Authors: Narelle Smythe, Partner; Samantha Carroll, Partner; Lisa Simmons, Partner; Rehana Box, Partner; Con Tzerefos, Partner; Scott Charaneka, Partner; Hannah Glass, Special Counsel; Geena Davies, Senior Associate; Greg Patton, Senior Associate; Nicole Mazurek, Senior Associate; Kim Yen Nguyen, Senior Associate; Nicky Thiyavutikan, Senior Associate; Justin Ho, Senior Associate; Holly Marchant, Senior Associate and Nicholas Dennis, Senior Associate.