Federal Government unveils finance rules grid
Inspired by a similar UK initiative, the grid will be designed to help industry in meeting its obligations and regulators in avoiding duplication.
The Federal Government has announced it will develop a regulatory initiatives grid for the financial sector. Based on a similar program in the UK, the grid will lay out the regulatory pipeline to keep industry stakeholders abreast of relevant reforms.
Treasurer Jim Chalmers expects the grid will make it easier and more affordable for affected entities to comply with financial regulation.
“The grid will give financial services providers – particularly medium-sized and smaller players – clear visibility of regulation that might impact their businesses,” said Chalmers.
Updated twice-yearly, the grid will outline regulatory initiatives on a rolling, 24-month forward basis, and will apply to regulations across banking, credit, insurance, superannuation, investment, payments, and capital markets.
The seventh edition of the UK’s version of the grid went live late last year and it included 125 regulatory items, 33 of which were added in that edition.
Anna Bligh, CEO of the Australian Banking Association last year said the UK’s grid had proven “instrumental in driving productivity gains and fostering innovation.”
“Australia should adopt this proven model to allow efficient sequencing of reforms, enhanced coordination between our regulators, and accelerated productivity growth,” she added.
As suggested by Bligh, regulators too are expected to benefit from the grid. The regulatory initiatives of ASIC, APRA, ACCC, the RBA, and the ATO are among those to be reflected in the grid.
Chalmers said it will help them to “avoid duplication, build shared strategic priorities, and focus on how to best implement reforms.”
The Financial Planning Association, in its submission to the ALRC’s review of corporations and financial services regulation singled out the challenges created by regulatory duplication.
“Financial planers are faced with regulatory duplication created by both the structure of the legislative hierarchy and the obligations contained in the financial advice-related provisions,” said FPA.
“This significantly and negatively impacts the affordability and accessibility of financial advice for consumers.”
In its review, the ALRC quoted Graeme Cooper as saying Australia’s tax system suffers from excessive “regime duplication and overlap” which he attributed to legislative accretion and a failure to get rid of “legislative detritus” or unnecessary, sometimes antiquated provisions.
Cooper referred to overlapping and duplicated regimes as “perhaps the most annoying and unnecessary design defect” in legislation.
According to the ALRC, the Corporations Act contains 92 offences dealing with the defective disclosure of false, misleading, or deceptive conduct.
Presumably, this falls well short of the ALRC’s formulation that corporate misconduct legislation needs to balance the twin, opposite demands of “sufficient specificity” and the challenges of excessive specificity.
