The Financial Review is looking at the ways in which regulators are using their powers to regulate the way in which financial services are being delivered.
The article investigates how regulators are trying to prevent banks from telling customers what they can’t and can’t be told.
Financial Services Legislation Amendment (Disclosure of Information to Customers) Bill 2014The Financial Services Bill 2014 was introduced in February by Senator Penny Wong, who was Labor’s finance spokesman for the last four years.
The bill allows financial institutions to disclose information about their customers to the Australian Securities and Investments Commission, which then has to inform the ACCC.
The information is not required to be provided by the company itself, but must be provided to the commission by the banks.
The ACCC’s oversight of the banks is limited to issuing warning notices to consumers and requiring them to file a disclosure of information with the regulator.
Under the bill, information from banks and other financial institutions is considered in the context of “financial services” rather than “finance”.
For example, a bank could disclose to the ACCCs financial services and risk analysis reports, but not to its other services, such as trading and lending.
The regulator can only request information from a financial institution under this new regime if the financial institution has a “clear interest” in making the disclosure, or “a compelling reason to do so”.
The regulator has said it is not able to request information if the disclosure would “substantially” interfere with the operations of the financial institutions.
It is understood that regulators have asked banks to make disclosure about their financial activities to the ACCC but have been unable to get the banks to comply.
The Financial Review understands the Australian Financial Market Operator (AFMA) is currently reviewing the bill and is looking into the potential impact of the disclosure on the markets.
The regulator has previously said it was “confident” the disclosure will not significantly interfere with financial markets.
The financial regulator has not yet made a decision on whether to bring the bill before parliament.
However, the ACT Government’s own consultation document obtained by the Financial Review shows that the regulator has also received some concern about the bill.
In a response to a written submission, the AFMA said it had received “quite a few complaints about the proposed disclosure regime” and that it was working on a consultation paper “in relation to the proposed legislation”.
The Department of Industry and Innovation has also said that it would like to see the legislation amended to include a “direct disclosure” requirement, but has not given any indication of whether it is considering the proposal.
Topics:finance,financial-services,law-crime-and-justice,consumer-protection,consumer,australiaFirst posted April 19, 2019 18:25:03Contact Nicola MeekMore stories from New South Wales