Govt announces CSLR legislation draft exposure

16 July 2021
| By Chris Dastoor |
image
image
expand image

The Federal Government has released exposure draft legislation to implement the Royal Commission recommendations of the compensation scheme of last resort (CSLR) and the financial accountability regime. 

The CSLR was meant to be implemented at the end of the financial year,  but was delayed for budgetary reasons, but the regulation was expected to be passed and enacted between Q421 and Q122. 

The Minister for superannuation, financial services and the digital economy, Senator Jane Hume, said: “The establishment of the Compensation Scheme of Last Resort will support ongoing confidence in the financial system’s dispute resolution framework by facilitating the payment of compensation to eligible consumers who have received a determination for compensation from the Australian Financial Complaints Authority (AFCA) which remains unpaid”. 

The financial accountability regime would extend the banking executive accountability regime to all Australian Prudential Regulation Authority (APRA) regulated entities and would be jointly administered by APRA and the Australian Securities and Investments Commission (ASIC). 

“The financial accountability regime imposes a strengthened responsibility and accountability framework within financial institutions, recognising that decisions taken by directors and the most senior executives of financial institutions are significant for millions of Australians and the Australian economy,” Hume said. 

Grandfathered Commissions 

The Government also released the ASIC report into industry’s transition away from grandfathered conflicted remuneration. 

The Government introduced legislation to remove grandfathering arrangements for conflicted remuneration from 1 January, 2021, and to require product issuers to rebate these amounts to consumers. 

Following a direction from the Government, ASIC’s investigations found that financial product issuers had fully terminated 96% of grandfathered conflicted remuneration arrangements by 31 December, 2020, and approximately $266.7 million had already been rebated to consumers over the period 1 July, 2019, to 31 December, 2020. 

A further $24.4 million was estimated to be rebated to consumers during 2021. 

Submissions on the legislation will be open until 13 August.  

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 18 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 1 day ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 16 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

1 day 19 hours ago