Archive: February 2022

1
Europe: Has the New CSDR Penalties Regime Escaped Your Notice?
2
Australia: Financial Adviser News
3
Australia: A Proxy Advice Regulation Rollercoaster
4
Australia: What do changes to Unfair Contract Terms (UCT) laws in Australia mean for financial services?
5
United States: Reporting of U.S. Ownership on TIC form SHC Due by March

Europe: Has the New CSDR Penalties Regime Escaped Your Notice?

By Joanna Treacy

The Central Securities Depositaries Regulation (CSDR) originally entered into force in the EU on 17 September 2014, aiming to harmonise timing and standards of conduct in the EEA’s securities settlement industry. It introduced measures for the authorisation and regulation of EEA central securities depositaries (CSDs).

While much of the regulation focuses on prudential, organisational and business standards of CSDs, some of its requirements directly affect trading entities that settle trades on EEA CSDs. These include measures to address and prevent settlement fails and improve settlement discipline, which became effective on 1 February 2022.

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Australia: Financial Adviser News

By: Jim Bulling

Review of the Quality of Financial Advice

In December 2021, the Australian Treasury published the Draft Terms of Reference to the Review of the Quality of Financial Advice (Review). The Review takes up a number of recommendations of the Hayne Royal Commission and seeks to achieve the goal of providing retail investors access to high quality, affordable, and accessible financial advice. Amongst other areas, the Review will investigate whether regulatory compliance obligations can be streamlined and simplified to reduce cost and remove duplication. Additionally, the Review will consider whether the safe harbour provision for the duty of financial advice providers to act in the best interests of their clients pursuant to section 961B of the Corporations Act 2001 (Cth) is in line with Commissioner Hayne’s recommendation that “unless there is a clear justification for retaining that provision, it should be repealed.”

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Australia: A Proxy Advice Regulation Rollercoaster

By: Jim Bulling and Phoebe Naylor

Controversial regulations seeking to govern the provision of proxy advice services were introduced by the Government in late December 2021. The Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 (the Regulations) introduced a definition of “proxy advice” and prescribed it as a financial service. In summary, proxy advice was defined as an offer of voting recommendations to specified entities, in relation to the exercise of their voting rights attached to securities or interests.

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Australia: What do changes to Unfair Contract Terms (UCT) laws in Australia mean for financial services?

By: Jim Bulling

Expanding both the scope of the UCT regime and regulator enforcement powers

On Wednesday 9 February 2022 a bill was introduced to Parliament which seeks to amend the Australian Consumer Law and the Australian Securities and Investments Commission Act (ASIC Act) to extend the Unfair Contract Terms Regime (UCT Regime).

Section 12BF of the ASIC Act currently prohibits unfair terms in standard form consumer and small business contracts as they relate to financial products and financial services.

Under the proposed changes, the UCT regime for small businesses under the ASIC Act will apply where the upfront price of the standard form contract (price threshold) does not exceed AU$5 million and one party to the contract is a business that either employs fewer than 100 people (employee threshold) or has an annual turnover of less than AU$10 million. These changes substantially expand the current law where the price threshold is AU$300,000 (or AU$1 million in a multiyear contract) and the employee threshold is 20 people. As such, the changes are likely to cause the UCT regime to apply to many more financial services business to business contracts.

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United States: Reporting of U.S. Ownership on TIC form SHC Due by March

By: Todd Gibson

It’s time again for the U.S. Department of the Treasury’s mandatory five-year benchmark survey of the ownership of foreign securities by U.S. residents. All U.S. custodians and end-investors that exceed the applicable reporting threshold of reportable foreign must complete Form SHC and file it electronically or by email with the Federal Reserve Bank of New York no later than 4 March 2022.

Interested in learning more? Our recent alert provides details about who is required to report, the structure and purpose of the form, which securities are reportable, the penalties for noncompliance, and the confidentiality of data. The alert also provides a links to the Federal Register notice announcing the survey and instructions for Form SHC on the Department of Treasury website.

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