September 23, 2023

Volume XIII, Number 266


September 22, 2023

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September 21, 2023

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Australian Regulatory Update – 21 November 2022

1. “Finfluencers” pivot following warnings from ASIC and become authorised to provide general financial product advice

Earlier this year, ASIC put social media “finfluencers” on notice after warning that they could face imprisonment and hefty fines if they do not obtain an AFSL or do not stop promoting financial products online.

In response to ASICs warnings, many “finfluencers” are now signing up to the AFSL regime to operate with confidence and avoid penalties from ASIC. It appears that “finfluencers” are partnering with financial planning firms to become authorised representatives allowing them to provide general financial advice on their platforms.

Just last week another popular “finfluencer” Natasha Etschmann (@tashinvests) has become authorised to provide general financial product advice under an arrangement with a financial planning firm. 

By taking these steps, “finfluencers” will be able to continue posting on their social media accounts to their followings and provide general financial product advice to anyone who accesses their profiles whilst being accountable to ASIC. 

2. APRA proposes enhanced obligations for trustees

APRA has released a discussion paper proposing to replace the existing Prudential Standard SPS 114 Operational Risk Financial Requirement (SPS 114) with enhanced obligations for trustees.

The proposed changes will mean that RSE licensees must guarantee they have access to equitably sourced financial resources which spread the impact fairly across different cohorts of members to respond to, and rectify, the impacts of operational risks.

APRA intends to replace SPS114 with a two-tiered model consisting of:

  • a baseline component, to ensure ready access to financial resources to fund the recovery from adverse financial risks or member exit activity; and

  • an operational risk component, to spread the impact of operational risk fairly across different cohorts of members. The operational risk component will largely reflect the approach of the existing operational risk financial requirement but with greater flexibility.

The proposals are a response to heightened risks in the external operating environment, such as pandemics, cyber risk and third-party service provider risks.

Anabelle Weinberg also contributed to this article.

Copyright 2023 K & L GatesNational Law Review, Volume XII, Number 327

About this Author

Jim Bulling, KL Gates, financial services lawyer, funds management attorney

Mr. Bulling's practise focuses on banking and financial services and he acts for a range of entities in the financial services and funds management industry. His clients include Australian and international investment managers, banks, trustees of superannuation funds, wholesale and retail investment trusts, funds management companies and financial planning groups.

His main areas of focus include banking and financial product disclosure issues, financial services compliance issues, financial product distribution issues and superannuation and...