Day 515: 'Somewhat underwhelmed'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 515.
Today in summary: The first day of ASIC’s annual forum in Sydney saw presenters bleat about accountability; FASEA has not yet approved any graduate courses to meet new minimum education standards for financial advisers; APRA has granted French multinational investment bank and financial services company Societe Generale a licence to operate; CBA chief executive Matt Comyn has been quieting reignited rumours of 10,000 staff cuts; and non-bank lender Resimac says it will stop lending to any unit or apartment with dicey cladding.
-- Alex
@AlexESampson
Current banker panic level: 🤕👩🎓🤐🤫🥶
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The UK’s financial watchdog boss Andrew Bailey has opened up on his organisation’s use of its product intervention power, describing it as a measure of “last resort”. Speaking at ASIC’s annual forum in Sydney, Bailey said the UK Financial Conduct Authority had used the power “sparingly” over the past five years since it had come into effect. Bailey said, in the UK and European context, the power had been useful in dealing with products such as contract for difference and binary options that consumers found “too challenging to deal with”.
Bailey said another feature of instruments that could be dealt with via a product intervention power were those “marketed over the internet”. He said the power was only used where “market consistent” measures failed.
“It’s a tool that we use as a last resort, or beyond that resort.”
His comments come after federal parliament earlier this month granted ASIC new product intervention powers.
The first day of ASIC’s annual forum in Sydney also saw chair James Shipton again clarify the regulator’s why not litigate" strategy, saying it did not mean “litigate first” or “investigate everything”. APRA chair Wayne Byres said banks should share cyber defences for the common good. RBA assistant governor Michele Bullock discussed the central bank’s New Payments Platform, which went live in February 2018 and is slowly building volume, allowing instant payments to be made and received 24/7. In April, 16 million transactions were processed through the NPP amounting to A$13 billion. However, the “somewhat underwhelmed” by the progress of some of the major banks, which had been “much slower” to provide their customers with fast payment services.
Meanwhile, the corporate watchdog has dropped an investigation into beleaguered fund manager Blue Sky. ASIC had alleged Blue Sky may have breached the Corporations Act. Class-action law firms, including Piper Alderman and Shine Lawyers, said the regulator’s step did not kill off any shareholder lawsuits. No lawsuit has yet been filed.
The Financial Adviser Standards and Ethics Authority has not yet approved any graduate diplomas or bridging courses to meet new minimum education standards for financial advisers. From January entrants to the sector will have to meet new skill and performance standards and from January 2024 existing advisers will have to up skill. FASEA clarified that it was yet to make any approvals, following comments from the Ethics Centre yesterday that it was launching a university level course in ethics that it planned to get accredited.
FASEA yesterday advised it had received 14 applications for accreditation from graduate diploma providers and 11 applications from bridging course providers by the cut off for applications on April 12. FASEA will take up to eight weeks from the closing date to assess and approve the applications.
From today financial advisers can notify their intention to sit the first of FASEA's exams (open until May 31). FASEA has released guidance for the exam, which includes detail on the curriculum, a reading list and practice questions. The exams will be held in nine locations: Sydney, Canberra, Brisbane, Townsville, Melbourne, Adelaide, Perth, Darwin and Hobart.
APRA has granted French multinational investment bank and financial services company Societe Generale a licence to operate as a foreign authorised deposit-taking institution (ADI) in Australia. Societe Generale first launched in Australia in 1981 and and previously operated as an ADI but gave up its banking license six years ago and serviced its Australian clients from Hong Kong.
The bank’s head of global finance for Asia Pacific, Stephen Swift, said limits to operating in Australia without a licence became a constraint and the firm had “outgrown the model”.
Commonwealth Bank chief executive Matt Comyn has been quieting reignited rumours of 10,000 staff cuts. The reports triggered a meeting with the Financial Services Union, as ordered by the Fair Work Ombudsman. The FSU called on CBA to confirm whether the reports were true when they first surfaced last month.
In April The Australian revealed a “secret plan” for CBA to cut jobs to save about A$2 billion, saying the bank wanted to keep the move under wraps until after the May 18 election. Also circulating are rumours that ANZ will cut 800 jobs in the next three years.
From next week non-bank lender Resimac, which has a loan book of about A$13 billion, will stop lending to any unit or apartment with dicey cladding.
The AFR is reporting that such lending policies are likely to increase pressure on state governments to publish lists of buildings in major cities which have non-compliant external cladding. Under current rules, which vary by state, vendors must declare any issues with cladding in sale documents.
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Today’s literal burn prize: Prime Minister Scott Morrison
“If Australians give me that opportunity on Saturday, they can be absolutely assured that I will burn for you every day, every single day, so you can achieve your ambitions, your aspirations, your desires.”
Morrison used his final major speech before election to promise he “will burn” to deliver Australians' aspirations if re-elected. At the National Press Club in Canberra Morrison argued Australians were not looking for the big-spending, big-taxing programs promised by Labor, and would instead prefer a strong economy.
The Commentariat
There's a A$7.5 billion reason why the RBA is stalling on rate cuts, writes Elizabeth Knight in the SMH.
“CBA analysis points to last month’s federal budget, which has promised a cash splash equivalent to that gifted by Kevin Rudd during the GFC. And much like during the 2009 Rudd stimulus, households will receive a lump sum. According to the author of the CBA report, Gareth Aird, the upcoming tax bonus that many households are set to receive has largely flown under the radar, and thus hasn’t yet fed into consumer confidence.”
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