Good afternoon, and welcome to day 558.
Today in summary: ASIC has approved an updated version of the banking code; Graeme Samuel handed his report on APRA’s capability to Treasury today; APRA has outlined its proposed approach to implementing a Hayne BEAR update; CBA head Matt Comyn announced changes to the bank’s executive team; and the government said it would defer the extension of SuperStream to self-managed superannuation fund rollovers.
-- Alex
@AlexESampson
Current banker panic level: ✅🧐🧐🤗🤑
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ASIC has approved an updated version of the Australian Banking Association's new Banking Code of Practice.
The corporate regulator first approved the code in August 2018, but since then the ABA has applied for approval for a number of changes. ASIC is assessing those changes in two stages and has approved the first stage, which includes new provisions that “put beyond doubt” that a bank will not charge fees to dead people.
It also includes ASIC’s implementation of law reforms to responsible lending for credit cards and some technical corrections.
Meanwhile, mortgage brokers this week called for a delay in the implementation of provisions for vulnerable customers under the new code. FBAA managing director Peter White told Australian Banking Daily discussions were ongoing but parties were getting closer to a workable solution. Last week the FBAA urged brokers not to sign any declarations relating to financial abuse.
Former competition regulator Graeme Samuel handed his report on APRA’s capability to The Treasury today. Jane Hume’s office said it had received the report and would “release and respond to the report in due course”. Prudential regulator APRA said it did not know when it would see the report.
The APRA Capability Review was announced by Treasurer Josh Frydenberg on February 11, days after the banking royal commission final report, with a mandate to provide a forward-looking assessment of APRA's ability to respond to an environment of growing complexity and emerging risks.
Recommendation 6.13 of Hayne’s final report advised regular capability reviews for APRA and ASIC — at least every four years, with APRA’s to be completed ASAP.
APRA has outlined its proposed approach to implementing a BEAR update on product responsibility for authorised deposit-taking institutions.
Recommendation 1.17 of the banking royal commission final report recommended that APRA determine an end-to-end product responsibility for each ADI subject to the BEAR with the aim of improving customer experience and outcomes. APRA proposes requiring ADIs to identify and register an accountable person to hold end-to-end product responsibility for each product the ADI offers to its customers.Changes to ADIs under the Banking Executive Accountability Regime include the scope of accountability, product coverage, the structure of the legal mechanism and the application of joint accountability within banks.
APRA’s letter requests feedback on the four key considerations before August 23.
CBA head Matt Comyn today announced changes to the bank’s executive team. Comyn said the retirement of Group General Counsel and Corporate Affairs head Anna Lenahan on June 30 had given the bank the opportunity to “review the responsibilities of the role”, deciding to separate it.
Following an “extensive domestic and global search”, Priscilla Sims Brown has been appointed to the role of Group Executive Marketing and Corporate Affairs, effective August 1.
The government today announced it would go ahead with the deferral of the extension of SuperStream to self-managed superannuation fund rollovers from November 30 this year to March 31, 2021.
The extension of SuperStream to SMSF rollovers allows fund members to initiate and receive rollovers electronically between an APRA fund and their SMSF.
Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume said the changes would streamline the way users interacted with the superannuation system, as well as reduce costs and improve the efficiency of the system.
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Today’s burn prize: Alium Capital partner Rajeev Gupta
“[The valuations on Australian neobanks] are delusional because the response to any serious competition from the big four is going to be fierce.”
Gupta said the business model of emerging digital-only banks was not as bright and shiny as everyone thought.
The Commentariat
Despite a strained relationship between CBA and its mortgage brokers, CEO Matt Comyn has waved an olive branch by offering bigger discounts to borrowers on loans offered via the broker channel, writes Joyce Moullakis in the The Australian.
“Many brokers remain wary of CBA and its motives in the sector and several have trawled through Comyn’s royal commission testimony to question some of his and the bank’s statements. Emails between Comyn and then CBA boss Ian Narev in 2017, tendered at the royal commission, showed the former proposing to move to a flat fee for brokers to reduce the bank’s reliance on them, particularly where it had branches.”
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