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An overview of the Nature Repair Market
In our previous articles, we highlighted that under Stage 1 of the nature reforms detailed in the Nature Positive Plan, the nature repair market was established.
Australia | Publication | December 2021
This article was co-authored with Daniel Corban.
As we head towards the end of the year, November has been another eventful month for the insurance, managed funds and superannuation sectors. Most notably, the Australian Law Reform Commission (ALRC) released its first interim report on financial services legislation in Australia.
APRA and ASIC continue to be active. APRA released its finalised prudential frameworks for insurance in superannuation and managing the financial risks associated with climate change. ASIC has also extended the deadline for end of year financial reporting for unlisted entities.
November also saw the regulators release various consultation papers, draft guidance and FAQs. Of particular interest was ASIC’s release of consultation papers on consumer remediation for customers owed money, and proposed extension of class order relief from the requirement for general insurers to issue a product disclosure statement (PDS) when providing a quote.
On 30 November 2021, the ALRC released their first interim report on financial services legislation in Australia (Interim Report A). The ALRC has been tasked with considering whether the Corporations Act 2001 (Cth) (Corporations Act) and Corporations Regulations 2001 (Cth) can be simplified and rationalised, particularly in relation to the following three major areas:
Interim Report A provides 13 initial recommendations on the use, consistency and design of definitions in corporations and financial services legislation.
Interim Report A also includes 16 proposals and 8 questions in relation to:
The ALRC is inviting submissions on these proposals and questions. Submissions are open until 25 February 2022 and will form part of the ALRC’s further interim reports as well as its final report to the Attorney-General, which the ALRC intends to provide by 30 November 2023.
A link to Interim Report A can be found here and a summary here.
On 12 November 2021, APRA released its finalised Prudential Standard SPS 250 (SPS 250) and accompanying Prudential Practice Guide SPG 250 Insurance in Superannuation (SPG 250).
SPS 250 and SPG 250 are aimed at ensuring better member outcomes through updated requirements for trustees to select, manage and monitor members’ insurance arrangements.
In summary:
The updated SPS 250 will commence on 1 July 2022. In preparation, APRA encourages trustees to reassess their insurance arrangements and strategy, risk and compliance frameworks.
A link to the APRA media release can be found here. SPS 250 can be found here and SPG 250 here.
On 26 November 2021, APRA published its final prudential practice guide on managing climate change financial risks.
Prudential Practice Guide CPG 229 Climate Change Financial Risks (CPG 229) is designed to assist APRA-regulated entities manage the financial risks of climate change as well as utilise opportunities within their existing risk management and governance practices. Notably, APRA has stated that CPG 229 does not impose any additional regulatory requirements or obligations.
CPG 229 is intended to provide institutions with flexibility to adopt the guide as appropriate for their size, customer base and business strategy.
In summary, CPG 229 covers ASIC’s views of sound practice in relation to areas such as:
APRA is encouraging entities to begin implementing CPG 229 to enhance their management of the financial risks associated with climate change.
A link to the ASIC media release can be found here and CPG 229 here.
On 30 November 2021, ASIC announced it will extend the deadline for unlisted entities to lodge financial reports by one month for balance dates from 24 December 2021 to 7 January 2022 (inclusive).
The extended deadlines are intended to relieve pressure on audit resources and provide sufficient time for completing the audit process in light of the challenges presented by the COVID-19 pandemic.
In summary, for entities who rely on the extended deadlines:
At the time of writing, this reporting relief for unlisted entities is expected to be formalised by way of instrument shortly.
ASIC will continue to monitor how market conditions and COVID-19 related developments are affecting financial reporting and audit obligations for balance dates after 7 January 2022, but there is no indication at this stage that further extensions will be granted.
ASIC will consider relief for other entities and balance dates outside of the above dates on a case-by-case basis.
A more detailed explanation of the relief provisions can be found in the ASIC media release here.
On 18 November 2021, ASIC released Consultation Paper 351 Superannuation forecasts: Update to relief and guidance (CP 351), which sets out ASIC’s proposed updates to relief for, and guidance on, superannuation forecasting tools.
Entities currently providing superannuation calculators and retirement estimates may be granted relief from certain licensing and disclosure requirements associated with providing personal financial advice under ASIC (Generic Calculators) Instrument 2016/207 (for superannuation calculators) and ASIC Class Order [CO 11/1227] (for retirement estimates).
In summary, CP 351 outlines ASIC’s proposal to:
ASIC is inviting feedback on the proposed updates, with submissions open until 28 January 2022. ASIC then intends to publish its updated class order relief and guidance before ASIC Class Order [CO 11/1227] automatically repeals on 1 April 2022.
A link to the ASIC media release can be found here and CP 351 here.
On 17 November 2021, ASIC released Consultation Paper 350 Consumer remediation: Further consultation (CP 350) for consultation. CP 350 sets out draft guidance on the manner in which licensees should conduct remediations to return money owed to customers.
The draft guidance allows licensees to tailor the guidance to the circumstances of their particular remediation and reflects feedback received from ASIC’s earlier consultation under Consultation Paper 335 Consumer remediation: Update to RG 256.
Consultation is open until 5pm on 11 February 2022. Comments and submissions should be sent to remediation@asic.gov.au.
A link to the ASIC media release can be found here and CP 350 here.
On 15 November 2021, ASIC released Consultation Paper 349 Remaking ASIC class order on PDS requirements where a general insurance quote is given: [CO 11/842] (CP 349) for consultation.
ASIC Class Order [CO 11/842] (CO 11/842) grants relief from the requirement to provide a PDS when providing a quote over the telephone for a general insurance product, provided the call is not unsolicited. CP 349 proposes to remake CO 11/842, which will otherwise automatically repeal on 1 April 2022.
Submissions on CP 349 are open until 17 December 2021 and should be sent to co11.842@asic.gov.au. Specifically, ASIC is seeking submissions on whether:
A link to the ASIC media release can be found here and CP 349 here.
On 11 November 2021, ASIC published its 2020-21 Cost Recovery Implementation Statement (CRIS). The CRIS sets out the estimated levies ASIC will recover from each regulated industry sector and subsector for the cost of undertaking its regulatory activities.
In summary, the CRIS includes:
In light of challenges faced by businesses due to the COVID-19 pandemic, ASIC will continue to consider applications for exemptions from the requirement to pay levies on a case-by-case basis.
A link to the ASIC media release can be found here.
On 25 November 2021, APRA released its quarterly life insurance performance statistics for the September 2021 quarter. The statistics provide industry aggregate summaries of financial performance, financial position, capital adequacy and key financial ratios.
Of note:
A link to the APRA media release can be found here.
On 25 November 2021, APRA released its quarterly general insurance performance statistics for the September 2021 quarter. The statistics provide industry aggregate summaries of financial performance, financial position, capital adequacy and key financial ratios, as well as statistics for particular business classes and a breakdown of operating income and expenses.
Of note:
A link to the APRA media release can be found here.
On 24 November 2021, APRA released its quarterly private health insurance statistics for the September 2021 quarter. The statistics provide industry aggregate summaries of key financial and membership statistics for the private health insurance industry.
Of note:
A link to the APRA media release can be found here.
On 23 November 2021, APRA released its quarterly superannuation performance statistics for the September 2021 quarter.
Of note:
A link to the APRA media release can be found here.
On 19 November 2021, APRA issued a discussion paper seeking feedback from superannuation trustees and other relevant industry stakeholders on their approaches for maintaining the necessary financial resilience to protect members’ best financial interests.
In particular, APRA is seeking feedback on the following (including their adaption over time):
Submissions on the issues covered in the discussion paper are open until 11 March 2022. Submissions should be sent to superannuation.policy@apra.gov.au.
A link to the APRA media release can be found here and the discussion paper here.
On 11 November 2021, APRA released its framework for the use of macroprudential policy measures to promote the stability of Australia’s financial system. The framework is designed to mitigate risks at a system-wide level across the entire financial system.
A link to the APRA media release can be found here and information paper containing the framework here.
APRA is urging superannuation members to more actively engage with their superannuation to maximise their retirement futures.
This call follows the release of the results from the first annual performance test of MySuper products on 31 August this year. Of the 76 MySuper products assessed, 13 failed the performance test and were required to notify members of the result.
From the one million accounts in the failed MySuper products, fewer than 68,000 or 7 per cent of the total failed accounts have been closed.
APRA will also release its first Choice Product Heatmap next month. For members with their savings in choice products, this will allow comparisons to be drawn across products, as well as against MySuper products.
On 4 November 2021, APRA published further additional FAQs for RSE licensees to provide guidance on meeting the reporting standards for Phase 1 of the Superannuation Data Transformation project.
APRA also updated its FAQs to clarify reporting due dates and the reporting expectations for pooled superannuation trusts.
A link to the APRA media release can be found here. The FAQs are available on APRA’s website and can be found here.
On 3 November 2021, APRA published two new FAQs in relation to the Your Future, Your Super performance test.
Specifically, the new FAQs provide:
A link to the APRA media release can be found here. The FAQs are available on APRA’s website and can be found here.
Publication
In our previous articles, we highlighted that under Stage 1 of the nature reforms detailed in the Nature Positive Plan, the nature repair market was established.
Publication
In this article we explore the development of the human right to food under international law, and how climate change and biodiversity loss contribute to existing issues around global food insecurity, including the implications for First Nations peoples. We will also discuss the role of the private sector in protecting and improving secure access to healthy and nourishing food and how pro bono legal services can assist.
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