Financial Services Snapshots

Financial Markets

ASIC issues sustainability reporting regulatory guide

On 31 March 2025, ASIC published Regulatory Guide 280 Sustainability Reporting (RG 280) which provides sustainability report guidance containing climate-related financial information under Chapter 2M of the Corporations Act 2001.

In response to the feedback received from key stakeholders on the draft RG 280 last year, ASIC have

• added sections to RG 280 on climate scenario analysis and disclosing scope 3 greenhouse gas emission;
• included more specific guidance for directors of reporting entities;
• included additional guidance on applying the sustainability reporting thresholds;
• revised their position on labelling of sustainability-related information in sustainability reports; and
• updated guidance on disclosing sustainability-related financial information outside of the sustainability report.

ASIC will supervise the enforcement of these requirements by:

• considering how to support reporting entities through guidance and continue to monitor practices;
• engaging with reporting entities to understand the basis of disclosures in sustainability reports, where a statement in a sustainability report is incorrect or misleading in any way. If concerns remain, reporting entities will be provided with an opportunity to make changes or exercise our new directions power; and
• considering the commencement of enforcement investigations where misconduct of a serious or reckless natureis identified, or where a reporting entity fails to prepare a sustainability report required under the Corporations Act.

See: Media Release; RG 280

RBA and ASIC issues letter to ASX on CHESS concerns

On 31 March 2025, the RBA and ASIC released a joint letter to ASX, expressing their concerns about operational incidents regarding CHESS batch settlement failure and its ability to affect the reliability of the CHESS system in the Australian equities market. This follows a CHESS batch settlement failure on 20 December 2024.

In response, the RBA has reassessed the compliance of ASX Clear Pty Limited and ASX Settlement Pty Ltd with its Financial Stability Standards, downgrading their "Operational Risk" standard rating from partly observed to not observed. A rating of not observed indicates a serious issue of concern that requires immediate action.

ASIC has directed ASX to engage an expert approved by ASIC to undertake a technical review of CHESS. This review aims to enhance confidence in the systems stability and operational resilience.
The regulators have warned that if the issues aren’t immediately addressed, further regulatory action will be pursued. This may include the use of the regulators' new powers under reforms to modernise the regulatory framework for Financial Market Infrastructure, which came into effect in September 2024.

See: Media Release; Letter

ASIC allows instrument for business introduction and matching services relief to expire

On 28 March 2025, ASIC announced that from 1 April 2025, the ASIC Corporations (Business Introduction Services) Instrument 2022/805 (Instrument) will expire. The Instrument provided conditional relief from the fundraising, financial product disclosure, hawking and advertising requirements in the Corporations Act that would apply to a person making offers through a business introduction service of interests in a managed investment scheme.

The Instrument previously required persons to lodge a notice of reliance upon the relief provided, however, since 1 October 2022, there has been minimal reliance on the instrument to raise funds for registered managed investment schemes.

On 13 January 2025, ASIC invited feedback on whether the Instrument should extend the relief period in relation to managed investment schemes and reinstate previous relief from Chapter 6D of the act in relation to securities, other than debentures.

ASIC received two submission in which neither detailed relief to be extended for a further period. Additionally, the arguments in favour of reinstating the relief from Chapter 6D of the Act did not outweigh the need for consumer protections.

See: Media Release

ASIC remakes relief instrument for 31-day notice term deposits

On 28 March 2025, ASIC issued a notice that it had remade a legislative instrument providing 31-day notice term deposits, incorporating minor amendments to pre and post-maturity notice settings following recent industry consultation. ASIC Corporations (31-day Notice Term Deposits) Instrument 2025/172 (Instrument) provides conditional relief so 31-day notice term deposits of up to five years can be treated as 'basic deposit products' under the Corporations Act.

The new Instrument introduces an alternative option for ADIs. They can now provide a combined notice at least 10 business days before maturity, confirming the interest rate for the new term deposit. ADIs may choose to provide a combined notice or continue to comply with the existing separate notices if they prefer. This is in response to industry feedback about difficulties complying with existing timeframes due to postal deliver issues.

The Instrument allows notices to be provided via electronic communication, reflection ASIC class relief in ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647.

See: Media Release

Banking

APRA and RBA release joint statement on the use of the RBA's overnight standing facility

On 2 April 2025, APRA and the RBA issued a joint statement regarding the use of the RBA's overnight standing facility. This follows the RBA's recent update to its monetary policy implementation approach, known as the 'ample reserves with full allotment' system, which changes to open market operations and the overnight standing facility.

The RBA's new approach allows eligible counterparties to borrow as many reserves as they demand at open market operations (OMO). The facilities are crucial for supplying the necessary reserves to maintain the cash rate close to its target. As the systems transition to an ample level of reserves, market participants may experience periods of increased liquidity demand. If they cannot find liquidity on suitable terms in private markets or via weekly OMOs, they are encouraged to use the overnight standing facility to support the implementation of monetary policy.

APRA and RBA have affirmed that the use of this facility by banks will align with routine liquidity management activities. Both agencies are comfortable with banks using the facilities and will continue to work closely with them to ensure they understand the role of the overnight standing facility and are comfortable incorporating it into their liquidity management practices.

See: Media Release; Statement

RBA's Financial Stability Review for April 2025

On 1 April 2025, the RBA released its Financial Stability review for April 2025 assessing the current global and domestic macro financial environment and the potential risks for financial stability in the period ahead. The review outlined focus areas including:

• A conceptual Framework for Assessing Financial Stability; and
• Looking at Digitalisation through a Financial Stability Lens.

The review provided a systematic approach in assessing and determining appropriate actions that significantly enhance the financial system's resilience. By mapping a build-up of vulnerabilities, policy makers can better understand how the financial system might absorb shocks, thereby promoting stability. This focus allows for proactive measures to be taken, ensuring financial system stability even in the face of unpredictable shocks, including those originating from geopolitical shifts.

Digital transformation was found to impact all aspects of the financial system especially regarding operational processes, information security and customer interactions. While it has led to efficiency gains and improved service deliveries, it creates new vulnerabilities that threaten financial system stability. This focus area examined how digitalisation has influenced financial stability in Australia, identifying common vulnerabilities and their impacts.

See: Financial Stability Review April 2025; Focus Topic 4.1; Focus Topic 4.2

Superannuation

ASIC releases list of recommendations to superannuation trustees in landmark death benefit claims handling report

On 31 March 2025, ASIC released Report 806 Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve (REP 806), which sets out 34 recommendations to superannuation trustees following its report into death benefit claims revealing the impacts of poor industry practices. REP 806 identified issues ranging from excessive delays, poor customer service, and ineffective claims handling procedures.

ASIC is calling on trustees to focus on several key areas including:

• enhanced customer service and faster response times;
• improved monitoring and reporting on claims handling timeframes;
• streamlined processes;
• better staff guidance and training;
• support for First Nations members and claimants; and
• clearer communications and support for members.

ASIC's review of trustees revealed issues such as excessive delays, gaps in data and inadequate support for vulnerable claimants. ASIC will continue to monitor trustees' progress to improving their claims handling processes to ensure they prioritising the needs of members and their beneficiaries.

See: Media Release; Report 806

AML/CTF

AUSTRAC releases changes to the tipping off offence

On 31 March 2025, AUSTRAC issued out a notification on the changes now in force for the tipping off offence. As of 31 March 2025, businesses and individuals subject to AML/CTF laws must now consider whether a disclosure could be expected to prejudice an investigation, following recent changes to the tipping off offence. The revised offence, carries a maximum penalty of approximately $39,000 or up to 2 years in prison are now focused on the potential harms resulting from a disclosure.

The updated offence aims to balance intelligence gathering with practicality, ensuring effective detection of criminal activity and preventing money laundering within legitimate businesses. Businesses covered by the AML/CTF legislation are now prohibited from disclosing certain information to another person (other than AUSTRAC) if it could reasonably be expected to prejudice an investigation.

See: Media Release

Authors: Narelle Smythe, Partner; Samantha Carroll, Partner; Lisa Simmons, Partner; Rehana Box, Partner; Con Tzerefos, Partner; Scott Charaneka, Partner; Hannah Glass, Special Counsel; Geena Davies, Senior Associate; Greg Patton, Senior Associate; Nicole Mazurek, Senior Associate; Kim Yen Nguyen, Senior Associate; Nicky Thiyavutikan, Senior Associate; Justin Ho, Senior Associate; Holly Marchant, Senior Associate and Nicholas Dennis, Senior Associate.