ASIC approves ABA Code of Practice
The Australian Securities and Investments Commission (ASIC) has given the Australian Banking Association’s (ABA’s) new Banking Code of Practice its tick of approval following an independent review and extensive stakeholder consideration.
The new code, which provides for improved protections for small business borrowers and expands the reach and impact of legal protections against unfair contract terms, was altered by the ABA to satisfy ASIC’s criteria and would commence operation from 1 July, 2019.
Given the code applies to small businesses which borrow up to $3 million, it would cover between 92 and 97 per cent of businesses in Australia, but ASIC’s approval is conditional on an independent review of the definition of “small business” within 18 months of the code’s commencement.
The targeted review aims to test the adequacy and application of the code’s small business coverage in practice and would run alongside ASIC’s collection of quarterly data from banks and the Australian Financial Complaints Authority.
All ABA member banks would be required to subscribe to the code as a condition of their ABA membership, and it would be administered and enforced by independent monitoring body, the Banking Code Compliance Committee.
The code is still subject to any findings from the Banking Royal Commission.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.