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Regulatory Initiatives Grid May 2026

David Jacobson — Wed, 06 May 2026 07:09:50 +0000

Treasury has released the Regulatory Initiatives Grid – Edition 3, which lists announced and publicised regulatory reform priorities and initiatives that will materially affect the financial sector over the next 2 years, as reported by ASIC, APRA, AUSTRAC, ATO, RBA, ACCC, AFSA, and the Department of Home Affairs.

The RIG covers 8 financial sectors (banking/credit, investment management, financial advice, financial markets, insurance, payment services/digital assets, superannuation, and other) and organises initiatives into 4 lifecycle categories: policy development, development of legislation, regulations and instruments, ongoing program implementation, and review and evaluation.

Listed regulatory changes are indicative only and remain subject to change including, for example, to reflect changes in priorities and/or the market environment.

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Author: David Jacobson
Principal, Bright Corporate Law
Email: djacobson@brightlaw.com.au
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

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Operational risk management CPS 230 amendments

David Jacobson — Wed, 06 May 2026 07:08:55 +0000

APRA has released the final targeted amendments to cross-industry Prudential Standard CPS 230 Operational Risk Management (CPS 230) to introduce limited exemptions from specific contractual requirements for material arrangements with certain categories of service providers, where contractual compliance is not practicable.

The categories of exempt service providers are:

Government agencies
Regulators
Central banks
Financial market exchanges
Operators of clearing and settlement facilities
Operators of payment systems and schemes
Financial messaging infrastructures .

The arrangement must use standardised terms or not be documented in a formal agreement.

The updated CPS 230 commences on 1 July 2026.

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Privacy notice for AML/CTF customer due diligence

David Jacobson — Wed, 06 May 2026 07:08:27 +0000

The OAIC has published a template privacy collection notice for customer due diligence by reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act.

The new template collection notice is intended to help entities meet notification requirements when collecting personal information, while allowing flexibility to limit disclosures where necessary to avoid tipping off investigations.

Background.

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Austrac’s sector surveillance focus

David Jacobson — Wed, 06 May 2026 07:07:58 +0000

Austrac has published reports identifying its surveillance in the illicit tobacco trade, the wealth management sector and foreign‑owned banks.

Austrac says it has completed 2 separate supervisory campaigns targeting different parts of the foreign-owned banking sector. These campaigns showed that weaknesses in controls and reporting are creating opportunities for criminals to exploit Australia’s financial system.

The campaigns examined low suspicious matter reporting (SMR) in foreign bank branches as well as money mule risks in foreign bank subsidiaries.

Austrac says high risk behaviours and unusual or suspicious customer transactions include providing services to foreign politically exposed persons (PEPs) and relatives and associates of foreign PEPs, domestic and foreign private companies, trusts and foundations, as well as high net wealth individuals.

Austrac says that Australia’s illicit tobacco market presents a serious organised financial crime problem, generating significant criminal profits and driving violence, tax evasion and community harm.

AUSTRAC provided banks with a unique reference code to use in suspicious matter reports, enabling illicit tobacco activity to be more easily identified, tracked and disrupted.

In the wealth management sector Austrac has written to businesses in the wealth management sector with concerns about alarmingly low suspicious matter reporting (SMR) and the risk that serious financial crime may be going undetected.

The letter follows a supervisory campaign in which we found that 98 per cent of wealth management businesses did not submit a single SMR in 2025, despite operating in a sector exposed to a wide range of money laundering risks.

While many firms reported having no high‑risk customers, Austrac says that this was inconsistent with the nature of the sector, which can involve complex investment structures, cyber‑enabled fraud and the use of intermediaries.

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Member protections in the superannuation industry

David Jacobson — Wed, 29 Apr 2026 04:35:34 +0000

Treasury has released a consultation paper on Enhancing member protections in the superannuation industry.

The proposals have been developed in response to the losses suffered by members of the Shield Master Trust and First Guardian funds.

While matters concerning Shield and First Guardian are before the Federal Court and part of ongoing investigations by ASIC and liquidators, the alleged practices employed in both cases have raised areas of concern including:

Click-bait marketing by lead generators, which led to members being connected to financial advisers who pressured them into switching their super;
Platform Trustees’ broad legal and prudential obligations may not be matched by consistently robust governance practices;
Superannuation portability arrangements may limit the time for member reflection and be inadequate for informing members of material changes in risks and responsibilities; and
Existing remediation pathways inconsistently allocate responsibility for losses where multiple entities are involved and do not provide clarity for affected consumers.

While certain proposals are directed specifically at platform operators, a number of the reforms could apply more broadly to all APRA-regulated superannuation funds.

The proposals are in 5 categories:

Strengthen governance requirements for Platform Trustees including mandatory holding limits for certain investment options and codified due diligence requirements;
Increase penalties under the SIS Act to better align with the Corporations Act 2001;
Introduce waiting period for inter-fund superannuation switches;
Limit fee deductions for switching-related financial advice;
Requiring Platform Trustees to compensate members for eligible losses.

The Government has also released a consultation paper on proposals to curb lead generation activity, including consideration of the existing anti-hawking regime and conflicted remuneration settings.

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Regulating Cash Distribution in Australia

David Jacobson — Wed, 29 Apr 2026 04:35:09 +0000

Treasury has released for consultation an exposure draft Cash Distribution Framework Bill 2026 which establishes a legislative framework to regulate cash distribution services in Australia. It also introduces a crisis management and resolution regime for cash distribution services that are critical to the availability of cash in Australia. Background.

The framework will be regulated by the Reserve Bank of Australia (RBA) and the Australian Competition and Consumer Commission (ACCC).

The RBA can designate an entity that has a significant role in the Australian cash distribution system. A designated entity is then subject to the regulatory framework, with the exercise of some powers, such as crisis resolution actions, available only in certain circumstances.

The Bill allows the ACCC to oversee pricing and other terms in agreements covering critical cash distribution services and access to facilities and to set service-level standards to support access to cash for all Australians.

It requires designated providers to negotiate with customers in good faith.

The ACCC and the RBA have information gathering and enforcement powers to support and enforce the regulatory framework.

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Non-cash Payment Facilities regulation

David Jacobson — Wed, 29 Apr 2026 04:34:35 +0000

ASIC has issued ASIC Corporations (Non-cash Payment Facilities) Instrument 2026/167 that provides exemptions for low-risk non-cash payment facilities from different aspects of the financial services licensing regime in the Corporations Act.

ASIC will review the exemptions from licensing, conduct, and disclosure obligations for certain non-cash payment facilities when the payments licensing reforms take effect.

Background.

The Corporations Act provides that a facility through which, or through the acquisition of which, a person makes payments otherwise than through the delivery of notes or coins (a non-cash payment facility) is a financial product.

These products are subject to the financial services regulatory regime, which requires persons to hold an Australian financial services (AFS) licence in order to provide financial services in relation to a financial product.

The instrument remakes relief for the following non-cash payment products, which satisfy prescribed conditions:

loyalty schemes and road toll facilities, which are not financial products;
prepaid mobile facilities and some gift facilities;
low value non-cash payments products; and
travellers’ cheques.

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ASIC’s roadmap for digital assets law reform implementation

David Jacobson — Wed, 29 Apr 2026 04:33:52 +0000

ASIC has announced its roadmap for bringing digital asset platforms and tokenised custody platforms under the financial services licensing regime from 9 April 2027.

Background.

This includes its expected timeline and approach to consulting on the new standards and guidance, including early indications of the content that will be covered.

Under the new regime, ASIC is tasked with licensing and supervising these platforms, and with enforcing the law as required.

In the meantime, see ASIC Information Sheet 225 on licence authorisations for digital assets.

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Draft Children’s Online Privacy Code and financial services

David Jacobson — Wed, 15 Apr 2026 05:15:02 +0000

The Office of the Australian Information Commissioner (OAIC) is consulting on the development of a Children’s Online Privacy Code.

If a financial service provider is concerned with the activities of children through banking or credit products or advice, it could be affected by the Code.

The Privacy Act defines “child”as “an individual who has not reached 18 years”.

The Children’s Online Privacy Code requires entities affected by the Australian Privacy Principles to be bound by the Code to adopt best practice approaches to the handling of children’s personal information.

Marketing to children, which includes social media, must be “age appropriate”.

In relation to banks, the Explanatory Statement of the draft notes:

“the Code applies to specific services provided by an entity, rather than all the services of an entity as a whole.

For example, an entity may offer a singular service that is likely to be accessed by children (such as a pocket money app offered by a bank), while its other services are not (for example, that bank’s business banking and home loan apps). In that case, only the relevant service is captured, ensuring that other services which the entity provides that are not likely to be accessed by children or primarily concerned with the activities of children are not unintentionally brought within scope.”

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New licensing exemptions for foreign financial services providers

David Jacobson — Wed, 15 Apr 2026 05:13:55 +0000

The Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Axt 2025 has been passed to amend the Corporations Act 2001 to provide new licensing exemptions for foreign financial services providers, among other things.

The amendments establish three exemptions from the requirement to hold an AFS licence: the professional investor exemption, the comparable regulator exemption and the market maker exemption.

The Act also fast-tracks the process for foreign financial services providers that apply for an AFS licence by exempting them from the fit and proper person test if they are authorised to provide financial services in a comparable overseas regulatory regime.

The exemptions will commence on 9 April 2027.

Background.

In the meantime ASIC Corporations (Foreign Licensees and ADIs) Instrument 2026/121 exempts foreign companies that hold an Australian financial services licence from certain financial reporting and record
keeping obligations, as well as the requirement to lodge financial statements and have them audited, under Division 6 of Part 7.8 of the Corporations Act 2001 (Act), subject to meeting certain conditions.

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Bright Law | searchable regulatory information for Australian financial service providers

Regulatory Initiatives Grid May 2026

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