PwC Regulatory Update

February 2019

PwC 2

Contents

PwC Regulatory Update

3Legislative/Government

developments

8What have

the regulators been up to?

12Industry bodies

14Overseas

developments

21PwC publications

26Contacts

Legislative/Government developments

PwC 4

1. Legislative/Government developments

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

Royal Commission into Misconduct in the Banking, Superannuation and

Financial Services Industry

The Government has released Commissioner Hayne’s final report, which

contains the results of his inquiry into Misconduct in the Banking,

Superannuation and Financial Services Industry. The report outlines 76

recommendations, which the Government has committed to implement.

Source: Royal Commission

PwC has released a report, Resetting standards – now for the industry to

deliver, providing perspectives and insights on the Royal Commission Final

Report.

Source: PwC

Responding to the final report, The Australian Prudential Regulation Authority

(APRA) stated its intention to implement the recommendations expeditiously. Of

the 76 recommendations there are 10 requiring APRA’s direct attention.

Source: APRA

The Financial Services Council (FSC) viewed the release of the final report as

an opportunity to begin repairing the sector’s damaged reputation.

Source: FSC

Recommendations from the final report to strengthen the accountability and

effectiveness of regulators were welcomed by the Customer Owned Banking

Association (COBA), particularly the:

• New, independent oversight authority for APRA and the Australian Securities

Investment Commission (ASIC); and

• Regular capability reviews of APRA and ASIC.

Source: COBA

Final Productivity Commission report into superannuation

The final report by the Productivity Commission into the efficiency and

competitiveness of Australia's superannuation system has been released. The

report found that while the superannuation system has served Australians

reasonably well, there are significant issues within Australia’s superannuation

system, including:

• The prevalence of high fees;

• A significant number of unintended multiple accounts;

• Chronic underperformance by some funds; and

• A lack of effective competition particularly in the default fund system.

The Commission has outlined 31 recommendations to improve the

superannuation system.

Source: Treasury

PwC 5

1. Legislative/Government developments (cont’d)

PwC Regulatory Update

Recent consultations

The Government has released a consultation paper; Stage Two of the

Retirement Income Framework, and is seeking views on a proposed

standardised document that outlines key metrics and features to help

consumers compare different retirement income products.

Submissions are due by 28 March 2019.

Source: Treasury

The Consultation process for Superannuation Contributions Tax regulations has

been completed by the Government. An Exposure draft, and supporting

material, have been released to replace the existing Regulations, which are due

to expire on 1 April 2019. Only minor technical changes have been made to

reflect current drafting practice and remove redundant references without

altering the substantive meaning or operation of the existing Regulations.

Source: Treasury

Two bills implementing the tax and regulatory components of the CCIV regime

have been released by the Government for public consultation. The proposed

new law includes:

• The new Chapter 8B in the Corporations Act 2001 containing the core

provisions outlining the establishment of CCIVs and their operational and

regulatory requirements;

• Amendments to other legislation to support the implementation of CCIVs;

and

• The tax legislations, which ensures the tax treatment of CCIVs broadly

aligns with the existing treatment of attribution management investment

trusts.

Submissions are due by 28 February 2019.

Source: Treasury

The Government has released for public consultation an exposure draft of the A

New Tax System (Goods and Services Tax) Regulations 2019 and the Treasury

Laws Amendment (Goods and Services Tax) Regulations 2019 and explanatory

to replace the existing GST Regulations, which are due to sunset in April 2019.

The regulations are only being changed to the extent needed to ensure the

existing rules remain operational and the drafting is in line with current practice.

Source: Treasury

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC 6

1. Legislative/Government developments (cont’d)

PwC Regulatory Update

ASIC Industry Funding Model and Registry Search Fees

The consultation process has begun for the draft Treasury Laws Amendment

(ASIC Cost Recovery and Fees) Regulations 2019. The purpose of the draft

Regulations is to give effect to Government announcements to:

• Create a new subsector to enable ASIC to recover its regulatory costs

incurred from its close and continuous monitoring of Australia’s largest

institutions;

• Exempt journalists from paying certain registry search fees from 1 July 2019;

• Reduce the fee to access company roles and relationship extracts from $40

to $19 from 1 July 2019; and

• Make other minor amendments to the Levy and Fees Regulations to ensure

ASIC’s regulatory costs are more accurately reflected.

Source: Treasury

Introduction of the Consumer Data Right (CDR)

In line with the recommendations of the Review into Open Banking in Australia,

Treasury has prepared a first version of the Privacy Impact Assessment (PIA)

for the CDR, in accordance with the Privacy (Australian Government Agencies

– Governance) APP Code 2017. The draft documents the learnings and

outcomes from extensive consultation on privacy risks associated with

introducing consumer data access and portability rights. A revised PIA,

incorporating the views of the public as well as key decisions on the Consumer

Data Rules and standards, will be completed ahead of the Autumn

Parliamentary sitting period.

Source: Treasury

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC 7

1. Legislative/Government developments (cont’d)

PwC Regulatory Update

Transparency and enhanced disclosure practices in the General

Insurance sector

A discussion paper, Disclosure in General Insurance: Improving Consumer

Understanding has been released by the Government in response to the Senate

Economic References Committee’s report into the general insurance industry.

This paper is requesting the views of interested stakeholders on the underlying

issues and objectives behind the recommendations made in the Senate report.

Submissions are due by 28 February 2019.

Source: Treasury

Government consults on extending the tax regulations as they relate to

mutually-owned authorised deposit taking institutions (ADIs)

The Government has release an exposure draft of the Treasury Laws

Amendment (2019 Measures No. #) Regulations 2019 for public consultation.

The draft regulations propose to rectify the different treatment of capital

instruments issued by mutually-owned ADIs by extending the operation of tax

regulation to ensure equivalent treatment between capital instruments.

Source: Treasury

Government consults on a reporting regime for sharing economy platform

providers

Responding to the Black Economy Taskforce recommendation for a sharing

economy reporting regime, the Government has released a consultation paper;

A sharing economy reporting regime. This paper is seeking the views of

interested stakeholders on the possible design characteristics of a reporting

regime, including the scope of proposed information reporting requirements.

Source: Treasury

Government requests feedback of review into Initial Coin Offerings (ICOs)

An Issues Paper; Initial Coin Offerings (ICO), has been released for

consultation. Interested parties are invited to provide feedback on any of the

issues raised in the paper, including:

• Opportunities and risks posed by ICOs for Australia;

• A regulatory framework in Australia to allow those opportunities to be

harnessed while appropriately managing the associated risks; and

• Actions to be taken to best position Australia to capitalise on new

opportunities.

Submissions are due by 28 February 2019.

Source: Treasury

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

What have the regulators been up to?

PwC 9

2. What have the regulators been up to?

PwC Regulatory Update

The Australian Prudential Regulation Authority (APRA) finalises new

measures to strengthen outcomes for superannuation members

APRA has released a package of new and enhanced prudential requirements

designed to strengthen the focus of registrable superannuation entity (RSE)

licensees on the delivery quality outcomes for superannuation members. The

package includes:

• SPS 515 - Strategic Planning and Member Outcomes;

• SPS 220 - Risk Management;

• SPG 515 - Strategic and Business Planning; and

• SPG 516 - Outcomes assessment.

The introduction of an outcomes assessment is a central component of APRA’s

new framework. The assessment requires RSE licensees to annually

benchmark and evaluate their performance in delivering sound and valuable

outcomes to all members.

The new measures will be effective from 1 January 2020.

See: media release

APRA will remove interest-only benchmark for residential mortgage

lending

In a letter to all Authorised Deposit-Taking Institutions (ADIs), APRA has stated

its intention to remove the supervisory benchmark on interest-only lending, for

ADIs that have provided assurances on the strength of their lending standards.

The benchmark was put in place only as a temporary measure, in 2017, to

reduce the level of interest-only lending and improve the quality of mortgage

portfolios.

See: APRA

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

APRAAustralian Prudential Regulation

Authority

ASICAustralian Securities and Investments

Commission

AUSTRACAustralian Transaction Reports and

Analysis Centre

ASXAustralian Securities Exchange

PwC 10

2. What have the regulators been up to? (cont’d)

PwC Regulatory Update

Recent Consultations

The Australian Securities & Investments Commission (ASIC) is seeking

feedback on proposed changes to the fees and costs disclosure regime for

management investment schemes and superannuation outlined in consultation

paper, Review of RG 97 Disclosing fees and costs in PRSs and periodic

statements. The paper includes a proposed updated regulatory guide,

Disclosing fees and costs in PDSs and periodic statements (RG 97), and draft

amendments to Schedule 10 of the Corporations Regulations.

Submissions are due by 2 April 2019.

Recent reports

ASIC has released research exploring the consumer experience of internal

dispute resolution (IDR) procedures across the financial services sector. The

research highlighted the difficulties people face in approaching and navigating

the complaints process.

A report, Allocations in equity raising transactions, has been released by ASIC.

The report details the findings of ASIC’s review of allocations in equity raising

transactions across a range of large and mid-sized Australian-based licensees.

The report makes recommendations on improvements to licensee practices in

the conduct of allocations.

Recent key updates

The Global Financial Innovation Network (GFIN) was launched in January 2019

by an international group of financial regulators and related organisations,

including ASIC. The GFIN intends to provide a more efficient way for innovative

firms to interact with regulators, helping them navigate between countries as

they look to scale new ideas.

Since 1 January, 2019 new professional standards requirements for financial

advisers have been progressively replacing training standards in Licensing:

Training of financial product advisers (RG146). New entrants to the industry

seeking to become a relevant provider will need to meet the new professional

standards requirements.

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

APRAAustralian Prudential Regulation

Authority

ASICAustralian Securities and Investments

Commission

AUSTRACAustralian Transaction Reports and

Analysis Centre

ASXAustralian Securities Exchange

PwC 11

2. What have the regulators been up to? (cont’d)

PwC Regulatory Update

The ASX consults on 90 Day Bank Bill Futures contract changes

The ASX has released a consultation paper, ASX 90 Day Bank Bill Futures

Contract Changes, seeking feedback from market participants on the following

proposed changes to the Bank Bill futures contract:

• Change to the settlement process to make the contract cash settled at

expiry;

• Application of expiry position limits;

• Reduction in the minimum price increment for specific bank bill futures

months;

• Increase to the maximum allowable order size;

• Listing of serial bank bill futures; and

• Development of Good Till Cancelled (GTC) spread order functionality.

Submissions are due by 30 April 2019.

See: media release

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

AUSTRAC will reform the superannuation sector with new guidance

AUSTRAC has published guidance to assist reporting entities in the

superannuation sector to:

• Better understand their obligations under the Anti-Money Laundering and

Counter-Terrorism Financing Act 2006 (AML/CTF Act);

• Identify risks and potential criminal actions arising from the conduct of

superannuation funds and their clients;

• Explain how these reporting entities can use their AML/CTF ‘toolkit’ to

mitigate the industry-specific money laundering and terrorism financing

(ML/TF) risks they face.

See: media release

APRAAustralian Prudential Regulation

Authority

ASICAustralian Securities and Investments

Commission

AUSTRACAustralian Transaction Reports and

Analysis Centre

ASXAustralian Securities Exchange

Industry bodies

PwC 13

3. Industry bodies

PwC Regulatory Update

Professional associations announce a landmark code monitoring

cooperation agreement

The Financial Planning Association of Australia (FPA), along with five other

professional associations representing the financial planning/advice sector,,

have signed a cooperation agreement to develop a code monitoring solution for

their members.

The code monitoring compliance scheme application will be submitted to ASIC

and aims enable compliance with the Financial Adviser Standards and Ethics

Authority (FASEA) code of ethics to be monitored and enforced.

A special purpose company, Financial Advisers Monitoring Scheme (FAMS),

has been established to operate the compliance scheme.

See: media release

FSC consults on rebuild consumer code

The Asian Region Funds Passport (ARFP), a multilateral framework which

allows eligible managed funds to be marketed to retail investors across

participating countries, has become operational from 1 February 2019. The

current signatories to the ARFP are Australia, Japan, New Zealand, South

Korea and Thailand.

See: media release

FASEAFinancial Adviser Standards and Ethics Authority

FPAFinancial Planning Association of Australia

FSCFinancial Services Council

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

Overseas developments

PwC

4. Overseas developments – Global

BIS: Recent report

The Basel Committee on Banking Supervision

(BCBS) has published a report; Cyber-resilience:

range of practices, which identifies, describes and

compares the range of observed bank, regulatory

and supervisory cyber-resilience practices across

jurisdictions.

Source: BIS

BIS: Recent announcements

The BCBS has released an updated Pillar 3

disclosure requirements, endorsing market

discipline through regulatory disclosure

requirements in the following areas:

• Credit risk, operational risk, the leverage ratio

and credit valuation adjustment risk;

• Risk-weighted assets (RWAs); and

• An overview of risk management, RWAs and

key prudential metrics.

Source: BIS

The BCBS has released a consultation paper,

Revisions to leverage ratio disclosure

requirements, seeking feedback on revisions to

leverage ratio Pillar 3 disclosure requirements to

further include:

• Mandatory disclosure of the leverage ratio

exposure measure amounts of securities

financing transactions;

• Derivatives replacement cost; and

• Central bank reserves calculated using daily

averages over the reporting quarter.

Submissions are due by 13 March 2019.

Source: BIS

IOSCO: Recent announcements

The Board of the International Organisation of

Securities Commissions (IOSCO) has released a

report, IOSCO Report on Good Practices for Audit

Committees in Supporting Audit Quality, to assist

audit committees in promoting and supporting

audit quality.

The report has offered best practices to help audit

committees in the following set of tasks:

• Recommending the appointment of an auditor;

• Assessing potential and continuing auditors;

• Setting of audit fees;

• Facilitating the audit process;

• Assessing auditor independence;

• Communicating with the auditor; and

• Assessing audit quality.

Source: ISOCO

15

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

4. Overseas developments – Europe

EBA: Recent guidelines

The European Banking Authority (EBA) has

released its final guidelines about different kinds

of exposures associated with high risk under the

Capital Requirements Regulation (CRR). The

guideline would enable current practices

comparability and facilitate easy transition to the

upcoming regulatory revisions .

Source: EBA

The EBA has published final guidelines on the

simple, transparent and standardised (STS)

criteria for the securitisation on a cross sectoral

basis. The guidelines will help in easy

interpretation of the STS criteria and common

understanding for all the parties involved.

Source: EBA

The EBA has released its final guidelines on

disclosure of non-performing and forborne

exposures. The disclosure will help to provide a

clear picture of the quality of the banks' assets,

the main features of their non-performing and

forborne exposures, and the distribution of the

problematic assets and the value of the collateral

backing those assets in case of more troubled

banks.

Source: EBA

EBA: Recent announcements

The EBA sought feedback on its consultation to

amend the Commission's Implementing

Regulation on benchmarking of internal models to

adjust the benchmarking portfolios and reporting

requirements. The amendments aim to simplify

the portfolio's structure for the credit risk part and

gaining more insights into the market risk pricing

model of benchmarking exercise to be carried out

in 2020 .

Source: EBA

The European Supervisory Authorities (ESAs)

has published a joint report on innovation

facilitators (regulatory sandboxes and innovation

hubs). The report presents a comparative

analysis of the innovation facilitators established

to date within the EU coupled with best practices

for the design and operation of innovation

facilitators.

Source: EBA

EBA: Recent announcements

The ESAs has published two joint draft

Regulatory Technical Standards (RTS) to

amend the RTS on the clearing obligation and risk

mitigation techniques for non-cleared OTC

derivatives not cleared by central counterparties

(CCPs). The amendments will provide a specific

treatment for simple, transparent and

standardised (STS) securitization to ensure a

level playing field with covered bonds for the

proper implementation of the European Market

Infrastructure Regulation (EMIR).

Source: ESMA

The EBA has published its report on the

applicability and appropriateness of EU law to

crypto-assets, examining the following key areas

in its respect:

• The application of current EU banking,

payments, e-money and anti-money

laundering laws to crypto-assets;

• Crypto-asset custodian wallet providers and

crypto-asset trading platforms; and

• Credit institutions, investment firms, payment

institutions and electronic money institutions'

activities involving crypto-assets and

regulatory and supervisory issues.

Source: EBA

16

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

4. Overseas developments – Europe

ESMA: Recent announcements

The European Securities and Markets Authority

(ESMA) has published its final report amending

the tick size regime. The amendments will allow

National Competent Authorities (NCAs) of

European Union (EU) trading venues to decide on

an adjusted average daily number of transactions

(ADNT) on a case-by-case basis for the liquidity

available on third country venues in the calibration

of tick sizes.

Source: ESMA

ESMA: Recent announcements

The ESMA has published its guidelines on initial

coin offerings and crypto-assets, providing its

position on any gaps and issues in the current EU

financial regulatory framework for consideration

by EU policymakers.

ESMA has identified a number of concerns while

conducting a survey of NCAs during 2018:

• Crypto assets qualified under Markets in

Financial Instruments Directive (MiFID) need

potential interpretation or re-consideration of

specific requirements to allow for an effective

application of existing regulations; and

• In cases where these assets do not qualify as

financial instruments, the investors are subject

to potential risks without proper financial rules

applicable.

Source: ESMA

EIOPA: Recent opinions

The European Insurance and Occupational

Pensions Authority (EIOPA) has published an

opinion on non-life cross-border insurance

business of a long-term nature and its

supervision. The Opinion is addressed to NCAs

and outlines EIOPA’s expectations to cross

border undertakings and recommendations to the

NCAs on the following aspects:

• Expectations on technical provisions with the

focus on the best estimate calculation;

• Expectations on governance, namely on the

key functions and the Administrative,

Management or Supervisory Body (AMSB);

and

• Recommendations on the supervisory review

process and the collaboration between home

and host NCAs.

Source: EIOPA

17

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

4. Overseas developments – UK

FCA: Recent consultations

The Financial Conduct Authority (FCA) is

consulting on cryptoassets guidance to provide

clarity to market participants regarding whether

their activities fall within the scope of the FCA’s

regulatory remit and related authorisation

requirements. It also states that tokens are likely

to be classified as:

• Specified Investments under the Regulated

Activities Order;

• Financial Instruments under the Markets in

Financial Instruments Directive II;

• E-Money under the E-Money Regulations; and

• Captured under the Payment Services

Regulations.

Submissions are due by 5 April 2019.

Source: FCA

FCA: Recent consultations

The FCA is seeking feedback on its proposals to

change the ways banks and building societies

charge for overdrafts (CP18/42) and extends

protection to customers of home-collected credit,

catalogue credit, store card and buy now pay later

offer sectors (CP18/43).

Submissions are due by 18 March 2019.

Source: FCA

PRA: Recent consultations

The Prudential Regulation Authority (PRA) has

released a consultation paper, Credit risk

mitigation: Eligibility of financial collateral, seeking

feedback on proposed changes to Supervisory

Statement Credit risk mitigation (SS17/13). It aims

to clarify expectations regarding the eligibility of

financial collateral as funded credit protection

under the Capital Requirements Regulation.

Submissions are due by 10 April 2019.

Source: Bank of England

The PRA is seeking feedback on proposed rules

for UK banks and building societies with £50

billion or more in retail deposits on an individual or

consolidated basis, to assess the preparations for

resolution, submit a report of their assessment to

the PRA, and publish a summary of their report.

Its purpose is to ensure firms that pose a high risk

to the UK’s financial stability are resolvable by

2022 and increase firms’ accountability &

ownership of progress.

Submissions are due by 5 April 2019.

Source: Bank of England

18

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

4. Overseas developments – UK

CFTC: Recent announcements

The Commodity Futures Trading Commission

(CFTC) has released an amended order to allow

additional Multilateral Trading Facilities (MTFs)

and organised trading facilities to be exempted

from the Swap Execution Facility (SEF)

registration requirement with the CFTC.

Source: CTFC

The CFTC is seeking feedback on the underlying

technology, opportunities, risks, mechanics, use

cases, and markets for virtual currencies beyond

Bitcoin, namely Ether and its use on the Ethereum

Network.

Source: CFTC

OCC: Recent consultations

The Office of the Comptroller of the Currency

(OCC) has requested feedback on its proposed

rule to amend their stress testing requirements for

national banks and Federal savings associations.

The proposed rule would:

• Revise the minimum threshold for national

banks and Federal savings associations to

conduct stress tests from $10 billion to $250

billion;

• Revise the frequency of stress testing for

national banks and Federal savings

associations; and

• Reduce the number of required stress testing

scenarios from three to two.

Source: OCC

The five Federal financial regulatory agencies are

seeking feedback on a proposal to exclude certain

community banks from the Volcker rule,

consistent with the Economic Growth, Regulatory

Relief, and Consumer Protection Act

(EGRRCPA). The agencies are jointly proposing

to exclude community banks with $10 billion or

less in total consolidated assets and total trading

assets and liabilities of 5 percent or less of total

consolidated assets from the rule restrictions.

Source: OCC

SEC: Recent announcements

The Securities and Exchange Commission (SEC)

is seeking feedback on proposed rules requiring

the application of risk mitigation techniques to

portfolios of uncleared security-based

swaps. The proposed changes include:

• Reconciling outstanding security-based swaps

with applicable counterparties on a periodic

basis.

• Engaging in certain forms of portfolio

compression exercises.

• Executing written security-based swap trading

relationship documentation with each of its

counterparties prior to, or contemporaneously

with, executing a security-based swap

transaction.

Source: SEC

19

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

4. Overseas developments – ASIA

HK: Recent announcements

The Securities and Futures Commission (SFC)

and the Commission de Surveillance du Secteur

Financier (CSSF) have entered into a

Memorandum of Understanding (MoU) on Mutual

Recognition of Funds, which will enable Hong

Kong public funds and Luxembourg Undertakings

for Collective Investment in Transferable

Securities (UCITS) to be distributed in each

other’s market. The MoU also establishes:

• A framework for exchange of information; and

• Regular dialogue and regulatory cooperation in

regards to the cross-border offerings of eligible

Hong Kong public funds and Luxembourg

UCITS funds.

Source: SFC

Korea: Recent announcements

The FSC announced follow-up measures for

capital market reform, including:

• New schemes of introducing a specialised

brokerage company to facilitate investment

into unlisted securities of SMEs and venture

companies; and

• Growing a pool of professional investors.

Source: FSC

The FSC announced its plans to improve the

Korea Next Exchange (KONEX) by:

• Facilitating fundraising by SMEs & venture

companies;

• Boosting liquidity in the KONEX market;

• Strengthening its role of nurturing SMEs &

venture companies; and

• Enhancing investors’ trust in the KONEX

market.

Source: FSC

Singapore: Recent announcements

The Monetary Authority of Singapore (MAS) has

issued a revised Singapore Code on Take-overs

and Mergers to clarify its application for dual class

share companies with a primary listing on the

Singapore Exchange. The key changes to the

Code are:

• Relief for shareholders who trigger a

mandatory general offer.

• Greater certainty for the market and

safeguards for minority shareholders.

Source: MAS

20

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC publications

PwC

5. PwC publications

PwC AUS: Super snapshot: Assessing

efficiency and competitiveness

PwC AUS has issued a report, Super snapshot:

Assessing efficiency and competitiveness,

summarising the 31 recommendations proposed

for superannuation in the Productivity

Commission’s final inquiry report.

The report further discusses the additional

impacts on employers, administrators and

auditors in the industry.

See publication

PwC AUS: APRA’s Member Outcomes

Prudential Reforms – Our Perspectives

APRA released new prudential requirements on

12 December 2018 as part of Prudential Standard

SPS 515 Strategic Planning and Member

Outcomes (SPS 515).

Under the new requirements, trustees will need to

demonstrate that their strategic planning

processes meet APRA’s principles as well as

undertake an annual assessment of outcomes

delivered to members.

PwC AUS has issued a report, APRA’s Member

Outcomes Prudential Reforms – Our

Perspectives, highlighting the four main

requirements of the reforms and their subsequent

impacts.

See publication

PwC AUS: Regulatory Guide 132 –

Compliance and oversight

In response to ASIC issuing Regulatory Guide

132, PwC AUS has released a report, Regulatory

Guide 132 – Compliance and oversight, detailing

what the new regulatory guide means for industry

participants.

The key areas that responsible entities should

consider are:

• Compliance management systems (CMS);

• Compliance plans;

• Compliance committees;

• Compliance plan auditors; and

• Australian passport funds

See publication

22

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

5. PwC publications (cont’d)

PwC AUS: Summary of ASIC Consultation

Paper 308 on RG97

ASIC released Consultation Paper 308 on 8

January 2019 in relation to the independent

expert’s proposed amendments’ to Regulatory

Guide 97, Disclosing fees and costs in PDSs and

periodic statements (RG97).

PwC AUS has released a report, Summary of

ASIC Consultation Paper 308 on RG97, which

highlights the proposed amendments, key

observations and next steps.

See publication

PwC HK: Asset & wealth management 2025 -

The Asian awakening

PwC HK has released a report, Asset & wealth

management 2025 - The Asian awakening,

highlighting how the industry will be impacted by

changing people skills, fees, products, distribution

regimes, regulations and use of technology in

future. It brings out the following five key trends:

• Investor and regulatory scrutiny shifting power

to investors;

• Entry of younger generation of tech-savvy

investors;

• Passive strategies gaining favour over active

strategies;

• APAC asset and wealth managers acting as

the new financiers of infrastructure and real

estate projects; and

• Financial integration across developed

markets is driving the region to become more

cooperative and interconnected.

See: publication

PwC HK: Asset & wealth management tax

highlights – Asia Pacific

In the latest edition of asset and wealth

management tax highlights for the Asia Pacific

region, PwC HK has highlighted industry and tax

developments from Australia, China, Hong Kong

and India, which may impact asset and wealth

management businesses.

In Australia, regulations have been introduced to

update the list of Exchange of Information (EOI)

for 54 countries, which are now able to access the

concessional Managed Investment Trust (MIT)

withholding tax rate of 15% in respect of qualifying

MIT distributions.

Hong Kong has signed a bilateral Competent

Authority Agreement (CAA) on Automatic

Exchange of Financial Account Information

(AEOI) with Mainland China. To deepen the

financial cooperation between China and the UK

and to expand the opening up of China’s capital

market, a new investment scheme (the Shanghai-

London Stock Connect) will be launched in both

the Shanghai Stock Exchange and the London

Stock Exchange.

See: publication

23

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

5. PwC publications (cont’d)

PwC UK: CBI PwC Financial Services Survey

PwC UK has published a report, CBI PwC

Financial Services Survey – Q4 2018,

summarising the results from the survey of the UK

financial services sector covering questions on

business optimism, value and volume of

business, charges/costs and profitability,

employment and training, capital expenditure,

business prospects, regulation, growth,

competitiveness and financial market conditions.

Some of the key findings are as below:

• The financial services industry is undergoing

unprecedented change driven by innovation

and technology.

• Optimism in the financial services industry

decreased further in the fourth quarter of 2018.

• Top 5 challenges faced by financial services in

2019 are: macroeconomic uncertainty;

regulatory compliance; Brexit; financial market

instability and making better use of data to

improve customer experience and business

performance.

See: publication

PwC US: Current developments for mutual

fund directors

PwC US has published the latest edition of

Current developments for mutual fund directors:

Perspectives for management and the Board.

This edition includes featured articles on topics

affecting the mutual fund industry, including:

• Board composition – Key trends and

developments;

• Trends in mutual fund expenses: challenges

and opportunities ahead;

• PwC Liquidity Risk Management

benchmarking results; and

• Mutual fund tax function of the future.

See: publication

PwC US: How to make your analytics

functions more efficient and cost-effective

Analytics tools have long promised to help

executives make more informed business

decisions but many of these tools have been

ineffective due to the flood of new data and the

time required preparing and analysing it.

PwC US has published a report, Financial

intelligence - how to make your analytics

functions more efficient and cost-effective,

outlining how automation may help analytics tools

fulfill their intended output and decision-driven

role.

See: publication

24

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

PwC

5. PwC publications (cont’d)

PwC US: Financial Services deal insights -

year end 2018

PwC US has published a report, Financial

Services (FS) deal insights: Year-end 2018,

highlighting the 2018 activities and trends in

Banking Capital Markets, Insurance and Assets

and Wealth management sector. Some of the key

findings of the report are:

• The value of FS deals in 2018 rose above prior

year levels.

• The surge shows no signs of weakening in

2019 owing to digital disruption, market

volatility, and the clear gains from

consolidation.

• PwC expect corporate, venture, and private

equity to play a bigger role in acquisitions and

minority investments both inside and outside

the US.

See: publication

PwC US: IASB proposes to further amend

IFRS 17

The International Accounting Standards Board

(IASB) has proposed amendments to IFRS 17 to

better reflect the economics of insurance

contracts. The proposed amendments include:

• Requiring allocation of insurance acquisition

cash flows to anticipated future renewals;

• Requiring recognition of a gain in profit or loss

when an insurer recognises losses on onerous

underlying insurance contracts at initial

recognition, to the extent that a reinsurance

contract held covers the losses of each

contract on a proportionate basis;

• Expanding the scope for the risk mitigation

exemption for insurance contracts with direct

participation features to reinsurance contracts

held that are used to mitigate financial risk;

and

• Requiring consideration of the existence of an

investment return service in allocating the

CSM using coverage units.

PwC US has released a report; IASB proposes to

further amend IFRS 17, outlining the key points

from the proposal.

See: publication

25

PwC Regulatory Update

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

Contacts

PwC 27

6. Contacts

PwC Regulatory Update

Nicole Salimbeni

Partner

Email: nicole.salimbeni@pwc.com

Tel: (02) 8266 1729

Edwina Star

Partner

Email: edwina.star@pwc.com

Tel: (02) 8266 4940

Amrita Jebamoney

Partner

Email: amrita.jebamoney@pwc.com

Tel: (02) 8266 1826

Sarah Hofman

Partner

Email: sarah.hofman@pwc.com

Tel: (02) 8266 2231

Craig Stafford

Partner

Email: craig.stafford@pwc.com

Tel: (02) 8266 3725

Legislative/

Government

developments

Overseas

developments

What have

the regulators

been up to?

PwC

publicationsContacts

Industry

bodies

www.pwc.com.au

Thank you

www.pwc.com.au

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