Archived News for Finance Sector Professionals - June, 2011
Attorney-General Robert McClelland and Parliamentary Secretary to the Treasurer David Bradbury have released an options paper setting out a pathway for regulatory reform of Australia's insolvency industry.
The options paper, entitled A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia, looks at reforms to address concerns about misconduct in the insolvency profession and to improve the value for money for recipients of insolvency services.
Key reform areas in the paper include promoting a high level of professionalism and competence by practitioners, enhancing transparency and communication and promoting increased efficiency in insolvency administration.
Legislation introduced to protect trusts
Legislation has been introduced to Federal parliament to ensure that capital gains and franked distributions can continue to be 'streamed' through trusts.
ASIC to consult on reporting by credit rating agencies
The Australian Securities and Investments Commission (ASIC) has released a consultation paper on the form and content of the compliance report that each of Australia’s credit rating agencies must lodge with ASIC annually as part of moves to help boost the integrity and standards of Australia’s financial system.
Consultation Paper 160 Credit rating agencies: IOSCO Code Annual Compliance Report (CP 160) proposes implementing reporting requirements for credit rating agencies (CRAs) concerning their compliance with obligations on matters such as the quality and integrity of their ratings process, conflicts of interest management and the transparency and timeliness of ratings disclosure.
ASIC Chairman, Greg Medcraft, said the proposals – which are the subject of consultation with industry – are aimed at requiring CRAs to detail how they’ve met their licence conditions, which include complying with the International Organization of Securities Commissions’ (IOSCO) Code of Conduct Fundamentals for CRAs.
‘ASIC sees establishing reporting standards, together with setting Australian financial services (AFS) licence conditions and ongoing industry-wider surveillance, as its core regulatory tools in supervising CRAs,’ Mr Medcraft said.
‘Reporting by CRAs helps give ASIC, and therefore the broader market, insight into the operations of CRAs and as such, some degree of reassurance to investors in the integrity of issued credit ratings.’
Specifically, the proposed reporting requirement would require CRAs to provide a narrative description of any implemented or planned measures that have the aim of ensuring compliance with eleven obligations referrable to the IOSCO Code and the CRAs’ AFS licence conditions.
'We consider that the information reported in the compliance report will provide ASIC with a form of comfort that the CRAs have measures in place designed to ensure that they comply with their obligations, at a reasonable compliance cost to CRAs,’ Mr Medcraft said.
Consultation with industry on the proposals in the paper will continue until 13 July 2011, after which ASIC will consider implementing the reporting requirement, taking into account the results of the consultation.
Rate increase unlikely on back of GDP contraction
The Reserve Bank of Australia is unlikely to announce an interest rate increase at its June meeting this week, according to a report in The Financial Review.
AAMI makes its move online
One of Australia’s largest insurance agencies, AAMI, has announced it will shut its 24 offices nationwide and move to a purely online service model.
Declining home ownership makes super main investment
A new white paper by Retail Employees Superannuation Trust (REST) Industry Super has found that many Australians are abandoning the dream of owning their own home, predicting that 25% of Australians may not own their own home when they retire in 25-35 years compared to 15% today.
GDP drop likely as CAD worsens
The increasing current account deficit, the discrepancy between the value of goods imported and that of goods exported, is widening according to recent findings. The continued widening of the country’s terms of trade can be considered an indicator to a possible drop in gross domestic product (GDP) of the country.