Over the past few years, the ALRC used pioneering data collection and analysis to scrutinise corporations and financial services legislation. Using legislative data, the ALRC was able to show just how complex corporations and financial services legislation is. The ALRC also used that data when developing reforms.

This article aims to answer some of the (hypothetically) frequently asked questions about the Legislative Data Framework recommended by the ALRC (Recommendation 58). The Legislative Data Framework would be a publicly available data framework for monitoring the development of corporations and financial services legislation. As outlined below, it would be a useful tool for several different users of the legislation.

This is the sixth (and final) in a series of short pieces following the release of the ALRC’s Final Report relating to the legislative framework for corporations and financial services regulation.

What is legislative data?

By treating legislation as data (or a dataset), a wide range of data points can be generated. These include, for example, page length, word length, the number of chapters, parts, or sections, the number of defined terms, and the frequency with which defined terms are used. This data can then be analysed to generate novel insights into the law, as the ALRC has done when investigating the complexity of corporations and financial services legislation. The use of legislative data underscores the ALRC’s commitment to evidence-based law reform.

The ALRC’s DataHub contains the data sets used by the ALRC and several illustrations of how legislative data can be used.  

What is the Legislative Data Framework?

The Legislative Data Framework would provide a publicly available resource for users of corporations and financial services legislation.

The Legislative Data Framework has three main purposes:

• to provide resources that help stakeholders navigate and understand the legislation;
• to help government administer and reform the legislation; and
• to allow legislation to be monitored over time and for stakeholders to hold government accountable for the legislation’s development over time.

Recommendation 58 sets out the types of legislative data that the ALRC recommends that the framework should track. This includes, for example:

• How many pieces of principal primary and delegated legislation are currently in force?
• How many are enacted each year?
• How long are they (how many pages and words)?
• How many powers to make regulations (and other legislative instruments) are in force?
• How many of those powers are enacted each year?
• How many times have those powers been exercised?
• How many notional amendments are in force and enacted annually?
• Which pieces of legislation do those notional amendments affect?

For more information on the legislative data framework, see Chapter 10 of the Final Report.

How has the ALRC used legislative data in this Inquiry?

The ALRC has used computational methods to analyse over 53GB of textual data. This is the equivalent of over 10 million pages of documents, including: more than 13,000 Acts, 89,000 legislative instruments, more than 35,000 legislation compilations, 101,000 court judgments, and 200 regulatory guides.  

The ALRC wrote a number of computer programs using ‘R’ programming language to ‘scrape’ the HTML of legislation and metadata legislation from the Federal Register of Legislation website. This data was then computationally analysed to help the ALRC measure and understand the breadth of the legislative complexity in the financial services legislative framework.  

For more information on the methodology used in this Inquiry, see Interim Report A. 

How does the ALRC see the Legislative Data Framework being used?

The Terms of Reference for the Inquiry asked the ALRC to consider ‘how legislative complexity can be appropriately managed over time’. The Legislative Data Framework would help do this.

In particular, it would be used to:

• support government and regulators to make it easier to produce higher quality legislation, and to perform their regulatory stewardship roles; and
• promote accountability by providing the basis for accountability dashboards that track changes in the volume of legislation, regulatory guidance, notional amendments, unused legislative powers, offences, and other penalties.

The ALRC suggests that the Legislative Data Framework should be used alongside a legislative complexity framework. Currently, there is very little research into legislative complexity in Australia. This legislative complexity framework would seek to fill that gap.

The legislative complexity framework would provide a way to track how particular legislative features make legislation more or less complex over time. For more information on the legislative complexity framework, see Chapter 10 of the Final Report.

What is currently being done with data and legislation?

Legislative data is being used for more than just corporations and financial services legislation.  

The Australian Government recently completed a Review of the Migration System. In the Review, the legislative and policy complexity of migration law was highlighted through the use of data and visualisations.  

Similarly, Associate Professor Crawford and others used data collected from the Federal Register of Legislation to measure complexity across several federal Acts. 

The NSW Government Legislation Twin uses data so that stakeholders can gain a better understanding of the interconnections between NSW legislation, other legal instruments, and government agencies and ministers.

How resource-intensive would a Legislative Data Framework be?

The majority of the ALRC’s data collection and publication was performed by the equivalent of less than one full-time staff member, with modest computing resources. The ALRC’s experience suggests that the Legislative Data Framework would not require considerable resources.

What could the legislative data framework be used for in the future?

There are many potential future uses for the Legislative Data Framework. The ALRC has discussed how the framework could facilitate the development of regulatory technology (commonly referred to as ‘RegTech’) and other technological solutions to aid compliance.

In the future, the data framework could be extended to obtain more granular data, which would provide specific insights on particular aspects of legislation. For an example of how such granular data could be used, see Chapter 3 of Interim Report A.

The data framework could also be extended to cover all Commonwealth legislation. This would have benefits for everyone who uses Commonwealth legislation, as well as those who are involved in legislative scrutiny and maintenance.

This article answers some of the (hypothetically) frequently asked questions about the Financial Services Law Schedule (the ‘FSL Schedule’) recommended by the ALRC. Implementing two of the ALRC’s recommendations would produce the FSL Schedule:

• creating the Financial Services Law by restructuring and reframing the financial services provisions within Chapter 7 of the Corporations Act 2001 (Cth) (‘Corporations Act’) and Part 2 Div 2 of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’) (Recommendation 41); and
• enacting the Financial Services Law as Sch 1 to the Corporations Act (Recommendation 42).

This is the fifth in a series of short pieces following the release of the ALRC’s Final Report relating to the legislative framework for corporations and financial services regulation.

What is the FSL Schedule?

The FSL Schedule would contain the key provisions relating to the regulation of financial products and financial services. It would be a clearly identifiable body of primary legislation that would be more coherently structured and easier to navigate than existing legislation.

The FSL Schedule would replace most of Chapter 7 of the Corporations Act and the entire Part 2 Div 2 of the ASIC Act, thereby reducing the number of places users need to look to find the law.

What would the FSL Schedule contain?

The FSL Schedule would contain the most important regulatory provisions, such as core obligations, core prohibitions, offence provisions, rights, remedies, and definitions.

The FSL Schedule would comprise three elements:

• all of the key financial services-related provisions that are currently found in Chapter 7 of the Corporations Act and Part 2 Div 2 of the ASIC Act; and
• objects clauses which would identify the fundamental norms of behaviour underpinning the legislation; and
• a list of defined terms.

The provisions of the FSL Schedule would be structured and framed in a way that would make it as easy to navigate and understand as possible. For more detail about how this could be done, see Chapter 5 of the Final Report.

Why did the ALRC recommend a schedule?

As discussed in Interim Report C, a schedule would allow the greatest flexibility to restructure and reframe the existing legislation while causing the least amount of disruption to other parts of the Corporations Act and ASIC Act.

In addition, the ALRC recommends that the Financial Services Law be contained in a schedule because:

• a schedule can be used to create a clearer legislative ‘identity’ for the regulation of financial services and to highlight common themes that traverse several chapters;
• it would be easier to facilitate integration of Part 2 Div 2 of the ASIC Act because all levels of the macrostructure (such as chapters and parts) could be used;
• retaining the substance of Chapter 7 in a schedule to the Corporations Act would enable existing linkages with other parts of the Act to be maintained more easily; and
• provision numbering in the schedule could ‘start afresh’, whereas any restructuring of the provisions of Chapter 7 of the Corporations Act would require renumbering.

What did stakeholders say about the idea?

A number of stakeholders provided submissions  in response Interim Report C, where the ALRC first suggested the FSL Schedule. Stakeholders were generally supportive of the proposal.

Some stakeholders commented on the structure of the proposed FSL Schedule, and others made suggestions about other licensing regimes that could be included in the Schedule.

Several stakeholders expressed a preference for the Financial Services Law to be enacted as a standalone Act, but in light of existing constitutional constraints were supportive of the proposed schedule.

For further discussion, see the ALRC’s background paper on ‘Reflecting on Reforms III — Submissions to Interim Report C’.

Is there a risk that people will think the provisions in the FSL Schedule are less important than the provisions in the body of the Corporations Act?

This was a concern that some stakeholders raised with the ALRC. At least one stakeholder raised a concern that putting the Financial Services Law in a schedule ‘may lead to a perception that financial services regulation is not deserving of a prominent place in our Australian laws’.

However, the FSL Schedule would not be the first instance of a regulatory scheme being contained within a schedule to an Act. Other examples include:

• The Australian Consumer Law, in Sch 1 to the Competition and Consumer Act 2010 (Cth). The location of the Australian Consumer Law in a schedule was driven by the legislation’s constitutional basis, like the FSL Schedule.
• The Criminal Code in a schedule to the Criminal Code Act 1995 (Cth).
• The National Credit Code in which is Sch 1 to the National Consumer Credit Protection Act 2009 (Cth) (‘NCCP Act’).
• The Insolvency Practice Schedule (Corporations) and Insolvency Practice Schedule (Bankruptcy) contained in, respectively, Sch 2 to the Corporations Act and Sch 2 to the Bankruptcy Act 1966 (Cth).

As discussed in Interim Report C, experience with the Australian Consumer Law suggests that its location in a schedule has improved, rather than detracted from, public awareness of the legislation.

What alternatives did the ALRC consider?

During the Inquiry, the ALRC canvassed several alternatives, such as:

• enacting the Financial Services Law as a standalone Act;
• consolidating similar and overlapping regulatory regimes currently spread across different pieces of corporations and financial services legislation (for example, the Corporations Act, NCCP Act 2009 (Cth), ASIC Act, and Superannuation Industry (Supervision) Act 1993 (Cth)); and
• inserting the Financial Services Law as a new chapter within the Corporations Act.

For discussion of these alternatives, see Chapter 8 of the Final Report.

Why did the ALRC not recommend a standalone Act?

The ALRC has not recommended a standalone Act or consolidation of regulatory regimes for two main reasons. First, doing so may go beyond the Terms of Reference for the Inquiry, including because it may involve questions of policy.

Throughout the Inquiry, several stakeholders suggested there should be a standalone Act relating to financial services. In part, these suggestions stem from the perception that Chapter 7 of the Corporations Act is like an ‘Act within an Act’ in terms of its length and scope (see Chapter 8 of Interim Report C for further discussion). Some stakeholders would also prefer financial services provisions to be in a standalone Act to emphasise how important financial services regulation is within Australian law.

Second, enacting one or more standalone Acts would appear to be possible only by reforming the existing constitutional basis for the Corporations Act. In brief, the current referral of matters from the States to the Commonwealth would not empower the Commonwealth to enact other (standalone) primary legislation relating to the regulation of corporations and financial services.

Nevertheless, should a standalone Act or consolidation of regulatory regimes be considered, the ALRC’s recommendations could provide a useful starting point for that legislation.

For discussion of the constitutional underpinnings of the corporations and financial services legislation, see the ALRC’s background paper on ‘Historical Legislative Developments’ and Chapter 5 of the Final Report.

Why did the ALRC not recommend a new chapter of the Corporations Act?

The ALRC has not recommended that the Financial Services Law be enacted as a new chapter to the Corporations Act (or, alternatively, the ASIC Act) for two key reasons. First, there is no obvious ‘home’ for the Financial Services Law within either Act. Second, a schedule (as opposed to a new chapter) can be used to create a clearer legislative ‘identity’ for the regulation financial services and to highlight common themes that traverse several chapters.

Is it pronounced ‘shedule’ or ‘skedule’?

This question prompts heated debate on the internet (and even divides some of the ALRC team), so we’ll stay out of this one.

Throughout the Corporations and Financial Services Legislation Inquiry, stakeholders emphasised the importance of staging the implementation of reforms and managing transition costs. This article explains the ALRC’s suggested approach for implementing the reformed legislative framework for financial services.

This is the fourth in a series of short pieces following the release of the ALRC’s Final Report relating to the legislative framework for corporations and financial services regulation. In an earlier article, we outlined the reformed framework and explained how users would navigate it.

Why devote a whole chapter of the Final Report to Implementation?

Implementing reform comes with challenges and risks, such as transition costs and a risk that the job is left only half done. Chapter 7 of the Final Report details the ALRC’s approach to implementation and explains how the reformed legislative framework could be implemented in a logical, staged way so as to realise the benefits of reform as early as possible, minimise transition costs, and reduce the risk of it being left incomplete.

In summary, the ALRC’s suggested approach has two main elements:

• a Reform Roadmap (which sets out six Reform Pillars to guide implementation); and
• Steps to Implementation (which detail how each Reform Pillar should be approached).

The Reform Roadmap and the Six Reform Pillars

The ALRC’s approach to implementing the reformed legislative framework is built on six Reform Pillars, shown in the following diagram:

The order of the Pillars is important. The Reform Roadmap is structured to realise the benefits of reform as early as possible.

• Pillar One (Consumer Protection) lays the foundation for future reforms. It does this by ensuring the legislation better communicates fundamental norms and frames the more specific obligations in later pillars.
• Pillar Two (Disclosure) would have a significant impact on reducing unnecessary complexity, with benefits for regulated persons, consumers, and investors.
• Pillar Three (Financial Advice) would bring together and consolidate the currently disparate provisions relating to financial advice, helping to reduce the costs of advice, support advisers to understand their obligations, and promote higher quality advice.
• Pillar Four (Other Regulatory Obligations and Licensing) would simplify the myriad regulatory obligations of financial services providers, and would complete the process of establishing a more navigable and comprehensible legislative framework.
• Pillar Five (Miscellaneous) would deal with reforms that are not captured by other pillars.
• Pillar Six (Policy-Evolving Provisions) provides a means of accommodating policy developments and policy reform alongside creation of the reformed legislative framework.

The ALRC recommends that the Reform Roadmap and implementation process be overseen by a specifically resourced taskforce (or taskforces) dedicated to that task (Recommendation 54). Taskforces are often used to implement reforms, drawing on expertise both within and outside government. Utilising a taskforce to implement reforms is an important way of minimising the challenges that confront any reform project.

Further detail about each of the Reform Pillars and taskforces is contained in Chapter 7 of the Final Report.

Steps to Implementation

Each Reform Pillar in the Roadmap would be implemented by following the six steps set out below:

In summary, the Steps to Implementation would involve:

• developing a clear understanding of the existing legislative framework and the design of the reformed legislative framework (Steps 1 and 2);
• looking at the bigger picture, to identify instances where targeted policy simplification could complement technical reforms to reduce legislative complexity (Step 3);
• applying best-practice principles of legislative design when preparing the legislation that implements the reformed legislative framework (Steps 4 and 5); and
• ensuring the reformed legislative framework is maintained into the future (Step 6), which should include periodic post-enactment review (Recommendation 55).

Chapter 7 of the Final Report contains further detail about the implementation process and explains the importance of ongoing legislative maintenance.

The ALRC used a number of analogies during the Corporations and Financial Services Legislation Inquiry to help explain our discoveries and conceptualise our insights about legislative complexity. We likened the law to a house, a cupboard, Russian dolls, and even outer space. Looking back, it often felt like we were on an archaeological dig, excavating layers of complexity when trying to understand the legislation we were meant to reform.

This infographic by ALRC Legal Officer/artist, Ellie Filkin, explores what that three-year archaeological dig looked like for the ALRC. It might resonate with some users of corporations and financial services legislation.

This is the third in a series of short pieces following the release of the ALRC’s Final Report relating to the legislative framework for corporations and financial services regulation. 

The Hon. Marcia Neave AO, and Judge Liesl Kudelka of the South Australian District Court will lead the ALRC’s Justice’s Response to Sexual Violence inquiry which was announced this week by Attorney General Mark Dreyfus KC MP. Both appointees bring with them deep expertise and experience of the justice system, particularly as it relates to issues involving sexual violence.

Hon. Marcia Neave AO

Marcia Neave has had a distinguished career having served as a judge, commissioner, law reformer, public policy maker, and academic. After nine years on the Supreme Court of Victoria, Court of Appeals Division, she was appointed to the role of Commissioner of the Victorian Royal Commission into Family Violence. In 2021 she was named as President and Commissioner of the Commission of Inquiry into the Tasmanian Government’s Responses to Child Sexual Abuse in Institutional Settings.

She was the inaugural Chair of the Victorian Law Reform Commission which in 2004 recommended substantial changes to criminal laws and procedures dealing with sexual assault. She has also been Professor at ANU, Adelaide, and Monash Universities.

Judge Liesl Kudelka

Judge Kudelka was appointed as a Judge of the District Court of South Australia in October 2017. She has 25 years of experience in the criminal jurisdiction as a judge, barrister, and prosecutor. 

In 2020, Judge Kudelka prepared a detailed written proposal for a pilot Priority Programme in the District Court of South Australia to improve justice responses for alleged victims of sexual assault and domestic violence by implementing new processes to reduce delays in proceedings. Judge Kudelka implemented the programme and has been managing it since May 2021.

Amongst her many professional achievements, Judge Kudelka was a prosecutor in the Office of The Director of Public Prosecutions in South Australia, as well as working on the discussion paper ‘Review of South Australian Rape and Sexual Assault Law’ in 2006. She also acted as Counsel Assisting ‘the Children in State Care Commission of Inquiry: Allegations of Sexual Abuse & Death from Criminal Conduct’ (SA) in 2007 – 2008. 

Marcia Neave AO (left) and Judge Liesl Kudelka (right) will lead the inquiry for the ALRC.

Inquiry into Justice Responses to Sexual Violence

The ALRC will take a take a trauma-informed, holistic, whole-of-systems, and transformative approach to its inquiry, whilst considering matters raised for reform and detailed in prior reports and inquiries.

The inquiry will consult with relevant stakeholders across Australia, including but not limited to:

• people who have experienced sexual violence.
• people and organisations representing population cohorts that are overrepresented in sexual violence statistics.
• state and territory government and law enforcement agencies.
• policy and research organisations.
• community service providers; and
• the legal profession including prosecution and defence lawyers.

The inquiry is due to provide its final report to the Attorney-General in January of 2025.

Further information on the work of the ALRC:  https://www.alrc.gov.au/

The existing legislative framework for financial services is unnecessarily complex and difficult to use. So how should it be improved?

This article briefly explores the reformed legislative framework for financial services legislation recommended by the ALRC in the Final Report of the Corporations and Financial Services Legislation Inquiry. It also illustrates the benefits of the reformed legislative framework by showing how it would be much simpler to navigate than the existing legislative framework.

This is the second article in a series of short pieces following the release of the ALRC’s Final Report. Revisit the first article here.

The existing legislative framework

Currently, if a person wants to use financial services legislation, they must wade their way through voluminous Acts, regulations, legislative instruments, and guides, with little indication as to what they can expect to find and where. Navigating the existing legislative framework is a bit like using a treasure map that has many paths, but no clear destination:

The reformed legislative framework

If implemented, the ALRC’s recommendations would transform the existing legislative framework into the reformed legislative framework.

The reformed legislative framework is intended to be clear, user-friendly, and easy to navigate:

• Users would start with the Financial Services Law Schedule (‘FSL Schedule’), where they would find key provisions including important obligations, prohibitions, offences, and penalties. The FSL Schedule would be enacted by Parliament, reflecting the significance of its contents.
• Users would then move to the single, consolidated Scoping Order. In the Scoping Order, users would find provisions that set the scope of the regulatory framework, such as exclusions.
• Users would then move to thematic Rulebooks, where they would find prescriptive detail about how to comply with obligations in the FSL Schedule.

Compared to the existing legislative framework, users would end their journey (where ‘x’ marks the spot) having followed a clearly defined path and without the need to consider whether any part of the law has been notionally amended by another piece legislation. Because the reformed legislative framework would be simple to navigate, it would also be easier for users to develop a clear understanding of their obligations or rights.

Each element of the reformed legislative framework is based on working principles for legislative design set out in the Final Report, all of which help to make the framework easier to navigate and understand:

• coherence;
• grouping thematically related provisions;
• intuitive flow;
• prioritisation;
• succinctness;
• consolidating similar provisions; and
• mental models.

Though directed at the legislation that governs financial services, the principles that underpin the reformed legislative framework could be applied to other legislation (especially complex legislation).

For more information, see the Final Report:

• Chapter 3 gives an overview of the reformed legislative framework;
• Chapter 4 discusses the ALRC’s working principles for legislative design that underpin the reformed legislative framework; and
• Chapters 5 and 6 set out the elements of the reformed legislative framework in more detail, discussing how the primary legislation should be restructured and reframed (Chapter 5) and make better use of the legislative hierarchy (Chapter 6).

Last week, the Final Report of the ALRC’s Corporations and Financial Services Inquiry was published. The Final Report laid out the results of three years’ work examining why the law is so complex and setting out how it should be reformed. In this article, we describe the ALRC’s journey from the Inquiry’s genesis through to next steps.

This is the first in a series of short articles following the release of the Final Report. Each piece aims to give a simple overview of the ALRC’s recommendations and important themes from the inquiry.

Where did we come from?

In 2019, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (also known as the Hayne Royal Commission) found that corporations and financial services legislation is overly complex and in need of simplification. In particular, the Royal Commission found that financial services legislation fails to communicate the fundamental norms of behaviour that it promotes.

Against this background, the Australian Government gave the ALRC Terms of Reference, which tasked the ALRC with making financial services and corporations legislation clearer and more understandable.

The ALRC’s analysis confirms that corporations and financial services legislation remains unnecessarily complex. The main sources of unnecessary complexity include:

• an incoherent legislative hierarchy;
• poorly designed primary and delegated legislation;
• issues with law-making processes and legislative maintenance;
• extensive use of notional amendments; and
• proliferating powers and instruments creating a legislative maze.

See Chapter 2 of the Final Report for more details.

Where are we now?

The ALRC consulted with a wide variety of stakeholders, including regulators, government departments, academics, legal professionals, and industry representative bodies. Stakeholders were given the opportunity to provide feedback and formal submissions in response to the ALRC’s preliminary proposals throughout the Inquiry. Stakeholders almost universally agreed with the ALRC that the existing legislation is complex and that it should be simplified.

The ALRC also produced groundbreaking new empirical data analysis, providing fresh insights into the causes and consequences of legislative complexity. The ALRC’s empirical analysis confirmed stakeholders’ anecdotal experience of complexity. Further detail about the ALRC’s data analysis is available on the ALRC Data Hub.  

Throughout the Inquiry, the ALRC published 12 Background Papers, and three Interim Reports.

The ALRC has now published its Final Report, which contains 58 recommendations for reform (23 of these recommendations were made in the three Interim Reports). These recommendations aim to simplify and rationalise corporations and financial services legislation, making it easier to use and understand.

Where to next?

Now that the Final Report has been published, the Australian Government will consider which of the ALRC’s recommendations should be implemented. Several recommendations made by the ALRC in Interim Reports A and B have already been implemented.

Chapter 7 of the Final Report sets out a staged process for implementing many of the recommendations. This staged process categorises the recommendations into six ‘Pillars’. See Chapter 7 of the Final Report for more details.

The ALRC has also recommended several measures to ensure that the recommendations have an enduring effect into the future. This includes the creation of guidance for legislative drafting, and a legislative data framework to monitor the development of corporations and financial services legislation.

The Australian Law Reform (ALRC) has begun its inquiry into the justice system’s response to sexual violence.

Attorney-General, the Honourable Mark Dreyfus KC MP, has referred the inquiry to the ALRC with the aim of strengthening and harmonising sexual assault and consent laws.

The referral asks the ALRC to promote and consider just outcomes for people who have experienced sexual violence, including minimising re-traumatisation.

The inquiry’s terms of reference require the ALRC to examine a range of issues including:

• Laws and frameworks about evidence, court procedures/processes and jury directions.
• Laws about consent.
• Policies, practices, decision-making, and oversight and accountability mechanisms for police and prosecutors.
• Training and professional development for judges, police, and legal practitioners to enable trauma-informed and culturally safe justice responses.
• Support and services available to people who have experienced sexual violence, from the period prior to reporting to the period after the conclusion of formal justice system processes.
• Alternatives to criminal prosecution, including restorative justice, civil claims, compensation schemes, and specialist court approaches.

The ALRC will take a take a trauma-informed, holistic, whole-of-systems, and transformative approach to its inquiry, whilst considering matters raised for reform and detailed in prior reports and inquiries.

The inquiry will consult with relevant stakeholders across Australia, including but not limited to:

• people who have experienced sexual violence.
• people and organisations representing population cohorts that are overrepresented in sexual violence statistics.
• state and territory government and law enforcement agencies.
• policy and research organisations.
• community service providers; and
• the legal profession including prosecution and defence lawyers.

The ALRC has been asked to provide its final report to the Attorney-General by 22 January 2025.

You can find the Terms of Reference for the inquiry here: https://www.alrc.gov.au/inquiry/justice-responses-to-sexual-violence/terms-of-reference/

Further information on the work of the ALRC:  https://www.alrc.gov.au/

The Australian Law Reform Commission Final Report, Confronting Complexity: Reforming Corporations and Financial Services Legislation (Report 141, 2023), was tabled in Parliament today by the Attorney-General, the Hon Mark Dreyfus KC MP.

The report found that the legislation governing Australia’s financial services industry is a tangled mess — difficult to navigate, costly to comply with, and unnecessarily difficult to enforce.

Judges have described the current laws as being like ‘porridge’, ‘tortuous’, ‘treacherous’, and ‘labyrinthine’. Others have described the legislation as ‘broken’. Complexity in the existing legislation is not an isolated problem — it costs businesses, consumers, investors, and the economy at large. The ALRC has made 58 recommendations to simplify the law, including a revamped legislative framework for the financial services sector. These reforms aim to reduce costs for service providers and consumers, improve productivity by reducing complexity, and provide clarity around compliance requirements and enforcement. Thirteen recommendations made during the Inquiry have already been implemented, in full or in part, by legislation passed during 2023.

Recommendations in the Final Report include:

• Redesigning financial services legislation to give it a clear home and identity as the ‘Financial Services Law,’ making it easier and less costly to find, navigate, and understand.
• Ending the use of almost invisible notional amendments that make the law deeply inaccessible, and instead using thematic, consolidated rulebooks to provide flexibility for regulating particular products, persons, services, or circumstances.
• Making it easier to tell when something is a ‘financial product’ or ‘financial service’ by introducing a single, simplified definition of both terms.
• Making offence and penalty provisions less complex and more obvious by consolidating them into a smaller number of provisions that cover the same conduct, making them easier to identify, and making the consequences of breach clear on the face of the law.

The report follows on from the findings of the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry in 2019 that exposed the deficiencies of the current legal infrastructure.

Complexity costs consumers not only in the expenses that are passed on by financial services providers, but by failing to protect them from misconduct. The Royal Commission clearly demonstrated the economic and human costs of non-compliance with the law. The ALRC’s reforms would strengthen consumer protection substantially and reduce costs for business by making the law simpler to comply with and easier to enforce.

QUOTES — Justice Mordy Bromberg, President of the ALRC

‘Australia’s laws governing financial services are a confusing maze and need to be overhauled. The reforms outlined in this report will make these laws easier to understand and navigate, drive down the costs associated with complying with the law, and make it easier for consumers to understand and enforce their rights.’

‘These laws provide the legal and economic infrastructure of the financial services industry. The reforms we’re proposing are broadly supported by stakeholders and if implemented will see substantial improvements for both consumers and business.’

ENDS

Download the Final Report

Download the Summary Report

About the Australian Law Reform Commission

The Australian Law Reform Commission (ALRC) is an independent Australian Government agency that provides recommendations for law reform to Government on issues referred to it by the Attorney-General of Australia.

Final Report submitted

On 30 November 2023, the Final Report of the ALRC’s Corporations and Financial Services Legislation Inquiry was submitted to the Attorney-General. Thank you to everyone who contributed during the Inquiry. We look forward to participating in public discussions on the ALRC’s recommendations in due course.

Article: The regulatory challenges of evolving technology and financial services law

As the Corporations and Financial Services Legislation Inquiry concludes, Dr Vannessa Ho, ALRC Legal Officer, looks to the future and asks: in an ever-evolving technological landscape, what will be the next challenge for financial services law?

This short article explores some recent innovations — such as ‘robo-advice’ — and the regulatory challenges that future developments pose in the context of financial services law.

How time flies: You’re almost 23, Corporations Act

In 2021, the ALRC marked the 20th birthday of the Corporations Act. As the Act approaches its 23rd birthday in 2024, revisit the light-hearted dialogue in which a mother and father implore their son (the Corporations Act) to grow up.

Final Report update

The ALRC is due to submit its Final Report to the Attorney-General by 31 December 2023. Thank you to the many people and organisations that made submissions, completed the survey, and participated in consultations during the Inquiry into Religious Educational Institutions and Anti-Discrimination Laws.

Background Papers

The ALRC has published two Background Papers that provide a high-level overview of topics of relevance to the Inquiry, including key principles and areas of research that underpin the development of recommendations.

International Comparisons (ADL1)

Around the world, jurisdictions have grappled with the problem of how best to maximise realisation of all human rights in the context of religious educational institutions. Different jurisdictions have dealt with this issue in different ways, which has led to a variety of legal approaches. This Background Paper discusses the application of anti-discrimination law to religious educational institutions from a comparative law perspective. The laws of five foreign jurisdictions are examined, including the European Union, England and Wales, the Republic of Ireland, New Zealand, and Canada.

What We Heard (ADL2)

This Background Paper aims to reflect what the ALRC heard from a wide range of stakeholders during its Inquiry into Religious Educational Institutions and Anti-Discrimination Laws. The Background Paper includes an overview of the Inquiry approach, including the methodology adopted to create an evidentiary base for the ALRC’s recommendations, and an analysis and discussion of key themes and interrelated issues which emerged from consultations, submissions, and survey responses.

Webinar

Maximising rights in religious educational institutions: International perspectives

In August 2023, the ALRC and Wolters Kluwer hosted a webinar to hear from international human rights experts on how to best maximise the realisation of all rights in the context of religious educational institutions.

Speakers included former UN Special Rapporteur on freedom of religion or belief, Professor Heiner Bielefeldt (University of Erlangen-Nuremberg), Professor Lucy Vickers (Oxford Brookes University), and Professor Carolyn Evans (Griffith University). The discussion centred on what happens when rights to non-discrimination and religious freedom interact, and how limitations on rights are managed in the context of religious educational institutions, internationally.

Season’s greetings

The ALRC expresses its gratitude to everyone who has contributed to and engaged with the ALRC’s work in 2023. Best wishes for a safe festive season and a happy new year.