The complexity and prescriptiveness of Australian financial services laws makes it harder for businesses to meaningfully comply with the law, affecting businesses and consumers.
The Australian Law Reform Commission (ALRC) has been tasked by the Attorney-General of Australia the Hon Christian Porter MP with simplifying the legislative framework for corporations and financial services regulation. (See the Inquiry terms of reference.)
Key problems identified by the ALRC in its initial analysis of Australian financial services laws include:
- overly prescriptive approach to regulation;
- complex and unwieldy regulation, contained in various instruments;
- complexity of definitions; and
- inconsistent use of definitions.
Read further about the complexity in Australian Financial Services Laws including examples of the issues identified.
The Inquiry is part of the Government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released in February 2019.
President of the ALRC, the Hon Justice SC Derrington, said the intricacy of the current financial services laws obfuscates understanding and inhibits compliance.
“The Inquiry is a once in a generation opportunity to ensure that the design of Australian financial services legislation is appropriate, both in terms of ensuring that industry players comply with the law and in promoting productivity and innovation in the financial sector,” Justice Derrington said.
The ALRC will deliver interim reports on the review of corporations and financial services regulation in November 2021, September 2022 and August 2023, with the final report and recommendations due to be provided by 25 November 2023.
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