In this Funds Update for 19 January 2024:
ALRC publishes final report on corporations and financial services legislation reform
On 18 January 2024, the Australian Law Reform Commission (ALRC) published Confronting Complexity: Reforming Corporations and Financial Services Legislation (Final Report), building on the three interim reports published by the ALRC since 2020.
The Final Report and the interim reports together make 58 recommendations that aim to transform the current corporations and financial services legislation to a more adaptive, efficient, and navigable legislative framework.
The additional recommendations contained in the Report include:
- restructuring and reframing corporations and financial services legislation to enhance navigability and comprehensibility;
- working principles should be applied when designing and drafting definitions in corporations and financial services legislation;
- grouping and (where relevant) consolidating provisions of general application relating to the same subject area, including consumer protection, financial advice, financial services providers, financial services licensee obligations;
- amendment of s12CB of the Australian Securities and Investments Commission Act 2001 (Cth) to expressly provide that it encompasses unconscionability;
- change to the 'clear concise and effective' requirement of disclosure documents to a requirement for documents to be presented 'in a way that promotes understanding of information';
- a general power in ASIC to provide individual relief from provisions of Chapter 7 of the Corporations Act 2001 (Cth); and
- a requirement that financial services law and delegated legislation be periodically reviewed by an independent reviewer.
The Report also recommends that the Australian Government establish a specifically resourced taskforce dedicated to implementing reforms to financial services legislation.
The Report was tabled in Parliament on 18 January 2024 and forms the final report in the ALRC's inquiry into the "Legislative Framework for Corporations and Financial Services Regulation", which we have reported on in our previous Funds Updates of 11 September 2020, 1 December 2021 and 1 July 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
