Fund Regulatory Update

ME Bank banking licence cancelled after acquisition

Members Equity Bank (ME Bank) has had its authorised deposit-taking institution (ADI) licence revoked by the Australian Prudential Regulation Authority (APRA) after the acquisition of ME Bank by Bank of Queensland in July 2021. ME Bank’s assets and liabilities were transferred to BOQ.

Aware fined for fees for no service

Aware Financial Services, at the time StatePlus, has taken a huge penalty of $20 million for charging 25,000 customers fees for no financial services between August 2014 and June 2018. Around $50 million in fees was charged, with over 17,000 customers advised in writing that they would receive financial advice reviews, with nearly 8,000 entering into ongoing advice service arrangements. These services were never provided.

ASIC proposing to lower consumer compensation threshold from $20 to $5

The Australian Securities and Investments Commission (ASIC) has proposed lowering the threshold of consumer compensation from $20 to $5, meaning licensees need to contact customers if remediation is over $5. Critics say this low threshold will cause extra administration for licensees, with unclaimed monies across the industry.

ASIC has countered this with its proposal that if a former customer is owed $5 or less after interest with no current payment information on file, that after making attempts to reach the customer, it would be appropriate for the licensee to donate the money to a charity.