Risk Regulatory Update
/APRA’s updated corporate plan published
The Australian Prudential Regulation Authority (APRA) has an updated plan for the insurance, banking and superannuation industries to ensure its financial soundness. The plan for 2022-2023 will be implemented across the coming four years with the theme ‘protecting the community today, prepared for tomorrow’.
The plan states that APRA will preserve resilience of insurers, banks and super funds, modernise prudential architecture so it remains fit for purpose into the future, while enabling data-driven decision-making by APRA stakeholders.
APRA will focus on the evolving financial landscape, help find solutions to difficult challenges, and adopt the latest tools, techniques and practices, while having a modern, highly skilled and flexible working environment.
HJ Shortland & Co Wealth Management licence suspended
The Australian Securities and Investments Commission (ASIC) has suspended the licence of HJ Shortland & Co Wealth Management Pty Ltd for six months as it was not carrying on a financial services business. The sole director, Harris Shortland, is in prison, thus unable to run the business. Shortland has lodged an appeal against his conviction, with ASIC suspending the licence temporarily as the legal process takes place.
ASIC’s first DDO stop order on three companies
ASIC has issued its first three stop orders on three companies for deficiencies in their product target market determination. The powers are new under the design and distribution obligations, with interim stop orders on Responsible Entity Services (RES) Limited and two UGC Global Group companies, UGC Global Alpha Limited and UGC Global Alpha Fund Limited.
RES is not permitted to issue interests in PPM Units, a class of interests in RES Investment Fund, or provide a product disclosure statement about PPM Units or provide general advice to retail clients recommending PPM Units for 21 days. ASIC said the product’s TMD included two categories of retail investors for whom investment in the product would not have been consistent with their needs and objectives.
PPM stands for Pleasure Point Mine, with the sole underlying asset of the PPM Unit a loan to a related RES company to develop a sandstone quarry. This, ASIC says, makes it a high-risk illiquid, unlisted single asset investment and the return on an investor’s funds and any interest payable under the loan is completely dependent on the borrower’s ability to repay the loan. There is now a sto order on RES to avoid misleading or deceptive statements about the product, should an investor obtain a stake in the Pleasure Point Mine.
The stop orders against the UGC Global companies stops them dealing in shares in relation to retail investors, giving out product disclosure documents or product advice in relation to shares to retail investors. ASIC raised concerns over prospectuses and disclosures within them and possible harm to consumers.
