Major laws hit parliament | Financial standard
Two major pieces of legislation have been tabled in parliament, including the last resort compensation scheme.
The program facilitates repayment of up to $ 150,000 to compensate consumers affected by poor personal advice, credit intermediation, securities trading and the granting of credit if their business fails with l ‘Australian Financial Complaints Authority.
Federal Treasurer Josh Frydenberg wants the CSLR to start as soon as possible so that it can start paying claims from July 1, 2022.
The government will initially fund the program in the first year, but will ultimately be fully funded by industry through a levy.
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Frydenberg said his government would continue to consult stakeholders on the legislation. It will also consult on proposals to improve the effectiveness of professional liability insurance in responding to claims.
The Financial Planning Association of Australia has said that advisers’ IP assurance in relation to the scheme appears problematic.
The FPA said individual liability – in this case ensuring that adequate and appropriate professional indemnity coverage is in place for licensed financial planners – should be the first line of defense in dealing with consumer compensation. .
In the past nine years, no action has been taken to monitor insurance coverage in the profession and ensure that it is adequate to provide the legally required protection for clients, the association said.
FAR extends the executive banking liability regime to all entities regulated by APRA, which will be jointly administered by APRA and ASIC.
FAR increases accountability in banking, insurance and pensions and will improve governance of these entities, Frydenberg said.
The banking industry can expect the FAR to begin on July 1, 2022 or six months after the legislation comes into force.
For the insurance and pension sectors, it will apply from July 1, 2023 or 18 months after the entry into force of the legislation.