Gadens Regulatory Recap – 4 April 2024

This edition of the Gadens Regulatory Recap highlights recent developments from ASIC, APRA, ACCC, the OAIC, and the ATO, including various enforcement actions taken by the regulators. 

ASIC 

1. New legislative instrument issued by ASIC extends relief for exchange traded funds: On 18 March 2024, the Australian & Investments Commission (ASIC) released new legislative instrument ASIC Corporations (Relief to Facilitate Admission of Exchange Traded Funds) Instrument 2024/147 to extend the relief previously granted by [CO 13/721] ASIC Corporations (Relief to facilitate quotation of exchange traded funds on the AQUA Market, which was due to sunset on 1 April 2024, to a broader class of quoted fund, not limited to those which track an index. The new legislative instrument follows recent ASIC consideration of submissions made in response to Consultation Paper 374 Remaking ASIC class order on exchange traded funds [CO 13/721].
   
2. Greenwashing and climate reporting guidance for small businesses: ASIC has released guidance for small businesses for climate reporting and greenwashing.  

Mandatory climate reporting 

The government is proposing to introduce mandatory climate reporting laws for financial institutions and large businesses, requiring annual disclosure regarding climate-related financial risks, plans, opportunities and strategies.  

The reporting requirements will be phased in across three business groups with the first two groups including Australia’s largest businesses and financial institutions, and the third group including businesses that meet at least two of following criteria: 

• consolidated gross assets of $25 million or more;  
• consolidated revenue of $50 million or more; and 
• employees numbering 100 or more.  

Most Australian small and medium businesses will not fall into a mandatory reporting category under the proposed laws. Small businesses however may form part of a supply chain of a larger business and therefore may need to engage with climate reporting considerations at that time.   

Greenwashing 

Separately, ASIC highlighted its guidance regarding greenwashing, particularly with claims made about a product being environmentally friendly, sustainable or ethical, when it is not, as a form of misleading and deceptive conduct. With greenwashing as an enforcement priority for ASIC in 2024, ASIC has taken recent action in several cases where:  

• the scope of application of an investment screen or exclusion was vague or overstated in the PDS or website;  
• there was no reasonable basis for listed companies to describe their operations, products or projects as ‘green’, ‘clean’ or ‘carbon neutral’; and 
• financial products or managed funds were not ‘true to label’ and related terms were inconsistent with investments made by the fund. 

ASIC’s Report 763 considers its most recent greenwashing interventions.  

3. ASIC address regarding the regulation, innovation and policy concerning crypto and digital assets: On 20 March 2024, ASIC Commissioner Alan Kirkland delivered an address as part of Blockchain APAC’s Policy Week, as an update on ASIC’s approach to regulation and enforcement of crypto and digital assets. A summary of the Commissioner’s key points is below.  

Currently, a business operating and engaging in digital assets is obliged to satisfy itself as to whether it is required to obtain appropriate licences and complies with all legislative requirements.  ASIC has several tools to assist businesses in determining whether a particular crypto asset or related product is a financial product as follows:  

• guidance contained in the ASIC – Information Sheet 225 – Crypto-assets;  
• access to the Innovation Hub; and  
• access to the ASIC Enhanced Regulatory Sandbox.  

Moving forward, ASIC is continuing to work on proposed frameworks for regulating digital asset platforms which would include incorporating these frameworks within existing financial services frameworks.  The proposed regulatory reform and frameworks follow on from Treasury’s consultation on crypto asset secondary service providers in March 2022, token mapping in February 2023, digital asset platforms in October 2023 and Central Bank Digital Currency tokenisation trial in March – July 2023. Overarchingly, the proposals are underpinned by ASIC’s three core objectives:  

• consumer protection; 
• market integrity; and  
• encouraging financial innovation. 

With the core objectives at the heart of ASIC’s approach to crypto and digital assets, the Commissioner has expressed its desired outcome is to provide a clear set of rules that maintain market integrity and mitigate the risks to consumers and investors, while also promoting compliance with rules to enable ASIC to enforce them effectively. 

4. ASIC enforcement activities: In what has been a busy fortnight, ASIC has engaged in a variety of enforcement activities. 

ASIC cancelled the Australian financial services licence  (AFSL) of Crown Wealth Group Pty Ltd after it was placed into voluntary administration, and of Endeavour Securities (Australia) Ltd (In Liquidation), as the company is insolvent, under administration, and in the process of being wound up. 

ASIC has permanently banned Mr Brian Creigh from providing financial services or being involved in a financial services business after a finding that the Panaea Capital Cryptocurrency Investment Fund was operated by Mr Creigh while unlicensed, and that Mr Creigh purported that the fund was authorised under an AFSL when it was not. ASIC also found that Mr Creigh was not adequately trained and failed to identify warning signs that he was dealing with potential scammers while operating the fund. A permanent ban was also issued in relation to Mr Shane Rose, with ASIC finding that Mr Rose engaged in dishonest conduct by using client invested funds for purposes other than that which the funds were provided. 

As part of an investigation into the role and involvement of current and former directors in the collapse of the 27 companies in the Mansa Group, ASIC has obtained travel restraint orders preventing the directors from leaving Australia. Interim travel orders have also been obtained against the managing director and CEO of Dubber Corporation Limited, and a solicitor, in relation to an investigation commenced relating to suspected misuse of term deposit funds. 

Following a finding of guilt in December, a former director of Bellamy’s Australia Ltd, Ms Janet Cameron, has been convicted and ordered to pay a fine of $8,000 for one count of failing to lodge a substantial holder notice regarding interests held, and one count of making a false and/or misleading statement to ASIC. The matter was prosecuted by the Commonwealth Department of Public Prosecutions following an investigation by ASIC. 

On 26 March 2024, a former corporate adviser, Mr Cameron Waugh, was sentenced to two years imprisonment for insider trading offences, in breach of section 1043A(1) of the Corporations Act 2001 (Cth) (Corporations Act). The former Continental Coal Company secretary, Ms Jane Flegg, was sentenced to a period of more than four years imprisonment with respect to breaches of the Corporations Act and the Criminal Code (WA). Gadens has previously covered the guilty pleas of Mr Waugh and Ms Flegg.  

ASIC has commenced the first prosecution against a director of a company for failure to comply with their obligation to have a director identification number, in breach of section 1272C(1) of the Corporations Act. The Court relevantly granted a non-publication order, preventing the identification of the director in question. 

The Federal Court has ordered Holista Coltech Ltd to pay a penalty of $1.8 million for breaches of continuous disclosure obligations and misleading representations regarding the sales of a sanitiser product. ASIC’s investigation determined that Holista made misleading representations about its product, NatShield, including that it was effective against COVID-19. In her finding, Justice Derrington indicated that the failure to provide continuous disclosure caused harm to shareholders and investors, stating that “Holista’s conduct had significant consequences for its financial position, and so for its investors, after the corrective disclosure.” 

On 19 March 2024, Mr David Sipina pled guilty to two criminal charges relating to his involvement in the Courtenay House group of companies. Mr Sipina pled guilty to one count of carrying on a financial services business without an AFSL pursuant to section 911A of the Corporations Act, and one count of dealing in the proceeds of crime worth $1 million or more pursuant to section 400.3(1) of the Criminal Code. Mr Sipina is the third person to enter a guilty plea relating to Courtenay House, which offered returns to investors based on certain representations made about the trading of funds, with ASIC alleging that the group operated as a Ponzi scheme. 

The Full Federal Court dismissed an appeal by Provide Nominees Pty Ltd (Provide) relating to a notice issued by ASIC under section 33 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) to produce documents. Section 70 of the ASIC Act allows ASIC to seek orders from the Court requiring production, in circumstances where a person fails to comply with a request. Provide alleged that ASIC failed to include the words “without reasonable excuse” when certifying that failure to provide the documents had occurred. Provide has since filed an application for special leave to appeal to the High Court with respect to the decision of the Full Federal Court. Provide Capital also filed an application to dismiss further investigation by ASIC, which was thrown out by the Federal Court with no prospects of success. Provide Capital was ordered to pay ASIC’s costs. 

On 28 March 2024, the Federal Court made a finding that Vanguard Investments Australia made misleading claims about environmental, social, and governance exclusionary screens that applied to investments in an index fund. Justice O’Bryan found that Vanguard contravened the ASIC Act numerous times with respect to public representations made about the ‘Vanguard Ethically Conscious Global Aggregate Bond Index Fund.’ This case represented ASIC’s first greenwashing outcome, with the Court to consider penalties later this year. 

Finally, twelve counts of dishonest conduct in the course of carrying on a financial services business have been laid against the former financial adviser David Valvo for his conduct while running the related company Your Financial Freedom Pty Ltd. Between 23 July 2019 and 15 January 2020 it is alleged that David Valvo knowingly completed and submitted false fee withdrawal forms for twelve of his clients’ Wealthtrac superannuation accounts, totalling approximately $110,000. Each criminal charge under s 1014G of the Corporations Act 2001 (Cth) faces a maximum penalty of 15 years imprisonment. ASIC has previously ordered the freezing of assets of David Valvo and the business on 5 July 2023.  

5. Keynote Speech delivered by ASIC Chair Joe Longo at the AICD Australian Governance Summit 2024 regarding directors’ duties: ASIC Chair Joe Longo delivered a keynote speech at the Australian Institute of Company Directors (AICD), Australian Governance Summit on 21 March 2024. The address titled “Being a director isn’t meant to be easy” challenged the conception that it is impossible for directors to comply with their obligations amongst an everchanging regulatory environment. Directors, through their businesses, are encouraged to put customers’ best interests first, act with integrity, demonstrate that they’re not just trying to make a profit, and are doing the right things by their employees and local community.  

Using a principles-based approach, reasonable reliance by the board on the advice of senior management, and reasonable reliance by directors on their general counsel or CFO will assist with a reasonable likelihood of compliance with directors’ duties. The address included four important questions for directors to consider as part of compliance with their duties:  

• are you putting the company first?
• are you acting honestly? 
• are you challenging management to ensure your understanding is evidence based? 
• are you obtaining trusted professional advice?  
• are you continuously curious to understand all aspects of the company’s core business and associated risks?

6. ASIC issues reminder to financial advisers of their ongoing registration obligations: ASIC has issued a reminder to AFS licensees that provide personal financial product advice to retail clients to ensure that they have complied with the new registration requirements that recently came into effect on 16 February 2024. 

As per Information Sheet 276, the new requirements for registration with the Financial Advisers Register are being implemented in two stages: 

• stage 1 commenced on 16 February 2024, and requires affected AFS licensees to register details of directors and employees (other than provisional staff) that they have authorised to provide personal financial product advice to retail clients; and 
• stage 2 is expected to commence no later than 1 July 2026, and will require affected AFS licensees to also register themselves. 

7. Consultation paper seeks feedback on proposed changes to Regulatory Guide 258 “Registered liquidators: Registration, disciplinary actions and insurance requirements” by 2 May:  As previously noted in our last Gadens Regulatory Recap, on 8 March 2024, ASIC released Consultation Paper 376 (CP376) and is seeking feedback from stakeholders on proposed updates to Regulatory Guide 258 “Registered liquidators: Registration, disciplinary actions and insurance requirements” (RG258).  

The proposed amendments to RG258 seek to streamline RG258 in line with the legislative changes to the insolvency framework that commenced in 2021 under the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth) and the Insolvency Practice Rules (Corporations) Amendment (Corporate Insolvency Reforms) Rules 2020 (Cth). 

The changes to RG258 include providing more detailed comprehensive guidance on: 

• each separate category of registered liquidator following the introduction of a new ‘restructuring practitioner’ liquidator category under the 2021 reforms; 
• ongoing obligations of registered liquidators; 
• relevant experience requirements for registered liquidator applicants and New Zealand insolvency practitioners; and 
• disciplinary actions. 

Comments on the CP376 close on 2 May 2024 with the updated version of RG258 expected to be released in the 3rd quarter of 2024. 

8. Five class orders that are due to expire in April have been remade by ASIC:  ASIC has created new legislative instruments to replace the following five class orders for managed funds that are due to expire on 1 April 2024: 

• [CO 13/1200] – Periodic statement relief for AQUA quoted and listed managed investment scheme issuers is replaced by ASIC Corporations (Periodic Statement Relief for Quoted Securities) Instrument 2024/14; 
• [CO 13/1406] – Land holding for primary production schemes is replaced by ASIC Corporations (Land Holding for Primary Production Schemes) Instrument 2024/15; 
• [CO 13/1409] – Holding assets: Standards for responsible entities is replaced by ASIC Corporations (Asset Holding Standards for Responsible Entities) Instrument 2024/16; 
• [CO 13/1410] – Holding assets: Standards for providers of custodial and depository services is replaced by ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17; and 
• [CO 13/1621] – Exemption and declaration for the operation of mFund is replaced by ASIC Corporations (mFund) Instrument 2024/18. 

Each legislative instrument remakes the corresponding class order in substantially the same form and will remain in force until 1 April 2029. 

9. Operation of the Parent Entity Financial Statements and Auditor Independence instruments extended: On 27 March 2024, ASIC extended the operation of the parent entity reporting and auditor independence legislative instruments by issuing the ASIC Corporations (Amendment) Instrument 2024/187 to extend relief for an additional five years, with the expiration of the Principal Instruments on 1 April 2024 and 30 April 2024 respectively:  

• ASIC Corporations (Parent Entity Financial Statements) Instrument 2021/195; and  
• ASIC Corporations (Auditor Independence) Instrument 2021/75.  

Other amendments to the Principal Instruments include the provision of the same relief to registrable superannuation entities that is currently granted to registered managed investment schemes, companies and other disclosing entities.  

APRA

10. APRA Executive Director of Insurance Speech at Future of Insurance conference 2024: APRA Executive Director of Insurance Sean Carmody discussed the long-term sustainability of insurance at the Future of Insurance 2024 conference on 18 March 2024. The crucial role of insurance was discussed in the face of challenges such as increasingly damaging severe weather events, cost-of-living stress, and rising premiums possibly barring certain parts of the population from accessing cover in the future.  

Of note, there is a growing ‘protection gap’ with insurance premiums for motor and household rising by 16.3 per cent in November 2023 and the Climate Council expecting as many as 1 in 25 Australian homes to be uninsurable by 2030. A range of actions that insurers can take to help confront these challenges and meet the needs of the community included: 

• Mitigate risk by developing a range of product solutions: 
  • Risks associated with challenges such as natural disasters require system-wide solutions involving collaboration by various parties, including various levels of government, regulators, industry bodies and policyholders. 
  • These risks cannot be addressed by insurers on their own and require collaborative approaches utilising relevant skills and industry knowledge.  
• Ensure customers clearly understand the risks, products and choices available through trust and transparency: 
  • This is a multi-layered concept, and where there is trust, insurers can provide effective guidance to individuals on how to increase the resilience of their own home.  
  • Customers must be able to trust that insurers are recommending the correct level of cover, and not merely attempting to increase their premium.  
  • Commitment to transparency when communicating with customers is a critical part of achieving this goal, which in insurance includes:  

• • • the factors which drive consumer premiums;  
    • what is and is not covered by a policy;  
    • how insurers use information provided; and  
    • which mitigation actions by consumers will or will not contribute to premium reductions.  
• Design sustainable products that work for both insurers and the customer:  
  • The protection gap can be reduced through product innovation. 
  • APRA challenges insurers to take action to ensure that products are sustainable, including through: 

• • • ensuring the target market of their products is clear and is reaching the audience the product was designed for;  
    • demonstrating value to the community in their service and product and design; 
    • practice fair and clear pricing;  
    • regularly review products to bring in line with changing consumer needs facilitated by simplified processes and products; 
    • provide accessible product disclosures that are not over-detailed and clear; and 
    • promote a clear, empathetic, open, fair and speedy claims process.

11. APRA Member’s remarks to COBA CEO and Director Forum: In a recent speech at the Customer Owned Banking Association CEO and Director Forum, APRA Member Therese McCarthy Hockey outlined APRA’s priorities on areas relevant to the mutual banking sector. Member Hockey noted that APRA continues to place an emphasis on enhancing banks’ resilience against operational and financial risks. This has been a key theme in public statements from the regulator since the release of Prudential Standard CPS 230 (Operational Risk Management) in July 2023, particularly in light of the increasing challenges faced by banks, including cyber threats and the rapid evolution of digital banking technologies.  

Of most interest to banking members will be the comments that APRA has been working on reducing the regulatory burden on the banking sector and enhancing proportionality where it’s safe to do so. Member Hockey acknowledged that this regulatory burden is significant, particularly with the introduction of the Financial Accountability Regime (FAR) and Banking Executive Accountability Regime (BEAR).  

APRA will engage with industry from the middle of 2024 to help inform their thinking on these policies. 

12. APRA Chair’s Speech at the AFR Banking Summit 2024: APRA Chair, John Lonsdale, discussed the current environment of heightened financial risk and the importance of industry-specific stress tests in his speech to the AFT Banking Summit on 26 March 2024. Through APRA and industry-specific stress testing, and enhanced risk foresight, the world will obtain an increased awareness of linkages and potential exposures across the financial system. 

APRA plans to launch its first financial system stress test in 2025 to better its response to systemic risks and identify “blind spots”. The US Federal Reserve and Bank of England are similarly exploring novel stress-testing exercises. APRA recommends that banks expand the scope of their stress testing capabilities to be better prepared to respond to financial or operational threats. APRA will continue to engage with banks on the authorised deposit-taking institution (ADI) stress test, which will take place from mid-May through to the end of July 2024.  

Operational resilience remains a focus for APRA given recent cyber incidents, particularly given the financial sector’s operation depends on non-financial industries. The prudential standard CPS 230 Operational Risk Management (CPS 230) was released in July 2023 to assist banks, insurers and superannuation trustees with management of operational risks and their response to business disruptions. Importantly, CPS 230 does not make banks, insurers or superannuation trustees responsible for telecommunication/electricity outages or similar scenarios, but requires such institutions to consider these scenarios when identifying critical operations and developing business / customer impact minimisation plans.  

The final version of the prudential practice guide is expected to be released by mid-2024. While the guide will provide implementation expectations, there are steps institutions can take to prepare for the new standard, including: 

• focusing on critical operations, including by understanding and protecting the areas with the most significant impact in the event of their failure, to understand the purpose of CPS 230;  
• taking logical steps to understand its critical operations, then connecting to material service providers (before defining tolerances); and 
• focusing on the capabilities required to deliver the regulatory change for CPS 230.  

13. Super fund expense data to be published by APRA from August 2024 onwards: On 27 March 2024, APRA announced that from August 2024 onwards they will publish data that provides details on how members’ funds are spent and invested by trustees through their Superannuation Data Transformation project. The data will include:  

• a breakdown of expenses for the whole industry and each fund by categories such as administration and executive remuneration; and  
• recipients of payments that funds make in relation to marketing, sponsorship, and political donations to industrial bodies and related parties will also be published.  

This announcement follows a consultation with key industry stakeholders in 2023 where APRA sought feedback on whether the data it collects should be treated as ‘non confidential’ and publishable. A copy of APRA’s response to feedback received during this consultation contains a summary of their final positions and is now available on APRA’s website. 

ACCC  

14. ACCC proposal to authorise Australian banks and other parties’ discussions to support the cash-in transit industry: On 20 March 2024, the ACCC issued a draft determination proposing a grant of authorisation with conditions to the Australian Banking Association (ABA) and related participants to discuss and develop inprinciple agreements about an industry response to challenges of cash in transit services.  

Following concerns by Armaguard regarding the sustainability of the cash transport, management and processing industry, authorisation was sought to enable ABA, its member banks and industry participants to develop arrangements for ongoing provision of cash.   

The implementation of any agreed industry response or solution will require a separate application for ACCC authorisation. Submissions in response to its draft determination close on 10 April 2024, after which ACCC will make a final decision.  

15. Keynote address delivered by ACCC Chair Gina Cass-Gottlieb at the AFR banking Summit 2024: Keynote address at AFR Banking Summit 2024 | ACCC  

On 26 March 2024, ACCC Chair Gina Cass-Gottlieb delivered the keynote address at the AFR Banking Summit 2024, which focused on the heightened need to protect, assist and inform consumers in economically turbulent times. The address highlighted the significant impact of cost-of-living pressures and outlined the recent work and thinking of the ACCC in the following areas: 

• the retail deposits inquiry; 
• the importance of continued monitoring of home loan and deposit markets;  
• the Consumer Data Right and its continuing role in improving consumer outcomes;  
• the importance of continued enforcement work across financial services competition and CDR;  
• cash in transit;  
• the ANZ and Suncorp merger;  
• merger reform and its importance to more competitive financial markets; and 
• bank and scam protection.  

ATO 

16. Speech delivered by Assistant Commissioner Justin Micale at the Tax Institute Superannuation Intensive 2024: On 27 March 2024, the ATO Assistant Commissioner Justin Micale delivered a speech discussing the current risk of illegal early access of superannuation at the Tax Institute Superannuation Intensive. Earlier on 22 February 2024 the ATO released its findings of a new program which tracks the extent and scale of superannuation that is illegally accessed from self-managed super funds (SMSFs).  

Approximately $635 million in superfunds left the systems illegally across 2020 and 2021, with $380 million illegally withdrawn by trustees. These figures do not consider the funds used for prohibited loans in SMSFs, another concern to the ATO, which is estimated to be at $200 million for the same period.  The Assistant Commissioner discussed ATO’s role as regulator, the risks this issue presents to the SMSF sector, and how it can be addressed. 

The negative impacts of early withdrawal of superannuation funds includes increased reliance on taxpayer-funded pensions, wider community impacts and financial and other implications imposed on trustees who illegally access benefits. During 2024, 374 trustees have already been disqualified, compared with 751 disqualifications in 2023. The ATO is focussing on implementing further preventative measures and has expressed concern that disqualification and withdrawal figures will increase given the current economic climate.  These measures include new support and guidance products, education courses, and continuing new registrant reviews.    

OAIC 

17. Australian Information Commissioner delivers opening statement to the Legal and Constitutional Affairs Legislation Committee: On 19 March 2024, Australian Information Commissioner Angelene Falk delivered an opening statement to the Legal and Constitutional Affairs Legislation Committee on the new three Commissioner model with the appointment of Elizabeth Tydd as Freedom of Information Commissioner and Carly Kind as Privacy Commissioner. The depth of expertise added with such appointments was highlighted in the opening statement, along with the increases in privacy complaints, notifiable data breaches and applications for Information Commissioner review of FOI decisions. The overall change in OAIC’s resourcing needs was addressed, including the strategic review undertaken in October 2023 and February 2024, with an implementation plan foreshadowed for April 2024.  

Legislative Updates 

18. Public Hearing held for inquiry concerning Bank closures in regional Australia: On 25 March 2024, the Senate Standing Committee on Rural and Regional Affairs and Transport held a public hearing in Canberra examining the matter of the current extent of bank closures in regional Australia. The matter was referred to the Rural and Regional Affairs and Transport References Committee for inquiry and report on 8 February 2023.  

Broadly, the inquiry focused on:  

• the economic and welfare impacts of bank closures on customers and regional communities;  
• the branch closure process, including the reasons given for closures; 
• the effectiveness of government banking statistics covering and reporting regional service levels, including the Australian Prudential Regulation Authority’s authorised deposit-taking institutions points of presence data;  
• the effect of bank closures or the removal of face-to-face cash services on access to cash; and 
• considerations of solutions, and any related matters. 

Public hearings began on 2 May 2023. The committee is due to report by 16 May 2024. 

19. Parliamentary inquiry into wholesale investor and wholesale client tests inviting written submissions: Written submissions are now open to the Parliamentary Joint Committee on Corporations and Financial Services on wholesale investor and wholesale client tests. The tests relate to securities offers that do not need disclosure under section 708 of the Corporations Act 2001 (Cth) (Corporations Act) and wholesale client test for financial products and services under sections 761 G and 761GA Corporations Act. Submissions will close on 15 May 2024. 
20. Superannuation (Objective) Bill introduced to Senate requiring explanatory material of relevant legislation to include a statement of compatibility with the objective of superannuation: On 19 March 2024, the second and third readings of the Superannuation (Objective) Bill 2023 (Cth) (Superannuation Bill) were agreed before the House of Representatives. The following day, the Superannuation Bill was introduced, and the second reading was moved before the Senate. The Superannuation Bill aims to codify a share purpose of superannuation, requiring policy makers to assess future changes to superannuation legislation for compatibility with this objective. The proposed objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.  
21. Financial Framework (Supplementary Powers) Amendment Bill debated in Parliament: On 27 March 2024, the amendments to the Financial Framework (Supplementary Powers) Amendment Bill 2024 (Cth) were agreed by the Senate. Consequential changes to other relevant Acts are now under consideration for updating as a result.  

The Senate had been debating since February 2024 whether proposed amendments to Financial Framework (Supplementary Powers) Act 1997 should be adopted.  

The amendments proposed include the removal of limitation on:  

• section 32B which confers on the Commonwealth the power to make, vary or administer an arrangement or grant; and  
• section 39B which confers on the Commonwealth the power to form a company, participate in the formation of a company, acquire shares in a company or become a member of a company.  

The removal of the limitation would clarify the position of the Commonwealth in that the powers conferred in section 32B and 39B could be exercised where other general powers could also be relied on.

The amendments to section 32B also include a provision to regularise the status of the Commonwealth’s spending in that it would enact a provision to support the spending under that section by giving rise to an alternative source of power where it had previously been unclear.  

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 Authored by:

Matthew Bode, Partner
Kelly Griffiths, Partner 
Michael Kenny, Partner 
Sinead Lynch, Partner 
Daniel Maroske, Partner 
Kate Mills, Partner 
Caroline Ord, Partner 
Cinzia Donald, Partner (Lavan) 
Anna Fanelli, Senior Associate
Zira Norman, Senior Associate
Phil O’Brien, Senior Associate
Nigel Mok, Associate
Tehlyn Murray, Associate
Patrick Simon, Associate
Clare Smith, Associate
Monica Baur, Solicitor
Lucy Hardyman, Solicitor
Fiona Ng, Solicitor
Safira Dashwood, Paralegal
Oskar Henderson, Paralegal
Rose Hou, Paralegal