The FSR Act will bring many challenges to the financial services sector, according to accountants Ernst & Young. In a new report on the regulation of financial conglomerates, it said regulations and compliance are foremost in the minds of general insurers and intermediaries.

The report says new legislation like the FSR Act may have more impact on particular financial institutions.  

The real implications will emerge as regulators in Australia respond to proposed international standards.  Globalisation and conglomeration have direct implications for the risk profile of an organisation. 

The nature and extent of the risks depends on the mix of business activities it undertakes and the types of economic environments it operates in. 

ASIC has already released a paper covering the regulation of conglomerate groups. Ernst and Young will be holding follow-up briefings late this year as further regulatory change develops.