The Australian Law Reform Commission (ALRC) has pressed the case for an overhaul of financial services laws in the final report of a three-year inquiry, arguing rising complexities have increased costs and non-compliance risks. 

Interim Report C, which proposes an overhaul of Chapter 7 of the Corporations Act, says the legislation has become too long, complex and disorganised, with consequences for the financial services sector and consumer protections, while also providing a poor platform for future changes. 

“The sooner reforms can be made to the regulatory architecture, the easier they will be to implement,” the ALRC says. 

“Conversely, the longer the existing ad hoc legislative design choices remain, the more difficult, time-consuming, and expensive it will become to address the complexity that continues to accumulate.” 

Feedback to date has found “significant” support for removing complexity, but varying views on the extent of change needed, the ALRC says. 

It proposes a separate schedule to the Corporations Act, to be known as the Financial Services Law, although the grouping could also be done within the existing body of the Act. It also proposes that consumer protections split between the ASIC Act and the Corporations Act should be consolidated. 

The changes would group financial services laws together in ways that are easier to find and understand, with chapters covering consumer protections, disclosure, financial advice, and general regulatory obligations.  

The report, which includes a proposed roadmap, also says the Federal Government should establish a specially resourced taskforce, or taskforces, to oversee and implement reforms arising out of the inquiry. 

The third report has been released well before an August 25 deadline to allow more time for consultations, with a webinar to be held next Monday at 1pm, ahead of a July 26 deadline for submissions.  

The webinar will be chaired by ALRC Part-Time Commissioner and Federal Court judge Craig Colvin and a panel will include Principal Legal Officer Christopher Ash, Legal Officer Ellie Filkin and Senior Legal Officer Nicholas Simoes da Silva. 

The ALRC Review of the Legislative Framework for Corporations and Financial Services Regulation was started under the previous federal government as part of its response to the Hayne Royal Commission. The ALRC is due to deliver a consolidated final report to the Attorney-General by November 30. 

Details on the ALRC third interim report and seminar can be found here. 

See ANALYSIS.