Directors’ Report
Regulatory environment and change The financial services industry has continued to face significant regulation and scrutiny.
Regulators are expected to continue their supervision and enforcement activities to ensure good product design processes, appropriate distribution of products, accurate disclosure on sustainability and efficient management of claims handling. The Financial Accountability Regime will apply to the life insurance industry from 15 March 2025. The Regime imposes explicit accountability obligations on directors and senior executives and mandates certain notifications to ASIC and APRA relating to the division of responsibilities. These obligations are aimed at increasing overall accountability for the management and the operating culture of financial services entities and providing ASIC and APRA with improved transparency. APRA has finalised its Prudential Standard CPS 230 ‘Operational Risk Management’, which will commence from 1 July 2025. Operational risk and resilience have been significant issues for the financial services industry over recent years, as regulated entities have faced disruptions from events such as the COVID-19 pandemic, volatile markets and cyber security and technology-related threats. Accordingly, APRA has sharpened its focus on operational risk management through the finalisation of CPS 230. Broadly, CPS 230 is aimed at ensuring APRA- regulated entities can better manage operational risks and appropriately respond to, and continue to operate through business disruptions. The implementation of CPS 230 is of critical importance and will require significant changes to governance, compliance, contractual and incident response arrangements for all APRA-regulated entities. On 7 December 2023, the Government provided its final response to the Quality of Advice Review ( QAR ). These significant reforms are aimed at making quality financial advice more accessible and affordable for consumers by reducing the cost and regulatory burden for financial advisers who provide personal financial advice. The Delivering Better Financial Outcomes draft legislation was introduced into parliament on 27 March 2024, aimed at addressing the first tranche of the QAR reforms by implementing 11 of the 22 QAR recommendations and includes customer-consent obligations for adviser commissions to be paid in relation to personal advice. Draft legislation addressing the second tranche of the proposed QAR reforms is likely to be introduced into parliament later in 2024 and is expected to introduce a new class of financial adviser, referred to as qualified advisers, and a more simplified financial advice document process. ClearView continues to actively monitor both regulatory and legislative industry reforms.
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ClearView Wealth Limited
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