Financial Services: Regulatory Recap - Week commencing 11 May 2026

On the pulse 

• ASIC Market Integrity Update Issue 176 (April 2026) – see update.
• ASIC Corporate Finance Update Issue 28 (April 2026) – see update.
• ASIC reissues guidance on financial reporting and audit relief – see guidance.
• ASIC calls for urgent cyber uplift as AI accelerates cyber threats – see media release.
• ASIC: InFocus – May 2026 – see newsletter.
• ASIC: Deadline looms for digital asset businesses to apply for a licence – see media release.
• ASIC: The power of public accountability – see keynote address.
• ASIC Chair Joe Longo spoke with MC and ABC journalist Dan Ziffer at the 2026 Financial Counselling Australia conference – see transcript.
• ASIC proposes to remake relief from dollar disclosure and AFS licensing requirements – see media release.
• ASIC proposes to remake legislative instrument about client money held in cash common funds – see media release.
• APRA calls for a step-change in AI-related risk management and governance – see media release.
• APRA finalises targeted amendments to CPS 230 Operational Risk Management – see media release.
• APRA and ASIC publish latest data on life insurance claims and disputes – see media release.
• APRA releases Monthly Authorised Deposit-taking Institution Statistics for March 2026 – see media release.
• APRA updates FAQs for large exposures – see the revised FAQs.
• APRA temporarily withdraws Guidelines on Recognition of an External Credit Assessment Institution – see media release.
• AUSTRAC steps up supervision of virtual assets sector as reforms take effect – see media release.
• AUSTRAC: Opening Speech – Financial Integrity hub – see speech.
• RBA: Roundtable opens public consultation on draft vision for account-to-account payments in Australia – see consultation.
• Senate Economics Legislation Committee recommends passing Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026 – see Bill.
• Last week in Parliament – Issue 198 – see issue.
• Proposed reforms: Regulatory Initiatives Grid – April 2026 – see RIG.
• Consultation: Strengthening the superannuation performance test – see consultation.
• G+T Insight – Corporate Advisory Update | April 2026 – Ilona Hunnisett (28 April 2026).
• G+T Insight – New $16.5 million maximum penalty for serious contraventions by a NDIS provider – Peter Munro and David Baddeley (5 May 2026).
• G+T Insight – Data minimisation and dark patterns: the Privacy Commissioner's determination in IRE – Andrew Hii (7 May 2026).
• G+T Insight – Offshore wind doesn’t stack up – and that’s exactly why we need it – Christopher Flynn and Jamie Guthrie (7 May 2026).

ASIC

ASIC Market Integrity Update Issue 176 (April 2026)

ASIC released ASIC Market Integrity Update Issue 176 (April 2026), which includes articles about:

• The ASX Inquiry Panel's final report into the ASX Group recently published by ASIC.
• ASIC's release of its Digital Assets Law Reform Roadmap (Roadmap) for the next 18 months. The Roadmap outlines how ASIC will implement new laws that bring digital asset platforms and tokenised custody platforms under the financial services licensing regime from April 2027.
• An announcement that ASIC and the Australian Accounting Standards Board (AASB) will host a series of free in-person workshops in May to help companies prepare for the new mandatory sustainability reporting requirements.
• ASIC's consultation on updates to three regulatory guides to implement the Australian Government’s financial market infrastructure reforms. The three regulatory guides are:
  • Regulatory Guide 172 Financial markets: Domestic and overseas operators (RG 172)
  • Regulatory Guide 249 Derivative trade repositories (RG 249)
  • Regulatory Guide 268 Licensing regime for financial benchmark administrators (RG 268).
• Updates to over-the-counter derivative clearing and reporting rules.
• ASIC enforcement outcomes over the last two months.

For further information, please see ASIC Market Integrity Update Issue 176 (April 2026).

ASIC Corporate Finance Update Issue 28 (April 2026)

ASIC released ASIC Corporate Finance Update Issue 28 (April 2026), which includes information about:

• ASIC's recent consultation on updates to legislative instruments, forms and regulatory guidance to support the enhanced beneficial ownership reforms for listed entities in Schedule 1 of the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025. ASIC is currently reviewing submissions with a view to publishing ASIC's response and next steps around July 2026.
• ASIC's remaking of a range of sunsetting fundraising and mergers and acquisitions relief instruments, following consultation in 2025–2026.
• ASIC's collaboration with the AASB to run a series of free in‑person workshops in May 2026 focused on preparing companies for the new mandatory sustainability reporting requirements. ASIC states that the workshops are intended as a practical entry point for smaller and mid‑size companies, and their advisers, particularly those that will be required to commence sustainability reporting for financial years beginning on or after 1 July 2026. Workshops will be held in Melbourne, Brisbane, Sydney and Perth, and will be delivered by the University of Technology Sydney.

For further information, please see ASIC Corporate Finance Update Issue 28 (April 2026).

ASIC reissues guidance on financial reporting and audit relief

ASIC has reissued Regulatory Guide 43 Financial reporting and audit relief (RG 43) to streamline guidance on financial reporting and audit relief and incorporate legislative changes. This update consolidates existing guidance and provides clearer direction for entities seeking relief from financial reporting and audit requirements under the Corporations Act 2001 (Cth) (Corporations Act).

The updated RG 43 reflects legislative reforms implemented since the guidance was last updated in 2011 and incorporates other relevant ASIC guidance, including Regulatory Guide 29 Financial reporting by Australian entities in dual listed company arrangements (RG 29). As part of these changes, RG 29 has been withdrawn to simplify the regulatory framework.

These changes took effect on 24 April 2026.

For further information, please see Regulatory Guide 43 Financial reporting and audit relief (RG 43).

ASIC calls for urgent cyber uplift as AI accelerates cyber threats

On 8 May 2026, ASIC called on all licensees and market participants to urgently strengthen their cyber resilience measures, as frontier AI intensifies global cyber risks. While cyber risk has always existed, misuse of frontier AI models such as Anthropic’s Claude Mythos could expose cyber security vulnerabilities at unprecedented speed, scale and sophistication.

In an open letter to industry, ASIC has urged entities to act now and not wait for advanced AI tools to uplift their cyber security fundamentals and ensure their systems can withstand AI-accelerated threats. The letter follows ASIC’s recent court outcome against FIIG Securities Limited, which reinforced the legal case for cyber risk management controls to be demonstrably effective and proportionate to the size, nature and complexity of a business.

ASIC: InFocus – May 2026

On 6 May 2026, ASIC released InFocus – Volume 34 Issue 4 (May 2026), which includes updates and information on:

• New anti-money laundering and counter-terrorism financing (AML/CTF) laws are taking effect and being strengthened to better protect businesses and prevent criminal misuse of professional services.
• ASIC will soon be collecting website addresses from Australian financial services (AFS) licensees, which will be published on the Professional Registers Search starting from mid-June 2026 – see ASIC’s website.
• The obligations of a local agent of a registered foreign company are critical to ensuring ongoing compliance with ASIC requirements – see ASIC’s website.
• ASIC has released self‑paced e‑learning modules (Modules 1–8) to help build understanding of the new sustainability reporting requirements in the Corporations Act, developed in partnership with the AASB.
• ASIC reminds registered agents acting on behalf of companies about their annual company statement obligations – see ASIC’s website.
• The Australian Taxation Office’s free Essentials platform and its Masterclass series starting 14 May 2026 provide an opportunity to learn about how to set a business up for success and be prepared for tax time.

ASIC: Deadline looms for digital asset businesses to apply for a licence

On 4 May 2026, ASIC reminded providers of financial services involving digital asset financial products that they should act quickly to decide whether they require an AFS licence (or variation to their existing AFS licence) and apply by 30 June 2026, before ASIC’s no-action position expires. Firms who need a licence or a variation to their existing authorisations, but do not apply by 30 June 2026, risk being in breach of financial services laws. Unlicensed conduct carries serious civil and criminal penalties under law, including significant fines that could reach up to 10% of annual turnover.

ASIC: The power of public accountability

On 7 May 2026, ASIC released the keynote address by ASIC Chair Joe Longo at the 2026 Financial Counselling Australia Conference in Cairns. Key points include:

• ASIC has undertaken a significant transformation to become a modern, confident and ambitious regulator.
• Confidence is the true currency of the financial system and depends on people seeing the rules enforced. Accountability works best when it is seen and felt.
  
• Meeting the challenges of the day means ASIC cannot stand still – ASIC must continually reshape itself in response to emerging problems.

ASIC Chair Joe Longo spoke with MC and ABC journalist Dan Ziffer at the 2026 Financial Counselling Australia conference

On 8 May 2026, ASIC released the discussion between Dan Ziffer and Joe Longo from the 2026 Financial Counselling Australian conference held in Cairns on 7 May 2026. This is Longo’s exit interview as ASIC Chair. Key points from the discussion include:

• Investing in prevention – ASIC needs to invest in prevention so that the Australian community can have enough confidence and knowledge of what’s going on in the world and the system, that as each new opportunity arises to invest or spend, they’re in a good position to make a decision in their own interests.
• Defining cure – it is important that the Australian community understands this system. While ASIC will continue to litigate and hold individuals and companies accountable for serious misconduct, they are not going to catch everyone. For those people who suffer losses, ASIC is not equipped or resourced to recover all those losses.
• The influence of AI – one of Australia’s biggest retailers is now predicting somewhere around 15% of its revenues are going to be driven by bots. There is also the emerging issue around Claude Mythos, which is a technology Anthropic invented, and is very good at finding vulnerabilities in an entity’s cyber defences – ASIC needs to be onto this.
• Superannuation industry – the Australian superannuation system is widely admired globally and has grown to around $4.5 trillion. The Shield and First Guardian saga revealed the vulnerabilities and issues with the way the system is working. The Australian community needs to understand where their superannuation should be safely put and have access to financial advice and counselling.

ASIC proposes to remake relief from dollar disclosure and AFS licensing requirements

On 5 May 2026, ASIC announced that it is seeking feedback on a proposal to remake two legislative instruments that provide relief from dollar disclosure and certain AFS licensing requirements for a period of five years. The legislative instruments, which will expire on 1 October 2026, are:

• ASIC Corporations (Disclosure in Dollars) Instrument 2016/767
• ASIC Corporations (Financial Product Advice – Exempt Documents) Instrument 2016/356.

ASIC is proposing minor and technical changes to both instruments to improve clarity and consistency.

ASIC proposes to remake legislative instrument about client money held in cash common funds

On 5 May 2026, ASIC announced that it is seeking feedback on its proposal to remake a legislative instrument to allow AFS licensees to pay clients’ money into a cash common fund. ASIC Corporations (Client money - Cash common funds) Instrument 2016/671 is due to expire on 1 October 2026. ASIC is proposing to remake this instrument because it has assessed the instrument is operating effectively and continues to form a necessary and useful part of the legislative framework. The effect of this instrument will remain unchanged when remade. ASIC is proposing minor and technical changes to both instruments to improve clarity and consistency.

APRA

APRA calls for a step-change in AI-related risk management and governance

On 29 April 2026, APRA published a letter to industry calling for a step-change in how banks, insurers and superannuation trustees manage AI-related risks. The letter outlines findings from a targeted supervisory review conducted in late 2025, which found that governance, risk management and operational resilience practices are not keeping pace with AI adoption. Key concerns include boards lacking technical literacy to effectively challenge management on AI risks, concentration risk from dependence on single providers, reduced transparency where AI is embedded within broader software platforms and fragmented assurance frameworks across domains such as cyber security, privacy and procurement. APRA is not proposing additional prudential requirements at this stage but expects entities to significantly improve their practices in alignment with existing prudential standards.

APRA finalises targeted amendments to CPS 230 Operational Risk Management

On 30 April 2026, APRA finalised targeted amendments to Prudential Standard CPS 230 Operational Risk Management (CPS 230), Prudential Practice Guide CPG 230 Operational Risk Management, and the corresponding Material Service Provider Register template. The amendments introduce limited exemptions from specific contractual requirements in CPS 230 for material arrangements with certain categories of non-traditional service providers (NTSPs), like central banks and clearing and settlement facilities, where contractual compliance is not practicable. Developed in response to industry feedback, these changes aim to provide targeted, administratively efficient solutions for regulated entities that maintain material arrangements with NTSPs, while preserving the core objectives of operational risk management.

APRA sector statistics

• APRA and ASIC publish latest data on life insurance claims and disputes for December 2025: On 29 April 2026, APRA released its Life Insurance Claims and Disputes Statistics publication, covering a rolling 12-month period from 1 January 2025 to 31 December 2025.
• APRA releases Monthly Authorised Deposit-taking Institution Statistics for March 2026: APRA has released its Monthly Authorised Deposit-taking Institution Statistics publication for March 2026.

APRA updates FAQs for large exposures

On 5 May 2026, APRA announced that it has revised the Frequently Asked Questions (FAQs) for Prudential Standard APS 221 Large Exposures to clarify APRA’s expectations on how exposures to structured vehicles should be calculated and reported using the stored value look through methodology. It has also removed FAQs that are no longer required and updated references to the prudential standards.

APRA temporarily withdraws Guidelines on Recognition of an External Credit Assessment Institution

On 7 May 2026, APRA announced that, as part of its ongoing regular review of the standards and guidance that form its prudential framework, it has temporarily withdrawn its Guidelines on Recognition of an External Credit Assessment Institution (Guidelines). The Guidelines were last updated in 2013. APRA will provide a further update once the review of the Guidelines is complete.

Other bodies and regulators

AUSTRAC steps up supervision of virtual assets sector as reforms take effect

On 8 May 2026, AUSTRAC announced that it has launched two targeted supervisory campaigns into Australia’s virtual assets sector, as landmark Australian anti-money laundering reforms reshape how virtual asset businesses are regulated. AUSTRAC’s campaigns focus on virtual asset service providers, previously known as digital currency exchanges, offering over-the-counter crypto to cash (or vice versa) services and local exchanges operating in Australia.

AUSTRAC Chief Executive Officer Brendan Thomas said that ‘AUSTRAC is checking how well crypto businesses in Australia are managing money-laundering risks, ahead of major new laws coming into force’.

AUSTRAC: Opening Speech – Financial Integrity hub

On 8 May 2026, AUSTRAC published the opening speech from the Financial Integrity hub. Key points include:

• Financial crime is evolving rapidly – criminal networks are increasingly adaptive, technologically capable, and transnational, offering money laundering ‘as a service’ and exploiting emerging channels such as crypto ATMs and illicit tobacco supply chains.
• A rigid, rules-based approach is insufficient – regulators and industry must adopt a genuinely risk-based, end-to-end strategy that prioritises disruption and prevention alongside enforcement, shifting resources quickly as threats change.
• Deeper public-private partnership is essential – government, industry and academia must move beyond information sharing to joint analytics, co-designed controls and real-time data collaboration to keep pace with criminal innovation.

RBA: Roundtable opens public consultation on draft vision for account-to-account payments in Australia

On 30 April 2026, the Reserve Bank of Australia (RBA) announced that the Account-to-Account Payments Roundtable has released a public consultation on the draft vision for the future of account-to-account (A2A) payments in Australia. Submissions close 22 May 2026. The publication of the draft vision report for feedback marks the next step in a broader, multi-step process to shape a shared vision for the future of A2A payments in Australia and a roadmap of high-level deliverables and milestones to achieve that vision. The intention of this work is to provide certainty to stakeholders on the long-term strategic direction for A2A payments, and anchor the industry’s development of A2A payments products, services and underlying infrastructure.

Legislation and proposed legislation 

Senate Economics Legislation Committee recommends passing Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026

On 24 April 2026, the Senate Economics Legislation Committee (Committee) published its report on the Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026 (Bill), recommending the Bill be passed.

The Bill proposes to amend the Australian Securities and Investments Commission Act 2001 (Cth) to merge the Financial Reporting Council, the AASB and the Auditing and Assurance Standards Board into a new body, named External Reporting Australia, with responsibility for performing core financial reporting and sustainability standard-setting functions.

The Committee's report also contains a dissenting report from the Coalition members, which recommends, among other things, that the Bill not be passed in its current form and that Treasury conduct a cost-benefit analysis of the proposed changes before further scrutiny by the Senate.

Last week in Parliament – Issue 198

The Last week in Parliament page publishes updates following each Parliamentary sitting week. It summarises key events in the Commonwealth Parliament from that particular week and includes links to relevant documents. As relevant to the financial services industry, key events include:

New inquiries of joint committees

The following new inquiries of the Intelligence and Security Committee were announced:

• Review of the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2026 – submissions due 8 May 2026
• Review of the Australian Criminal Intelligence Commission reform package 2026 – submissions due 5 June 2026.

Laws passed

As at the close of business on 3 April 2026, the following Bills have passed both Houses and are awaiting assent by the Governor-General.

• Corporations Amendment (Digital Assets Framework) Bill 2026
• Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2026.

Proposed reforms: Regulatory Initiatives Grid – April 2026

On 6 May 2026, the Treasury announced that it released the Regulatory Initiatives Grid (RIG) for April 2026 – Edition 3, which lists announced and publicised regulatory reform priorities and initiatives that will materially affect the financial sector over the next two years. Planned processes and regulatory changes are indicative only and remain subject to change including, for example, to reflect changes in priorities and/or the market environment.

Consultation: Strengthening the superannuation performance test

On 8 May 2026, the Treasury announced that it has opened consultation on options to strengthen the annual superannuation performance test. This test was introduced to protect Australians’ retirement savings. It holds superannuation funds accountable for their investment performance and fees. The review aims to support superannuation fund investment and protect outcomes for members.

Submissions for feedback close 19 June 2026.

G+T articles 

G+T Insight – Corporate Advisory Update | April 2026 – Ilona Hunnisett (28 April 2026).

G+T Insight – New $16.5 million maximum penalty for serious contraventions by a NDIS provider – discusses new amendments to the NDIS Act, introducing criminal offences and civil penalties – Peter Munro and David Baddeley (5 May 2026).

G+T Insight – Data minimisation and dark patterns: the Privacy Commissioner's determination in IRE – discusses the recent Privacy Commissioner decision in Commissioner Initiated Investigation into IRE Pty Ltd (Privacy) [2026] AICmr 24 – Andrew Hii (7 May 2026).

G+T Insight – Offshore wind doesn’t stack up – and that’s exactly why we need it – discusses how onshore wind is the most obvious answer to Australia’s energy transition – Christopher Flynn and Jamie Guthrie (7 May 2026).

Calendar dates 

• 21 May 2026 – Commonwealth Bank shareholder class action – final written submissions due in the High Court appeal concerning continuous disclosure, causation, and loss.
• 30 May 2026 – AML/CTF reforms: Notify AUSTRAC of AML/CTF Compliance Officer (deadline for existing entities).
• 25 June 2026 – Final report of Senate inquiry into greenwashing due.
• 1 July 2026 – Mandatory climate-related financial disclosures for Group 2 entities apply in respect of financial years starting on or after this date.
• 1 July 2026 – Key AML/CTF obligations commence for Tranche 2 entities including lawyers under reforms to Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
• 1 July 2026 – Payday Super reforms commence.
• 13 July 2026 – Key Consumer Data Right obligations commence for non-bank lenders.
• 31 July 2026 – Submissions to ASIC consultation on increasing net tangible assets requirement for responsible entities due.
• 4 December 2026 – Amendments to the Corporations Act to expand substantial holding disclosure to commence.
• 10 December 2026 – Automated decision-making processes under the Privacy and Other Legislation Amendment Act 2024 (Cth) to commence.
• 1 July 2027 – Mandatory climate-related financial disclosures for Group 3 entities apply in respect of financial years starting on or after this date.