Insights

Regulatory Recap | Week commencing 25 May 2026

Date published 28 May 2026
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In this edition of our Financial Services Regulation Newsletter, we focus on key legal developments over the last fortnight.

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Financial Services Regulation

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ASIC

ASIC sets financial reporting, audit and sustainability focus areas for FY2026–2027

On 18 May 2026, ASIC outlined the following key focus areas for its financial reporting, audit and sustainability reporting activities in the 2026–2027 financial year, including updates to its surveillance programs:

  • Financial reporting focus areas – For 2026–2027, ASIC will review the financial reports of listed and unlisted companies, registrable superannuation entities (RSEs) and managed investment schemes (MISs). ASIC will also review the disclosures of companies that have provisions for decommissioning and site-restoration costs. This will include assessing disclosures against new guidance issued by the AASB (illustrative example D of AASB 137 Provisions, Contingent Liabilities and Contingent Assets).
  • Audit focus areas – For 2026–2027, ASIC will review 25 audit files. While ASIC will maintain its focus on listed and unlisted companies and RSEs, it will also include a selection of MISs.
  • Compliance activities – ASIC will continue to focus on non-lodgement of financial reports by large proprietary companies. ASIC will also review compliance by registered company auditors with their obligations to lodge their annual statements.
  • Sustainability reporting and assurance focus areas – ASIC has taken a range of steps to support entities’ compliance with the sustainability reporting framework, including guidance, relief and new educational materials.

ASIC issues early observations on sustainability reporting ahead of 30 June 2026

On 18 May 2026, ASIC shared its observations on the first sustainability reports prepared under Chapter 2M of the Corporations Act 2001 (Cth) to assist other reporting entities as they approach the 30 June 2026 reporting season. Highlights include:

  • 259 sustainability reports were lodged for the financial year ending 31 December 2025, with the majority being from unlisted entities in the following sectors:
    • mining
    • construction, materials and manufacturing
    • financial services and insurance
    • oil and gas
    • electricity and energy distribution, supply and retailing.

ASIC has seen an increase in the quantity and quality of climate-related financial information in the market compared to previous voluntary climate-related disclosures, with standardised requirements driving more consistency and comparability. ASIC particularly commends reports that use tables, diagrams and other visual aids to present information.

ASIC encourages entities to consider the following when preparing reports:

  • Entities are not permitted to use disclaimers that conflict with the statutory framework and objectives of Chapter 2M sustainability reporting that may confuse or mislead.
  • The ‘reasonable and supportable’ information available to entities to identify climate-related risks includes information about ‘past events, current conditions and forecast future conditions’.
  • Reports should provide clear, effective and proximate disclosure of relevant judgements, assumptions and areas of measurement uncertainty.
  • The disclosure of additional climate-related information must not obscure material climate-related financial information.
  • When cross-referencing information outside the sustainability report, entities must ensure they meet disclosure requirements.
  • The definition of ’climate-related targets’ in Australian Sustainability Reporting Standard AASB S2: Climate-related disclosures extends to targets that the entity is required to meet by law or regulation, including greenhouse gas emissions targets such as the Safeguard Mechanism.

    • ASIC: Sustainability reporting relief for related registered schemes

    On 18 May 2026, ASIC registered ASIC Corporations (Amendment) Instrument 2026/313 (Amending Instrument), which amends ASIC Corporations (Related Scheme Reports) Instrument 2025/438 (Principal Instrument) to enable a registered scheme to present combined sustainability reports, provided certain requirements are met. The Principal Instrument allows related registered schemes to elect to present their financial and directors' reports together, subject to certain eligibility requirements. The Amending Instrument allows these related schemes to present their sustainability reports on the same basis, avoiding unnecessary duplication in sustainability reporting where the same information applies to multiple related schemes and assisting user understanding.

    ASIC continues to ease regulatory burden

    On 19 May 2026, ASIC announced it released Report 830 Regulatory simplification progress report (REP 830) outlining steps ASIC has taken to make regulation clearer, more accessible and easier to navigate. In response to feedback received following the release of Regulatory simplification (REP 813) in September 2025, ASIC also has:

    • Developed clearer guidance and simplified legislative instruments to ensure they are easy to understand, while implementing sector-based regulatory roadmaps to help small company directors and financial advice businesses understand their obligations.
    • Improved access to regulatory information on ASIC’s website with 280 form landing pages updated to make it easier for industry to comply with regulatory obligations.
    • Modernised digital services, which have driven a 380% increase in forms available for electronic lodgement, resulting in 45,000 fewer paper-based lodgements annually, simplifying how businesses interact with ASIC.

    ASIC scam alert: Scammers luring investors onto fake crypto-asset trading platforms

    On 25 May 2026, ASIC warned consumers who have joined ‘share trading’ or ‘stock tips’ messaging app groups that scammers are using these forums to push investments on fake crypto-asset trading platforms.

APRA

APRA consults on a more efficient and transparent bank licensing framework

On 13 May 2026, APRA announced it has opened consultation on a new draft licensing framework for locally-incorporated authorised deposit-taking institutions (ADIs).

The consultation package follows APRA’s 2025 discussion paper on improving the licensing framework for ADIs. When finalised later this year, the changes will implement Action 6 of the Council of Financial Regulators' Review into Small and Medium-sized Banks – that APRA update its ADI licensing framework to make the application process more transparent and efficient.

Submissions for feedback close 31 July 2026.

APRA finalises class exemption for approval to own or control an RSE licensee

On 22 May 2026, APRA announced it has finalised a class exemption from the change of ownership and control provisions of the Superannuation Industry (Supervision) Act 1993.

The exemption removes the requirement for management employees and company secretaries with a direct controlling interest of less than 2% in an RSE licensee to apply to APRA before acquiring a controlling stake. The change is intended to reduce regulatory burden while maintaining appropriate APRA scrutiny.

APRA’s latest System Risk Outlook highlights resilience as geopolitical and technological risks intensify

On 21 May 2026, APRA announced it has intensified its oversight of banks, insurers and superannuation trustees as geopolitical tensions, artificial intelligence (AI) and growing complexity in global markets reshape the risk environment.

Coming at a time of elevated uncertainty globally, the report reinforces that Australia’s financial system is well-prepared to withstand a range of severe downside scenarios, including a deep global recession combined with higher funding costs and operational disruptions.

Other bodies and regulators

AUSTRAC releases updated risk snapshot of Australia’s financial crime landscape

On 12 May 2026, AUSTRAC announced three new national updates to provide an up‑to‑date snapshot of how serious financial crime threats are evolving across the country. “These updates show that Australia’s money laundering, terrorism financing and proliferation financing environments continue to rely on enduring channels – but they are being reshaped by technology, globalisation and increasingly sophisticated criminal behaviour,” AUSTRAC CEO Brendan Thomas said.

The three products are designed to be used alongside AUSTRAC’s national Money Laundering, Terrorism Financing and Proliferation Financing risk assessments released in 2024, giving businesses a dynamic, year‑on‑year view of Australia’s risk landscape.

AUSTRAC: Update to regulator statement of expectations – May 2026

On 21 May 2026, AUSTRAC announced it has published its expectations for current and new regulated businesses in meeting their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) changed on 31 March 2026, which will be introduced for new businesses on 1 July 2026. AUSTRAC sets out its expectations on:

  • managing risk
  • using the program starter kits
  • managing risks where there is no settled AUSTRAC position
  • meeting AUSTRAC’s regulatory expectations in FY2026–2027.

ATO: Latest news on tax and superannuation law and policy

On 12 May 2026, the Australian Taxation Office (ATO) published an article summarising the changes to tax and superannuation laws following the 2026–2027 Budget. The article also addresses the changes to tax and superannuation laws following the 2025–2026 MYEFO, which was handed down in December 2025.

RBA and DFCRC release findings from Project Acacia

On 18 May 2026, the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) released a report detailing the findings of Project Acacia, a joint initiative examining how innovations in digital money and settlement infrastructure could support the development of wholesale tokenised asset markets in Australia.

The project identified the potential for asset tokenisation – alongside innovations in digital money and settlement infrastructure – to enhance the efficiency, functionality and resilience of Australia’s wholesale financial markets. The project also identified several challenges to scaling tokenised markets that warrant deeper analysis by regulators and industry, including some that connect to the broader environment for responsible financial innovation in Australia.

As part of the project, industry participants developed and tested 20 wholesale tokenised asset market use cases spanning a range of asset classes.

Building on the momentum generated by Project Acacia, the report outlines a new multi-stream program aimed at advancing responsible innovation in Australia’s wholesale financial markets. The program will focus on overcoming long-standing coordination challenges, removing unnecessary barriers to the safe adoption of new technologies and enabling industry participants to explore and scale innovative approaches to uplifting wholesale market functioning in a manner consistent with financial stability.

See RBA media release.

ASA: Federal Budget 2026–2027: what was announced, what members are telling us and what comes next

On 21 May 2026, the ASA published an article outlining the measures in the 2026–2027 Federal Budget that are relevant to investors, including the impact of proposed changes to capital gains tax, negative gearing and discretionary trusts.

Legislation and proposed legislation

New bill: Enhancing Director ID regime and integrating the ASIC companies register

On 14 May 2026, the Australian Government introduced the Treasury Laws Amendment (Business Registries Stabilisation and Uplift) Bill 2026 (Bill) into the House of Representatives following supportive exposure draft consultation from 12 December 2025 to 10 February 2026. The Bill will amend the Corporations Act 2001 (Cth) (Corporations Act) and other legislation to enhance the operation and regulation of the Director ID regime, and to support ASIC’s continued administration of the companies and business registers.

The Director ID regime was introduced in November 2021 as part of reforms to strengthen corporate transparency and combat unlawful activity, such as illegal phoenix behaviour. A Director ID is a unique, lifelong identifier issued to individuals appointed as directors or acting alternate directors of companies or other relevant bodies registered under the Corporations Actor the Corporations (Aboriginal and Torres Strait Islander) Act 2006. The Registrar appointed under the Commonwealth Registers (Appointment of Registrars) Instrument 2021 continues to administer the Director ID regime, and ASIC continues to enforce it.

The Explanatory Memorandum states that the Bill will:

  • Enhance the Director ID regime by strengthening its requirements and enforcement by ASIC.
  • Facilitate inclusion of Director ID information on ASIC’s companies register, a publicly available record of information about registered companies and registrable bodies. To support this, companies and registrable bodies will be required to provide the Director ID of each director to ASIC as part of standard corporate registration and reporting practices, including application for registration, notification of changes to the details of the company or director and annual reporting.

Treasury states that these amendments will strengthen transparency and corporate accountability, and enable regulators, businesses and the public to check directors’ identities and trace their relationships across corporate entities more easily.

For more information about the Director ID regime, see Practical Law’s Practice note, Appointment of directors: Director identification numbers.

Inquiry: Artificial intelligence and data centres

On 13 May 2026, the Senate referred artificial intelligence and data centres for inquiry and report. Submissions are sought considering the:

  • The effectiveness of existing regulatory frameworks in managing the growth of data centres in Australia, including in relation to existing and future deals between the Government and global AI companies.
  • The potential impacts of AI and data centres on Australian communities, industries and the environment, water and energy.
  • Any other related matters.

Submissions closed 26 June 2026.

Treasury: Federal Budget 2026–2027

On 12 May 2026, the Government handed down its 2026–2027 Budget. Treasurer Dr Jim Chalmers announced that this Budget is focused on resilience and reform by delivering more cost‑of‑living help and building a more productive economy, a better tax system, a fairer housing market and a stronger and more sustainable budget.

Tax reform measures for workers’ businesses and future generations:

  • Limiting negative gearing for residential property to new builds from 2027–2028 – The Government’s negative gearing changes put homeowners first and will help more Australians purchase a home. Over 80% of new investor lending goes to existing homes, and the Government wants more investment to back the construction of new supply. Existing arrangements will remain unchanged for all properties purchased before 7.30pm AEST 12 May 2026, until they are sold.
  • Changes to the capital gains tax discount – The Government is replacing the 50% capital gains tax discount with inflation‑adjusted indexation from 1 July 2027 to restore the taxation of real gains, with a minimum tax rate of 30% on realised gains. This will apply to all assets except new builds, where both new and old arrangements will be available to choose from. It will be prospective, with gains accrued on existing investments prior to the start date, to retain the 50% discount.
  • Applying a minimum 30% tax rate on discretionary trusts from 2028–2029 – The Government aims to create a more equal and sustainable treatment between workers and families who earn a living from wages and people with income from assets held in trusts.
  • Backing small businesses with tax relief – The Government is delivering over $3.5 billion of new measures that lower taxes for businesses and start‑ups including loss refundability, support for venture capital and a permanent $20,000 instant asset write‑off for small business – see the Treasurer’s media release.
  • Reducing compliance costs – The Government is making the tax system simpler to reduce compliance costs for businesses and individuals by $540 million a year to make trade and investment simpler and easier.
  • Delivering a new Working Australians Tax Offset (WATO) to provide a permanent annual $250 tax offset to all eligible Australian workers – This begins to apply for income earned from work for the second half of 2027 and will automatically reduce workers’ tax liability for the 2027–2028 income year. The Government is also introducing a $1,000 instant tax deduction to allow workers to deduct up to a thousand dollars off their taxable income without keeping receipts. These measures build on the legislated tax cuts starting in July 2026 and July 2027.

See the Treasurer’s media release.

Other measures:

  • Boost productivity and cut regulatory costs by $10 billion –The Government is rolling out a comprehensive productivity package that will reduce regulatory burden by $10.2 billion each year, boost long‑run GDP by around $13 billion through work underway with states and territories and lift young firms’ investment in R&D by $400 million per year. These reforms make it easier to do business, easier to build and easier to invest through meaningful reforms to approvals processes, establishing a single national market, promoting the uptake of AI and implementing landmark reforms to energy markets – see the Treasurer’s media release.
  • Backing innovation and investment –The Budget also strengthens Australia’s science capability, critical to delivering a Future Made in Australia, including support for research, innovation and science institutions – see the Treasurer’s media release.
  • Responsible economic and fiscal management – The Government is delivering $63.8 billion of savings and reprioritisations which is helping reduce debt and fund the services and supports that Australians rely on – see the Treasurer’s media release.
  • Strengthening Australia's fuel resilience – The Government has delivered a fuel security and price relief package in the Budget, investing $14.8 billion to immediately secure more fuel, strengthen Australia’s supply chains and build long‑term resilience to future fuel shocks – see the Treasurer’s media release.
  • Taking pressure off Australians – The Government is helping families and businesses with fuel costs and making healthcare more affordable and accessible – see the Treasurer’s media release.
  • Helping first home buyers by building more homes – $2 billion over four years from 2026–2027 for enabling infrastructure to support up to 65,000 more homes, taking the Government’s Homes for Australia plan to over $47 billion – see the Treasurer’s media release.
  • Backing higher wages – The Government has backed wage growth for low‑paid workers in each of the last four Annual Wage Reviews. Across these reviews, the National Minimum Wage increased by over $9,120 per year – see the Treasurer’s media release.

See also 2025–2026 Portfolio Supplementary Additional Estimates Statements and 2026–2027 Portfolio Budget Statements.

Reforms: Further streamlining and strengthening the foreign investment framework

On 19 May 2026, the Treasury announced the Government is further reforming Australia’s foreign investment framework to make it work better for investors, the economy and national interest. The Government has published an overview of the reforms, which were informed by submissions to a public discussion paper in late 2025.

The reforms include:

  • Setting a new performance target of deciding all low-risk applications within 30 days (to be implemented from 1 January 2027).
  • Removing ineffective conditions on existing foreign investment approvals.
  • Amending foreign investment law.
  • Streamlining the Register of Foreign Ownership of Australian Assets.

See the Foreign Investment’s media release.

G+T articles

G+T Insight – The Competitive Edge Podcast – the latest episode is titled ‘Bannerman – The Legend of Ron Bannerman: ACCC Commissioner Luke Woodward on the history of competition law in Australia and the centrality of enforcement’ – Moya Dodd and Matt Rubinstein (11 May 2026).

G+T Insight – From the Strait of Hormuz to the boardroom – directors, are you ‘distress ready’? – discusses the cost pressures for businesses that are likely to linger regardless of whether peace is achieved – Peter Bowden, Orla McCoy, Anna Schwartz and Mikhail Glavac (13 May 2026).

G+T Insight – The new rules of the game: what the 2026–2027 Federal Budget means for private capital in Australia – unpacks the latest Federal Budget – Julian Cheng, Matthew Charman and Sophie Jiang (13 May 2026).

G+T Insight – New merger regime: first-quarter insights – shares early trends from the regime’s first quarter – Elizabeth Avery, Simon Muys, Jeremy Jose, Andrew Low and Courtney Olden (14 May 2026).

G+T Insight – Zip Co zapped by High Court of Australia: trade mark loss leads to rebrand – discusses the High Court’s decision to dismiss the appeal – Lisa Lennon and Caelan Bruce (15 May 2026).

G+T Insight – APRA consults on a more transparent bank licensing framework – outlines APRA’s draft Licensing Criteria and Guidelines for locally incorporated authorised deposit-taking institutions – Peter Reeves, Georgina Willcock, Vince Battaglia, Emily Shen, Anthony Basa, Stephanie Choong, Amiinah Dulull, Maya Ruber and Billy Elsum (21 May 2026).

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