Anti-money laundering reform

The Attorney-General's Department has released an Issues Paper for the Financial Services Sector on their anti-money laundering reporting obligations.

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Privacy and disclosure of information between financial institutions

In H v Financial Institution A and B [2004] PrivCmrA 3 the complainant alleged that there had been a disclosure of personal information (including name, address and financial details) between two financial companies that breached the Privacy Act.

In September 2003 in a District Court action, financial institution B filed an affidavit containing 13 portfolio valuations of its former clients which it alleged were obtained from financial institution A.

As the portfolio valuation was dated 15 December 2001 and the Commissioner was satisfied that both financial institution A and financial institution B collected the information prior to 21 December 2001 (the National Privacy Principle 2 starting date) no action was taken.

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NAB releases APRA report

The National Australia Bank has released a report by the Australian Prudential Regulation Authority (APRA) into irregular currency options trading at the bank.

The National's Chairman, Mr Graham Kraehe, and Chief Executive, Mr John Stewart, also outlined the bank's response to the APRA report and its proposed remedial actions.

The Chief Executive of the National, Mr John Stewart, said the bank would act as quickly as possible to implement all of the remedial actions proposed by APRA including capital adequacy initiatives to take the National's total capital to 10 per cent. This will also result in termination of the current share buy-back.

"We have already started to implement a series of actions to enhance our policies and systems," he said. "We will continue to work co-operatively with APRA, and other regulatory authorities, to implement all remedial actions within agreed timelines."

"The first step will be to incorporate the remedial actions proposed by APRA into the four point action plan we announced earlier this month. We will then report regularly to the Board and APRA on implementation of the remedial actions."

Read the reports by Pricewaterhouse Coopers, Deloittes and Blake Dawson Waldron into NAB's foreign exchange currency losses.

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APRA RELEASES DETAILS OF “FIT AND PROPER” STANDARDS

The Australian Prudential Regulation Authority (APRA) has released, for public consultation, proposed “fit and proper” prudential standards for authorised deposit taking institutions, general insurance and life insurance institutions.

Under the proposed requirements:

1. APRA-regulated institutions will need to develop their own fit and proper policies that include assessment of the fitness and propriety of individuals to act in positions of responsibility;
2. these policies must, at a minimum, address the fit and proper requirements that APRA expects responsible persons to meet, which are set out in the proposed prudential standards; and
3. APRA will only become involved in an assessment when it has specific concerns about an individual.

APRA’s Chairman, Dr John Laker, said the proposals are the first step in the introduction of harmonised governance requirements for these industries.
“The proposals are designed to reflect community expectations about persons who fill positions of responsibility in these industries and will set minimum benchmarks for people in, or wishing to enter, these industries at director, senior management or advisory level,” he said.

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