Financial Services, Funds and Superannuation legal update - August 2025
11 September 2025
We would like to acknowledge the contribution of Robert Fraser, Associate.
Welcome to this month’s Financial Services legal update, your guide to the key regulatory developments, enforcement actions and emerging legal trends shaping Australia’s financial services landscape.
This month’s developments reflect a strong regulatory focus on transparency in superannuation, cyber resilience, and improved consumer outcomes.
ASIC has announced reviews of fee disclosure rules in Regulatory Guide 97 and superannuation investment requirements reinforcing its commitment to cost clarity and fund accountability.
Treasury is consulting on best practice principles for retirement income solutions and a proposed new Retirement Reporting Framework to increase accountability in the retirement phase.
APRA has released updated superannuation statistics, refreshed its data reporting FAQs, and published notes from its July roundtable on recent cyber incidents, highlighting its focus on operational resilience.
Both ASIC and APRA have published their Corporate Plans for 2025–26, setting out strategic priorities including system resilience, governance, consumer protection and market integrity.
Meanwhile, AUSTRAC has released its updated AML/CTF Rules, ordered an audit of Binance Australia over serious AML/CTF concerns and issued warnings to remitters to deregister inactive businesses.
Enforcement activity remains strong. ASIC has secured penalties against major institutions, continuing its crackdown on SMSF auditors, and progressed criminal proceedings for insider trading, fraud and consumer harm.
We hope you enjoy this edition and if you have any questions, please do not hesitate to contact a member of our team.
Anti-Money Laundering/Counter Terrorism Finance (AML/CTF)
AUSTRAC releases new AML/CTF Rules
AUSTRAC has released updated Anti-Money Laundering and Counter-Terrorism Financing Rules as part of the broader reform program. The new rules supplement the new amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). Several obligations previously in the Rules can now be found in the Act. The amendments will come into effect in two stages:
- 31 March 2026: Changes to AML/CTF obligations start for current reporting entities (Tranche 2 entities), except for threshold transaction reporting and suspicious matter reporting which will remain the same until 2029.
- 1 July 2026: AML/CTF obligations start for Tranche 2 entities.
AUSTRAC encourages remitters to ‘use or lose’ AUSTRAC registration
AUSTRAC has urged inactive remittance businesses to voluntarily de-register or face cancellation, warning that dormant registrations can be exploited by criminals to process illicit funds. With more than 900 independent remittance providers registered, AUSTRAC CEO Brendan Thomas emphasised the need to maintain an accurate register to reduce misuse of high-risk, cash-exposed services. A similar recent crackdown on the digital currency exchange register saw 22 businesses voluntarily withdraw and 100 targeted for cancellation, with AUSTRAC planning to publish a public version of that register to bolster confidence.
Independent remitters told to ‘use it or lose it’ in AUSTRAC registration blitz
AUSTRAC orders audit of global crypto exchange
AUSTRAC has directed Binance Australia to appoint an external auditor after identifying serious concerns with its AML/CTF controls. AUSTRAC noted that Binance’s most recent independent review was too limited in scope given the exchange’s size and risk profile. AUSTRAC also raised concerns about high staff turnover, insufficient local resourcing, and weak senior management oversight. The audit will examine Binance’s compliance with obligations under the AML/CTF Act, including customer due diligence, transaction monitoring and suspicious matter reporting.
AUSTRAC orders audit of global crypto exchange
Court upholds bank’s right to close client account over high ML/TF risk
The Supreme Court of NSW dismissed proceedings brought by Merciful Group Inc, a registered charity, against its former bank, Suncorp. The dispute arose after Suncorp closed the charity’s account citing, unacceptable AML/CTF risks. Merciful, a charity established to provide aid to Lebanon, Yemen and the Syrian Arab Republic, frequently transferred large sums of money with minimal or no transaction details. Merciful argued that Suncorp lacked a “legitimate basis” under the account terms to terminate, claiming “legitimate interests” could not extend to risk appetite or reputational concerns. Merciful also argued that implied contractual obligations required the bank to act reasonably, investigate concerns, and engage with Merciful before termination.
The Court rejected these arguments, finding that the terms and conditions permitted the bank to close an account to protect its business needs, prudential requirements, or guard against material financial detriment, which included managing unacceptable ML/TF risks. The Court considered Suncorp acted rationally, honestly and in good faith in accordance with their terms and conditions and consistently with s 235 of the AML/CTF Act. The Court came to this conclusion on the basis Merciful’s unexplained overseas transfers, unusual donation spikes, high-risk jurisdictions, lack of business expenditure, and apparent links to persons convicted of criminal offences.
Merciful Group Incorporated v Norfina Limited t/as Suncorp Bank [2025] NSWSC 841
Superannuation
ASIC to review Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements
ASIC has announced a review of requirements to disclose stamp duty payments in Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements. RG 97 governs the fees and costs that must be disclosed in APRA’s superannuation fund performance test. The consultation is in response to the recent investor roundtable convened by the Treasurer. ASIC has stated that the review would also consider whether class order relief should be given to bring consistency to how internally and externally managed private credit arrangements are disclosed. The review will report back on 30 November 2025.
ASIC to review superannuation investment requirements
Superannuation roundtable on recent cyber incidents
APRA hosted a Superannuation Industry Roundtable to address recent cyber incidents affecting several superannuation entities. APRA outlined its expectations for improved cyber resilience, emphasising rapid remediation of weaknesses, continual testing of controls, and sector-wide cooperation to protect member trust. Although incidents in March and April 2025 were contained, APRA considered they were indicative of the sector’s appeal to threat actors, particularly during periods of market volatility. The roundtable covered lessons learned from the recent cyber incidents including:
- Member communications: Low engagement from members hampered communication during the incident, highlighting the need for a clear, stakeholder-aligned crisis communication plan with defined roles and responsibilities.
- Media management: Managing media coverage required proactive engagement and consistent messaging to maintain trust while avoiding unnecessary concern. Social media monitoring proved the fastest way to detect emerging issues, and clear, direct messaging on how members could contact their fund was essential.
- Incident response experience: Entities shared their experiences with heavy reliance on CISO networks for early information sharing suggested the need for more formal cross-fund information sharing arrangements.
APRA releases notes on Superannuation Industry Roundtable from July 2025 following cyber incidents
APRA releases June 2025 superannuation statistics
APRA has published its quarterly superannuation statistics for June 2025, showing total assets in the system have grown to nearly $4.3 trillion, which is a 9.8% increase from June 2024 and 4.8% growth over the last quarter. APRA noted continued consolidation within the industry, with larger funds capturing the majority of inflows, reflecting a shift towards scale and efficiency in delivering retirement outcomes.
APRA releases superannuation statistics for June 2025
APRA releases 2025 superannuation performance test results
APRA has released the results of the 2025 Superannuation Performance Test, which assessed 563 products across the industry. All 52 MySuper products passed the test, as did all 374 non-platform trustee-directed products. Of the 137 platform trustee-directed products, 7 failed, which is a significant improvement from 37 failures in 2024.
APRA releases 2025 superannuation performance test results and product insights
APRA updates FAQs on superannuation data reporting
APRA has updated its FAQs on superannuation data reporting, clarifying obligations under the expanded reporting standards introduced in recent years. The updates provide guidance on data definitions, reporting timeframes, and treatment of complex investment structures.
APRA publishes updates to FAQs on Superannuation Data Reporting
Treasury consults on best practice principles for superannuation retirement income solutions
Treasury is consulting on voluntary principles to guide trustees in designing retirement income solutions under the Retirement Income Covenant. The principles emphasise:
- understanding the membership base and using cohorting to tailor products and engagement strategies,
- balancing objectives and risks by offering a mix of account-based pensions and lifetime income products to manage income, flexibility and longevity, and
- trustee designed and tailored solutions, allowing members to adopt default cohort solutions or customise their own.
The principles aim to lift standards in how trustees support members’ diverse retirement needs. Submissions close 18 September 2025.
Best practice principles – superannuation retirement income solutions
Treasury consults on Retirement Reporting Framework
The Government is seeking feedback on a proposed Retirement Reporting Framework to increase transparency in the retirement phase of superannuation. The framework would require trustees to report annually on their retirement offerings such as drawdown options, longevity protection products, intra-fund and comprehensive advice, and member engagement tools. APRA would then collect and publish this data to track industry progress from 2028 onwards. Submissions close 5 September 2025.
Retirement Reporting Framework
General regulatory
ASIC’s releases 2025–26 Corporate Plan
ASIC has published its Corporate Plan 2025–26, setting out strategic priorities through to 2028–29. The regulator’s focus areas include:
- Improving consumer outcomes: with initiatives targeting financial hardship, dispute resolution, implementing financial advice reforms, early detection of high risk managed investment schemes, insurance practices and consumer education via Moneysmart.
- Strengthening market disclosure and professional conduct: including financial reporting, climate reporting, audit quality, director conduct and whistleblower protections.
- Supporting better superannuation and retirement outcomes: through reviews of trustee member services, surveillance of SMSF establishment advice and reviews of superannuation trustee practices to address high-risk super switching.
- Strengthening operational digital and data resilience and safety: with emphasis on reviewing arrangements between licensees and offshore service providers, preparedness for significant market events, conducting an inquiry into ASX Group, development of legislation requiring the licensing of payment service providers as well as promoting good practices for managing cyber and operational risks among ASIC’s regulated population.
- Driving market integrity and transparency: including improving IPO processes, enhanced surveillance of trading on Australia’s domestic licensed markets and lastly supporting guidance in tokenisation and digital assets.
ASIC also committed to simplifying regulation, modernising its registry systems via the RegistryConnect program and enhancing its digital and AI capabilities.
APRA publishes 2025–26 Corporate Plan
APRA has released its Corporate Plan for 2025–26, setting its direction for the next four years. The plan is built around four objectives: maintaining financial and operational resilience, responding to emerging risks, getting the regulatory balance right, and improving organisational effectiveness.
Key priorities include:
- strengthening cyber resilience across regulated industries, including AI-related and geopolitical risks
- assessing compliance with CPS 230 Operational Risk Management
- updating governance prudential standards
- publishing the inaugural System Stress Test results on risks between banking and superannuation
- intensifying scrutiny of superannuation fund expenditure, investment governance and member outcomes, and
- releasing the Climate Vulnerability Assessment for general insurers.
APRA publishes 2025-26 Corporate Plan
ASIC remakes incidental retail cover instrument
ASIC has remade the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716, which provides conditional relief for insurers and brokers from certain retail client obligations under the Corporations Act 2001, specifically when incidental retail cover is provided in wholesale insurance contracts.
ASIC remakes incidental retail cover legislative instrument
APRA and ASIC host Superannuation CEO roundtables
APRA and ASIC held Superannuation CEO roundtables in July 2025, focusing on governance, risk oversight, and expenditure outcomes. CEOs reported a sector-wide shift towards clearer accountabilities and embedding risk ownership with boards demanding more insightful risk reporting. Discussions also centred on the Best Financial Interest Duty (BFID), with APRA clarifying its focus is not cost reduction but ensuring expenditure decisions are purposeful, transparent, and demonstrably in members’ best interests.
APRA and ASIC host Superannuation CEO Roundtables – July 2025
ASIC proposes to remake managed investment product consideration relief
ASIC is consulting on changes to the ASIC Corporations (Managed Investment Product Consideration) Instrument 2015/847, which governs pricing of scheme interests in older registered schemes. Proposed amendments aim to simplify how responsible entities document discretionary pricing decisions, remove overly prescriptive elements in documentation provisions, and align with the instrument ASIC’s modern drafting approach. Consultation closed 29 August 2025.
ASIC proposes to remake relief instrument for managed investment product consideration
ASIC data reinforces focus on consumer and retail investor protection
ASIC has released Report 812 which contains data showing continued risks to consumers and retail investors, reinforcing ASIC’s enforcement priorities. ASIC received 7,561 reports of misconduct between 1 January 2025 to 30 June 2025. Of these, 5,909 related specifically to the financial services and retail investor category.
New data reinforces ASIC’s focus on consumer and retail investor protection
ASIC increases scrutiny of financial reporting compliance
ASIC has increased its focus on the lodgement of financial reports, after identifying poor compliance by grandfathered companies previously exempt from lodging financial reports. ASIC found that more than half (755 of 1,166) of previously grandfathered companies did not lodge their financial reports in FY23 or FY24. Accordingly, ASIC has launched broader surveillance focused on non-lodgement of financial reports by large proprietary companies, which is expected to complete in 2026.
ASIC urges life insurers to improve direct sales practices
ASIC commissioner Alan Kirkland has sent a letter to life insurers urging them to renew their efforts to improve direct sales practices following a review of the direct sale of life insurance policies. ASIC has recommended that insurers strengthen product design, improve sales and pay practices for sales staff, apply consistent quality standards to retention calls and streamline cancellation processes.
ASIC urges life insurers to spearhead improvements to direct sales practices
ASIC consults on modernising trading system rules
ASIC has released Consultation Paper 386 proposing amendments to the Market Integrity Rules for securities and futures markets to reflect the rise of algorithmic and AI-driven trading. The proposed amendments would include clearer definitions and controls for trading algorithms, strengthen governance, testing and kill-switch requirements, and expand real-time and post-trade monitoring obligations. Consultation closes 22 October 2025.
ASIC moves to modernise trading system rules to keep pace with technology and AI
ASIC enforcement outcomes
ASIC sues Mercer Super for systemic failure to report
ASIC has commenced proceedings against Mercer Superannuation (Australia) Limited, alleging that between October 2021 and September 2024, it had inadequate systems in place to comply with the reportable situations regime. ASIC alleges the trustee failed to report seven investigations, and reported another investigation a year late. ASIC also claims the report to ASIC also understated the number of members who were impacted. This matter falls within one of ASIC’s 2025 enforcement priorities to address member services failures in the superannuation sector.
ASIC sues Mercer Super alleging systemic failure to report member services investigations
TerraCom to pay $7.5 million following ASIC whistleblower action
The Federal Court has ordered TerraCom Limited to pay $7.5 million in penalties in ASIC’s whistleblower protection proceedings. ASIC alleged TerraCom and certain former executives engaged in conduct that victimised a former employee who had made protected whistleblower disclosures to ASIC. The Court found the statements caused detriment in the form of humiliation, distress and reputational damage, and were made at least in part because TerraCom suspected he had made a qualifying disclosure. The ruling is the first significant Federal Court penalty for contraventions of the Corporations Act’s whistleblower protection provisions since they were amended in 2019.
TerraCom to pay $7.5 million after ASIC whistleblower action
ASIC takes action against 28 SMSF auditors in FY25
ASIC has continued its crackdown on SMSF auditor misconduct, taking action against a further 28 auditors, taking the total to 48 during FY25. Sanctions included deregistrations, suspensions and conditions on registration, targeting auditors who failed to comply with auditing and ethical standards.
ASIC takes action against a further 28 SMSF auditors in FY25
ASIC sues Equity Trustees over due diligence failures
ASIC has initiated proceedings against Equity Trustees Limited, alleging failures to conduct adequate due diligence in relation to the Shield Master Fund. The trustee oversaw the investment of around $160 million of retirement savings into Shield over 2023 and 2024 through its fund. ASIC claims the trustee failed to:
- exercise the same degree of care, skill and diligence as a prudent superannuation trustee would (s 52(2)(b) of the Superannuation Industry (Supervision) Act 1993 (Cth))
- act in the best financial interests of its members (s 52(2)(c) of the Superannuation Industry (Supervision) Act 1993 (Cth)), and
- do all things necessary to ensure the financial services covered by its Australian financial services licence were provided efficiently, honestly and fairly (s 912A(1)(a) of the Corporations Act 2001 (Cth)).
ASIC sues Equity Trustees alleging due diligence failures relating to Shield
Court orders Rent4Keeps and Darranda to pay $7.4 million penalty
The Federal Court has ordered Rent4Keeps Pty Ltd and Darranda Pty Ltd to pay a combined $7.4 million in penalties for overcharging vulnerable consumers on essential household goods through rent-to-buy arrangements. The Court found that Darranda entered into 516 agreements it called ‘leases’ that were actually credit contracts, meaning that Darranda contravened the 48% annual rate cap and failed to disclose to its customers key details of the contract. The Court also found that Darranda failed to act efficiently, honestly and fairly when engaging in credit activities.
ASIC secures million-dollar penalties from iSignthis and former CEO
The Federal Court has ordered iSignthis Ltd and its former director and CEO, Nickolas John Karantzis, to pay combined penalties exceeding $11 million for breaches of continuous disclosure obligations and director duties. iSignthis was a business providing remote identity verification, transactional banking, and payment processing services. The Federal Court found that iSignthis engaged in misleading or deceptive conduct by failing to properly inform the market of material agreements and revenue, while Mr Karantzis breached his obligations by failing to act with due care and diligence.
ASIC takes further action against Ferras Merhi
ASIC has commenced additional proceedings against the former director of First Guardian Superannuation and Shield Asset Management, Ferras Merhi, alleging he engaged in unconscionable conduct, failed to act in the best interests of clients, gave conflicted advice, and provided defective statements of advice. If the additional grounds are approved by the Court, ASIC will seek injunctions “prohibiting Mr Merhi from any involvement in a financial services business, the appointment of a receiver to Mr Mehri’s personal property, and provisional liquidators to Venture Egg Financial Services and United Financial Advice”. The action follows earlier proceedings and forms part of ASIC’s broader enforcement focus on First Guardian and the Shield Master Fund.
ASIC takes further action against Ferras Merhi over First Guardian and Shield superannuation advice
Licence cancellations and banning orders issued by ASIC
ASIC has made the following banning orders and licence cancellations:
- Chuuse Pty Ltd: ASIC cancelled Chuuse Pty Ltd’s Australian Credit Licence after it failed to comply with obligations including engaging in credit activities efficiently, honestly and fairly.
- Jason Richard Poser: permanently banned from providing financial services and engaging in credit activities for dishonesty while acting as an accountant for SMSFs.
- Andrew Rankin: Mr Rankin a former adviser at Next Generation Advice, banned for four years after ASIC found he failed to act in clients’ best interests and did not provide appropriate advice.
- Joel Hewish: The Administrative Review Tribunal upheld ASIC’s 10-year ban on the former United Global Capital director Mr Hewish for serious misconduct, including misleading investors.
- Milutin Petrovic: Mr Petrovic, a former financial adviser at United Global Capital, has been banned for six years for advising clients to establish SMSFs and invest in the related the Global Capital Property Fund Limited property company, breaching a number of advice related obligations including not acting the best interests of his client.
- Mark Zappia: Mr Zappia was disqualified from managing corporations for five years after ASIC found he failed to meet director duties while operating in the Northern Territory.
- Easy Plan Financial Services: Easy Plan Financial Services Pty Ltd’s Australian Credit Licence was cancelled following a payment of compensation by the Compensation Scheme of Last Resort.
- BDS Accounting: BDS Accounting Pty Ltd’s Australian Financial Services licence was cancelled for a failure to pay industry funding levies which were outstanding for over 12 months.
- MWL Financial Services: ASIC has cancelled the Australian Financial Services licence of MWL Financial Services Pty Ltd and banned MWL’s director Nicholas Maikousis for 10 years over conduct in relation to the Shield Master Fund. MWL operated what it called a “low cost advice project” to receive referrals from lead generators and to recommend clients invest or rollover their superannuation into the Shield Master Fund. ASIC found serious compliance failures on the part of MWL Financial Services.
- Robert John Tohill: Mr Tohill was banned for a period of five years from providing any financial services, performing, as an officer, responsible manager or compliance manager, any function involved in the carrying on of a financial services business. Mr Tohill was the compliance manager during the period MWL Financial Services recommended clients invest or rollover their superannuation into the Shield Master Fund.
ASIC bans former Next Generation Advice adviser Andrew Rankin for four years
ASIC permanently bans former Self-Managed Superannuation Fund (SMSF) accountant Jason Richard Poser
ASIC cancels Australian credit licence of Chuuse Pty Ltd
ASIC cancels licence of Easy Plan Financial Services Pty Ltd
ASIC cancels AFS licence of BDS Accounting Pty Ltd for failure to pay industry funding levies
ASIC criminal outcomes and charges
ASIC has reported the following criminal matters:
- Rodney Forrest: former investment manager Rodney Forrest has been charged with trading and procuring others to trade Platinum Asset Management while he possessed inside information.
- Darryl Mapleson: sentenced to 20 months’ imprisonment, to be served via intensive correction, after pleading guilty to insider trading. Mr Mapleson came into possession of inside information through his role at BM Geological Services where he was engaged by Beacon Minerals. Mr Mapleson acquired 6,792,850 Beacon Minerals shares while possessing insider information.
- Michael David Steele: former developer sentenced to eight years’ imprisonment for defrauding superannuation investment funds of more than $5 million. Mr Steele used money invested for a commercial and residential property development for his own personal use.
- Fake bond scam: four individuals charged with money laundering in connection with offering fraudulent bonds and other financial products targeting retail investors. ASIC alleges that the four dealt with victim funds which were the proceeds of crime and were reckless as to whether those funds were proceeds of crime.
- Ashley Arandez: pleaded guilty to dishonest conduct and dealing with proceeds of crime while acting as a financial adviser. A total of $1.97 million was transferred to Mr Arandez, in circumstances where he was providing financial product advice, but did not hold an Australian Financial Services licence.
- Marion Pearson: was successfully extradited from New Zealand to face charges in Australia for allegedly stealing over $4 million from clients.
Charges laid in Platinum Asset Management insider trading case
Darryl Mapleson sentenced in Beacon Minerals insider trading case
Four people charged with money laundering in fake investment scam
Ashley Arandez pleads guilty to dishonest conduct and dealing with proceeds of crime
Financial advice
Treasury consults on CSLR levy cap options
Treasury is consulting on options for dealing with circumstances where costs under the Compensation Scheme of Last Resort (CSLR) exceed the legislated $20 million sub-sector levy cap. For 2025–26, claims in the financial advice sub-sector are expected to exceed the cap by over $47 million. Options canvassed include taking no action, spreading compensation over time, imposing a special levy solely on the financial advice sub-sector, or spreading costs across multiple retail-facing sub-sectors based on capacity to pay. Submissions are due by 29 August 2025.
Compensation Scheme of Last Resort – exceeding the sub-sector levy cap
Banking and Authorised Deposit Taking Institutions (ADIs)
ASIC to act on CFR’s recommendations for small and medium banks
ASIC has announced it will act on recommendations from the Council of Financial Regulators’ report into competition among small and medium-sized banks. ASIC will explore changes to reduce the frequency of internal dispute resolution data reporting for small banks and adopt ongoing processes to review regulatory reporting requirements for small and medium-sized banks. ASIC will take a no-action position for small banks regarding internal dispute resolution (IDR) reporting until the technical and system changes are formalised in approximately 2027. The move complements APRA’s initiatives to simplify licensing and prudential requirements for smaller ADIs.
ASIC to act on recommendations in CFR report on small and medium banks
APRA consults on minor updates to prudential and reporting framework
APRA has opened consultation on proposed minor amendments to the prudential and reporting standards for ADIs. The proposed changes are largely definitional or technical and do not materially alter requirements, covering clarifications to CPS 001 Defined terms, amendments to GPS 410 removing physical inspection requirements for scheme documents in favour of online publication, terminology updates to HPS 115, HRS 101 and HRS 115, and the retirement of CPG 233 Pandemic Planning. Consultation closes on 22 September 2025.
Minor updates to the prudential framework
ANZ Digital Padlock goes live
ANZ has launched its new Digital Padlock security feature, giving customers greater control over their accounts and aiming to set a national standard in scam protection. The tool allows customers to instantly lock or unlock payments in the ANZ Plus app, reducing exposure to unauthorised transfers and scams. ANZ said the initiative is part of its broader investment in fraud prevention and reflects growing collaboration across the banking sector to strengthen consumer protection against rising scam threats.
Digital Padlock now live: ANZ aims for national standard in scam protection
Authors
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