Financial reporting thresholds for large proprietary companies to increase
Changes to the financial thresholds that determine when a private company is considered 'large' for reporting purposes will commence on 1 July 2019. The amendments to the Corporations Regulations 2001 increase the thresholds that determine whether a company has to lodge annual financial reports, directors' reports, and auditors' reports, and will lighten the administrative reporting burden on thousands of small to medium sized enterprises.
The thresholds, previously not been reviewed since 2007, will be doubled:
- increasing the annual consolidated revenue threshold from $25 million to $50 million or more
- increasing the value of gross assets from $12.5 million to $25 million or more
- increasing the employee size from 50 to 100 employees or more.
Read more about this in our article 'Changes to financial reporting for large proprietary companies' here.
New whistleblower protections
New legislation designed to enhance whistleblower protections across a range of statutes and industries will come into effect from 1 July 2019. The changes significantly alter and expand the protections available to eligible whistleblowers who report wrongdoing in the corporate sphere (including conduct which occurred prior to 1 July) and require affected entities to adopt and implement a whistleblower policy within their organisation. Key changes include:
- extending protections to cover officers, employees as well as suppliers and service providers and their employees, together with relatives and associates
- introducing protections for anonymous disclosure
- civil penalties for victimising or breaching the confidentiality of a whistleblower.
Read more about this here.
Mandatory wording for consumer warranties
Under changes to the Competition and Consumer Law Regulations 2010 (Cth) which commenced on 9 June 2019, businesses who supply services (or goods with services) to consumers and provide warranties against defects in respect of those goods or services, must now include additional mandatory wording in their warranty documentation (such as terms and conditions, or customer contracts). The changes expand existing warranty wording requirements and are intended to remind consumers of their rights under the Australian Consumer Law and ensure there is no attempt to restrict or limit consumer warranty rights.
Consumer data right and open banking in 2020
Ongoing delays to facilitate further testing have seen the launch of Australia's consumer data right deferred from July 2019 to February 2020. The launch of the open banking regime will see greater control ceded to consumers over their financial information that is held by banks and financial institutions, and will ultimately allow for data to be shared and accessed when nominated by a consumer, for example, when comparing products, fees and services.
While the financial services industry will be the first to undergo the testing, it would be prudent for other industries soon to be affected (such as the telecommunications industry) to undertake reviews of their internal data management processes, in anticipation of being subject to the same scrutiny as the banks.
Watch this space - Digital platforms inquiry final report due on 30 June 2019
The ongoing inquiry into the effects of digital search engines, social media platforms and other digital content aggregation platforms on media and advertising market competition is due to hand down its final report on 30 June 2019. Draft legislation is expected to be tabled in the latter half of 2019, following the release of the inquiry report and recommendations.
ASX listing rules consultation
Implementation of the rule changes proposed in the ASX's consultation paper Simplifying, clarifying and enhancing the integrity and efficiency of the ASX Listing Rules has been deferred from the originally proposed implementation date of 1 July 2019 until 1 December 2019.
Australian Business Growth Fund
Following the Coalition government's election promise to establish a new public-private fund giving small and family businesses greater access to funding, there are calls for the fund to be established and industry funding made available before the end of the year. After some initial reluctance, Westpac is now believed to have come to the table as a prospective participant in the Fund. Reports suggest this leaves ANZ as the only remaining 'Big 4' member opposed to the Fund.
With an initial equity investment of $100 million, the Australian Business Growth Fund is hoped to eventually grow to $1 billion through partnerships with banks, super funds and other financial institutions. While there is no definitive timeline, businesses with annual turnovers between $2 million and $50 million and who are interested in potential public-private partnerships, should continue to watch this space for the opportunity to take up both direct financial investment and non-financial support.
Broader obligations for APRA regulated entities
The Australian Prudential Regulation Authority (APRA) CPS Standard (Standard) which will apply from 1 July 2019 broadens the obligations of APRA-regulated entities beyond other cybersecurity obligations, including relevant provisions in the Privacy Act 1988 (Cth). The Standard also contains principles-based obligations regarding the responsibility of an organisation's board for information security, the importance of maintaining information security capabilities and policy frameworks proportionate and relevant to the size and extent of threats it faces. It also provides that APRA-regulated entities have the requirements to assess capabilities of third party providers, to classify information assets, implement various information security controls, audits and testing, and have mechanisms for incident management and response plans.
Read more here.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.