K: Financial and Insurance Services

Federal Reserve hikes rates for third time this year

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Original article by Donna Borak
CNNMoney – Page: Online : 27-Sep-18

The Federal Reserve has increased the federal funds rate by 25 basis points to a range of 2% to 2.25% in a move than had been widely expected. It is the third interest rate rise in 2018, and a majority of Federal Reserve policymakers now favour a fourth increase in December. Central bank policymakers also anticipate three rate rises in 2019, while the Federal Reserve has upgraded its forecast for US economic growth in 2018 from 2.8% to 3.1%. However, growth is expected to slow to 2.5% in 2019.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE

Hayne interim report to shake the sector

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Original article by Richard Gluyas
The Australian – Page: 21 : 26-Sep-18

The financial services royal commission’s interim report will only cover the inquiry’s first four rounds of public hearings. The report will be tabled in federal parliament on 28 September, and the last two public hearings to date will be included in the inquiry’s final report, which is slated to be released in February. Richard Sproules of Citigroup expects the interim report to focus on the issues of responsible lending and governance failures in the provision of financial advice.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, CITIGROUP PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. OFFICE OF THE GOVERNOR-GENERAL

ASIC blasts banks over breaches

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Original article by James Frost, Misa Han
The Australian Financial Review – Page: 1 & 2 : 26-Sep-18

A report from the Australian Securities and Investments Commission has criticised the length of time banks take to provide customers with a refund for misconduct. ASIC found that on average it takes banks more than five years to repay customers, while they also take an inappropriate amount of time to investigate and report breaches to the corporate regulator. ASIC has proposed much harsher civil and criminal penalties for misconduct in the financial services industry.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AMP LIMITED – ASX AMP, BANK OF QUEENSLAND LIMITED – ASX BOQ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, CREDIT UNION AUSTRALIA LIMITED, GREATER BANK LIMITED, HERITAGE BANK LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN BANKERS’ ASSOCIATION, FINANCIAL SERVICES COUNCIL

TWU wants for-profit pirates out of super

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Original article by Joanna Mather
The Australian Financial Review – Page: 4 : 25-Sep-18

The Transport Workers’ Union’s national secretary Michael Kaine contends that banks and for-profit funds should be removed from the superannuation system. His views are a little more drastic than those of Industry Super Australia CEO Bernie Dean, who does not think that funds owned by banks should be barred from operating in the super system, despite evidence presented about them to the banking royal commission. Kaine is disappointed that ISA, which is a lobby group for industry super funds, has suspended its anti-bank "fox in the henhouse" advertising campaign.

CORPORATES
TRANSPORT WORKERS’ UNION, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN LABOR PARTY

Big banks’ systems not ready for open banking: APRA

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Original article by James Eyers
The Australian Financial Review – Page: 2 : 25-Sep-18

Australian Prudential Regulation Authority chairman Wayne Byres has called on banks to spend more on their IT systems. He says a lack of expenditure on IT has left banks under-prepared for new open banking and credit reporting requirements, while consumer trust in banks will be eroded if their systems continue to suffer from outages. Byres also says it is hard to forecast what impact changes to technology will have on the banking sector.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINTECH AUSTRALIA PTY LTD

Record looms as dividends ready to soar

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Original article by Sarah Turner
The Australian Financial Review – Page: 20 : 24-Sep-18

Australia’s S&P/ASX 200 has gained around two per cent so far in 2018, and analysts are hopeful that the market will be bolstered by some $13bn worth of dividend payments in the last week of September. Richard Coppleson of Bell Potter estimates that listed companies will pay out around $18.9bn in dividends for the month, compared with $16.4bn in September 2017. The resources sector has accounted for four of the top five companies in terms of the size of dividend increases in 2017-18, and Shane Oliver of AMP Capital notes that this is having a flow-on effect across the broader market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BELL POTTER SECURITIES LIMITED, AMP CAPITAL INVESTORS LIMITED, BHP BILLITON LIMITED – ASX BHP, ALUMINA LIMITED – ASX AWC, WOODSIDE PETROLEUM LIMITED – ASX WPL, RIO TINTO LIMITED – ASX RIO, CSL LIMITED – ASX CSL, CREDIT SUISSE (AUSTRALIA) LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, FORTESCUE METALS GROUP LIMITED – ASX FMG, AMP LIMITED – ASX AMP

Union funds call a truce

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Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 4 : 24-Sep-18

Industry Super Australia CEO Bernie Dean says the lobby group has "shelved indefinitely" its anti-bank "fox and henhouse" advertisements. Dean, who has succeeded David Whiteley, was responsible for creating the commercials, which were launched in March 2017. AustralianSuper CEO Ian Silk had been queried by the banking royal commission as to why it had helped to finance what the commission described as political advertising. Silk stated that it was in the best interest of AustralianSuper’s members. Dean says this was a reasonable comment.

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIANSUPER PTY LTD, HOST-PLUS, ACTU, VICTORIAN WORKCOVER AUTHORITY, AUSTRALIA. PRODUCTIVITY COMMISSION

Watchdog acts to rein in initial coin offerings

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Original article by Samantha Bailey
The Australian – Page: 26 : 21-Sep-18

The Australian Securities & Investments Commission has the burgeoning cryptocurrencies industry in its sights, revealing a crackdown on so-called initial coin offerings. ASIC has blocked the issuance of cryptocurrency tokens by several companies, due to concerns that their ICO product disclosure statements contained misleading or deceptive information. The corporate regulator notes that ICOs are highly speculative and the sector is largely unregulated.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NEW DAWN FUND, INVESTORS EXCHANGE LIMITED

Suncorp kept misleading ads campaign

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 17 & 20 : 21-Sep-18

The financial services royal commission has been told that Suncorp-owned insurer AAMI faced potential fines of up to $7.2m for misleading advertising in November 2017, but it was fined just $43,800 by the Australian Securities & Investments Commission. The radio ads promoted AAMI’s commitment to completely replace a policyholder’s home if it was destroyed, but failed to disclose that this was subject to a cost limit. AAMI’s in-force premium revenue from these policies was $426m for the year, providing a strong incentive to continue the ad campaign.

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINANCIAL OMBUDSMAN SERVICE LIMITED, AAI LIMITED

Thorburn faces $1m pay cut in NAB overhaul

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Original article by James Eyers
The Australian Financial Review – Page: 17 & 20 : 20-Sep-18

National Australia Bank will disclose more details of its revised executive pay structure when its annual remuneration report is released in November. Amongst other things, NAB will no longer take into account total shareholder return when determining executive bonuses, although return on equity will continue to be a key metric. NAB chairman Ken Henry says the new pay scheme is aimed at more closely aligning executive remuneration to customer service. CEO Andrew Thorburn is among the executives to be affected by the new remuneration policy.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY