K: Financial and Insurance Services

CBA accepts undertaking over BBSW

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 12-Jul-18

The Australian Securities & Investment Commission has advised that the Commonwealth Bank of Australia has agreed to an enforceable undertaking with regard to the bank bill swap rate. CBA will pay $25m in fines and costs to settle ASIC’s case over allegations that the bank manipulated the BBSW. National Australia Bank and the ANZ Bank both agreed to pay $50m in total to settle their BBSW cases.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, FEDERAL COURT OF AUSTRALIA

Exchange-traded funds set for take-off

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Original article by Glenda Korporaal
The Australian – Page: 19 : 12-Jul-18

ETF Securities founder Graham Tuckwell is upbeat about the outlook for Australia’s exchange-traded fund market, which he expects to grow significantly in the next five years. Tuckwell says Australians have been slow to embrace ETFs while financial advisers have instead favoured actively managed funds, as they receive a commission for recommending such products to clients. He adds that active fund managers often underperform the market after their fees are taken into account.

CORPORATES
ETF SECURITIES LIMITED

Rates must rise, APRA veteran says

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 4 : 11-Jul-18

Jeffrey Carmichael is the latest monetary policy expert to have urged the Reserve Bank of Australia to begin increasing official interest rates. The inaugural chairman of the Australian Prudential Regulation Authority has warned of the economic risks of failing to begin raising the cash rate when other central banks are doing so. He has suggested that there may be a need for up to eight rate rises, but stresses the need to do so gradually. He adds that the domestic economy is strong enough to absorb rate rises without any significant risk. Carmichael worked at the RBA for two decades.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN NATIONAL UNIVERSITY, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, PROMONTORY AUSTRALASIA PTY LTD

Dream run may be over as credit faces headwinds

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Original article by David Rogers
The Australian – Page: 28 : 11-Jul-18

The S&P/ASX 200 failed to reach a new 10-year high on 10 July, with the banking sector leading the market lower. Jonathan Mott of UBS notes that the Australian market had significantly outperformed its global peers between early April and early July, although this had followed a sharp fall in the March quarter. Meanwhile, a number of factors may weigh on the local bourse in the lead-up to the August reporting season, including the potential for the US-China trade war to escalate.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, UBS HOLDINGS PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RESERVE BANK OF AUSTRALIA, TELSTRA CORPORATION LIMITED – ASX TLS, MACQUARIE GROUP LIMITED – ASX MQG, BANK OF QUEENSLAND LIMITED – ASX BOQ, SUNCORP BANK, AMP BANK LIMITED, PEPPER GROUP LIMITED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

AMP warns planners on risky advice

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Original article by Alice Uribe
The Australian Financial Review – Page: 1 & 4 : 10-Jul-18

AMP appears reluctant to retain self-employed financial planners under its operating licence, as it continues to be impacted by the "fee for no service" scandal. AMP is understood to have given some self-employed planners just months to find a new operating licence. Meanwhile, the Australian Securities & Investments Commission has confirmed that plans to continue its investigation of AMP over the fees scandal.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, HILLROSS FINANCIAL SERVICES LIMITED, IPAC FINANCIAL CARE LIMITED, CHARTER FINANCIAL PLANNING LIMITED, AUSTRALIA. DIRECTOR OF PUBLIC PROSECUTIONS, ADVISER SOLUTIONS PTY LTD, CONNECT FINANCIAL SERVICES BROKERS

All eyes on big four as Macquarie lifts rates

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 11 & 16 : 10-Jul-18

There is growing speculation that Australia’s four major banks will increase their mortgage interest rates independently of the Reserve Bank. Macquarie is the latest bank to have advised of a rise in its variable rates for new and existing customers. Jonathan Mott of UBS says the large banks may opt to lift their rates in coming months to reflect the increase in their wholesale funding costs, although Sean Fenton of Tribeca Investment Partners notes that the major banks may be wary of attracting further political scrutiny at present. Some smaller lenders recently increased their mortgage rates.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, UBS HOLDINGS PTY LTD, TRIBECA INVESTMENT PARTNERS PTY LTD, PEPPER GROUP LIMITED, AMP BANK LIMITED, SUNCORP BANK, AUSWIDE BANK LIMITED – ASX ABA, IMB LIMITED, ME BANK, BANK OF QUEENSLAND LIMITED – ASX BOQ, MORGAN STANLEY AUSTRALIA LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Susceptible $A tipped to fall to US70c

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Original article by Sarah Turner
The Australian Financial Review – Page: 27 : 10-Jul-18

Some economists are bearish about the outlook for the Australian dollar, which has traded at close to a 12-month low since mid-June. Stephen Roberts of Laminar Capital expects the currency to be trading at $US0.70 at the end of 2018, citing the prospect of a growing gap between official interest rates in Australia and the US. Elliot Clarke of Westpac in turn expects the Australian dollar to test the $US0.70 level in the second half of 2019.

CORPORATES
LAMINAR CAPITAL, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA

Directors hit in Hayne fallout

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Original article by Alice Uribe
The Australian Financial Review – Page: 1 & 2 : 9-Jul-18

Providers of directors’ and officers’ insurance have increased their premiums by an average of 70 per cent over the past six months due to costs incurred as a result of class actions. Eden Fletcher of Aon Risk Solutions notes that providers have moved to prevent further losses on class action policies they offer by inserting exclusions that would see them refuse to cover companies hit by class actions resulting from the banking royal commission. There are potentially up 20 class actions pending as a result of the royal commission, with AMP alone facing five lawsuits over its fee-for-no-service scandal.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AON RISK SERVICES AUSTRALIA LIMITED, AMP LIMITED – ASX AMP, CHUBB CORPORATION, BERKSHIRE HATHAWAY INCORPORATED, AUSTRALIAN LAW REFORM COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, RABOBANK AUSTRALIA LIMITED, QBE INSURANCE GROUP LIMITED – ASX QBE, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, AMERICAN INTERNATIONAL GROUP INCORPORATED, XL CATLIN

Sunsuper swallows another fund

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Original article by Joanna Mather
The Australian Financial Review – Page: 16 : 6-Jul-18

Sunsuper will merge with AustSafe Super, a $2.2 billion industry super fund that targets regional and rural Australians. The merger will create a $58 billion fund with 1.4 million members. The Australian Prudential Regulation Authority is keen to see smaller superannuation funds merge, while Sunsuper CEO Scott Hartley believes that the sector will consolidate to the point where only half a dozen "mega" funds remain.

CORPORATES
SUNSUPER PTY LTD, AUSTSAFE PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, KINETIC SUPER, AUSTRALIA. PRODUCTIVITY COMMISSION, CHANT WEST FINANCIAL SERVICES PTY LTD

Low rates may trigger shock

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Original article by Jacob Greber
The Australian Financial Review – Page: 1 & 3 : 6-Jul-18

Keeping official interest rates low for too long could have dire consequences, according to the Bank for International Settlements’ Committee on the Global Financial System. The committee warns that it could lead to a rise in inflation, which in turn would force central banks to hike up interest rates, resulting in a global recession. Under one scenario put forward by the committee, inflation could rise by two per cent, forcing central banks to lift short-term interest rates by 300 basis points. In Australia, this would result in economic growth falling to 0.5 per cent.

CORPORATES
BANK FOR INTERNATIONAL SETTLEMENTS, RESERVE BANK OF AUSTRALIA