Executive Summary
September was characterised by stronger scrutiny of product governance and advice-licensee oversight, preparation for expanded scams and AML/CTF regimes, and selective attempts to simplify regulatory administration.
The five developments with the greatest practical significance for AFSL compliance teams were:
1. Shield and First Guardian continue to reshape advice and MIS regulation. ASIC banned former Sequoia/Interprac director and responsible manager Garry Crole for 10 years from director and responsible-manager functions in financial services businesses. ASIC said its findings included inadequate responses to concerns about an advice model involving lead generators and inadequate oversight of Interprac’s approved product list, which included Shield and First Guardian. Separately, the ART affirmed five-year bans against two advisers whose conduct involved Shield/First Guardian recommendations.
The Government also opened consultation on enhanced data collection for managed investment schemes, specifically citing regulatory visibility and consumer-harm risks. Proposals include more information at registration and recurring reporting for registered MISs, with consideration of reporting or notification requirements for unregistered schemes. Consultation closes 23 October 2026.
2. ASIC is signalling that licensee governance must operate effectively in practice. The September financial advice update records FSCP disciplinary activity involving inappropriate SMSF/investment advice, while the Shield/First Guardian matters demonstrate ASIC’s focus on advice preparation, lead generation, product selection and supervision.
For AFSLs, this makes evidence of how a licensee supervises advisers, lead sources, product approvals and advice production at least as important as the written policy framework. Effective supervision must be demonstrable in practice, supported by appropriate monitoring, escalation, and evidence. For practical guidance on building and testing these arrangements, see How to Supervise Authorised Representatives: A Practical Guide for AFSL Licensees.
3. APRA and ASIC proposed simplifying FAR administration. On 2 September, APRA and ASIC proposed removing key-functions requirements from FAR regulator rules and removing the requirement to include accountable persons’ direct reports in accountability maps. The regulators estimate the changes would affect approximately 4,500 accountable people and halve the number of accountability-map updates. Consultation closes 2 October 2026, with implementation expected from early 2027.
This is a useful countertrend: regulators are showing willingness to reduce administrative burden where information provides limited supervisory value, without retreating from substantive accountability.
4. Scams regulation and AFCA’s expanded jurisdiction are moving rapidly toward implementation. AFCA reported that 118 new organisations have joined under the Scams Prevention Framework, including 99 telcos and 16 digital platforms. AFCA’s new scam-complaint jurisdiction is scheduled to commence 31 March 2027.
AFCA also confirmed its FY2026–27 Approach consultation program and began preparations for its legislatively required 2027 Independent Review.
5. AML/CTF compliance is shifting decisively from reform design to operational implementation. AUSTRAC made targeted September updates to guidance concerning professional designated services and ended the month with substantial practical material covering CDD, SMRs, reporting, AML/CTF programs and compliance practices.
The Federal Register confirms that the AML/CTF Transitional Rules include specific provisions dealing with financial advisers, CDD transition, independent evaluations and AML/CTF compliance officers.
Trend analysis
The common thread is evidence-based compliance. September’s enforcement and supervisory developments repeatedly concern the gap between what an organisation says its controls do and what those controls actually achieve.
That’s apparent in APRA‘s ING action concerning inaccurate liquidity measurement, ASIC’s action concerning inconsistent superannuation disclosures, adviser/licensee oversight arising from Shield and First Guardian, and AUSTRAC’s emphasis on high-quality reporting and customer due diligence.
For AFSL compliance teams, the emerging regulatory question is increasingly: Can the licensee demonstrate that its controls operated effectively, and can it produce reliable evidence of that operation?
That shifts the focus from the existence of policies and procedures to the quality of implementation, monitoring, testing and evidence. A defensible framework should enable a licensee to show not only what its controls are intended to achieve, but how they operate in practice, how exceptions are identified and escalated, and how weaknesses are addressed. We explore these principles in What Does a Defensible Compliance Framework Look Like for AFSL and Credit Licensees?.
Detailed Insights by Regulator
ASIC
Shield/First Guardian and licensee accountability
ASIC’s September action against former Interprac responsible manager Garry Crole is particularly relevant to advice licensees. ASIC found that he was aware of serious concerns about the representatives’ advice model, including lead generators, and did not respond adequately; ASIC also identified concerns about management and oversight of Interprac’s approved product list. The banning took effect on 4 September and remains subject to ART review rights.
On 7 September, the ART affirmed five-year bans against former advisers Andrew Hanley and Shane Monte Silva. ASIC reports that the matters included advisers having limited involvement in gathering client information, limited opportunity to assess client circumstances and, in some cases, seeing Statements of Advice only shortly before presenting them. ASIC has separately confirmed that it is reviewing advice licensees that use lead-generation services.
Compliance implication: AFSLs should test adviser supervision and advice-production workflows rather than assuming adviser sign-off establishes meaningful involvement. Map lead-generation arrangements from initial consumer contact through advice, product recommendation, and remuneration.
This requires supervision arrangements that show what the licensee actually monitors, how it identifies higher-risk advisers and activities, and what happens when concerns emerge. Our practical guide to supervising authorised representatives examines how AFSLs can structure risk-based monitoring, maintain appropriate evidence and ensure supervision operates effectively in practice.
Financial Services and Credit Panel
ASIC’s September financial advice update highlighted FSCP outcomes including a written direction concerning inappropriate SMSF and investment advice. The matter involved advice to establish an SMSF, roll existing superannuation benefits into it and invest in unregistered managed investment schemes available only to wholesale investors.
Compliance implication: SMSF establishment, wholesale-product recommendations and complex alternative investments warrant enhanced pre-vet or post-advice surveillance.
For licensees, the issue extends beyond whether the required SMSF warnings and disclosures appear on the advice file. Effective oversight should test whether the SMSF strategy itself is appropriate for the client, whether alternatives have been properly considered and whether the recommendation is supported by the client’s circumstances and objectives. We explore why SMSF advice requires more than procedural compliance in ASIC and SMSF: More than Checklists.
Superannuation disclosure enforcement
ASIC issued six infringement notices totalling $118,800 to trustees of Australian Retirement Trust, Tetra Servicing/formerly Telstra Super and Australian Meat Industry Superannuation over alleged misleading investment disclosures. ASIC’s concerns included discrepancies between online representations and actual asset allocations, investment horizons or strategic asset mixes. Payment of an infringement notice is not an admission of liability.
This reinforces the need for consistent information across PDSs, websites, portals, marketing material and other member/customer interfaces.
Credit advertising
Fundo Loans paid a $19,800 infringement notice after ASIC alleged its website claim about “no credit check loans” was misleading because applicants had to consent to credit checks and some checks were conducted. Payment is not an admission of liability.
Financial reporting instruments
ASIC consolidated multiple financial and sustainability reporting/audit relief instruments during September. ASIC says four new legislative instruments replaced 19 instruments approaching sunset, including consolidation designed to make relief and conditions easier to navigate.
ASIC also remade its low-volume financial markets instrument on 30 September and increased the relevant transaction-value threshold from $1.5 million to $2.5 million.
APRA
FAR simplification
APRA and ASIC’s FAR consultation proposes removing key-functions requirements from regulator rules and information on direct reports from accountability maps. Final changes are planned for late 2026 and are expected to take effect in early 2027.
Compliance teams in FAR entities should avoid prematurely changing maps but can identify processes that may become redundant.
ING liquidity-control action
APRA imposed licence conditions, increased liquidity requirements and a $50 million operational-risk capital add-on on ING Australia after the bank identified material miscalculations that had overstated its Liquidity Coverage Ratio over several years. APRA said the true LCR was substantially lower and at times fell below the 100% minimum. APRA required independent reviews, remediation and independent assurance.
The broader lesson extends beyond ADIs: regulatory reporting should be treated as a control environment, with data lineage, reconciliation, challenge and assurance.
Retirement Reporting Framework
APRA released revised draft reporting standards for the Government’s Retirement Reporting Framework on 10 September. Following industry feedback, APRA streamlined data requirements, refined methodologies and definitions and developed a new reporting practice guide. Final consultation closes 9 October 2026.
AUSTRAC
AUSTRAC’s September activity was heavily implementation-focused.
On 7 September, AUSTRAC reported that it had cancelled, suspended or refused renewal of 45 remittance and virtual-asset service provider registrations over the preceding year. Reasons included inactivity, insolvency, registration failures, failure to notify material changes and financial-crime risk.
AUSTRAC’s guidance register also records September updates to its professional-designated-services guidance, including clarification of the scope of designated services.
On 30 September, AUSTRAC published a suite of implementation material dealing with:
- customer due diligence and KYC;
- suspicious matter reports and what constitutes a high-quality SMR;
- threshold transaction and annual compliance reporting;
- AML/CTF program construction;
- compliance practices and record keeping; and
- practical educational resources.
The Transitional Rules remain particularly important to financial advisers because they expressly include a financial-adviser provision, as well as transition arrangements for customer due diligence, independent evaluations, and AML/CTF compliance officers.
AFSL implication: affected advice businesses should now be testing operational readiness rather than treating AML/CTF reform as a future legal project.
That means converting regulatory obligations into assigned responsibilities, functioning controls, appropriate records and evidence that management can use to assess whether implementation is working. The same principle applies more broadly across an AFSL’s compliance arrangements: documented obligations need to translate into controls that can withstand regulatory scrutiny. Our guide to building a defensible compliance framework provides a useful framework for assessing whether governance, monitoring, escalation and evidence operate effectively in practice.
AFCA
Scams Prevention Framework
September marked a significant implementation milestone. AFCA reported that 118 new organisations had joined the SPF, including 99 telcos, 16 digital platforms, and other organisations. AFCA’s expanded external dispute-resolution role for scam complaints begins on 31 March 2027.
Financial firms should anticipate complaints involving multiple organisations and increasingly complex questions of responsibility across banks, telecommunications providers and digital platforms.
AFCA Approach program
AFCA confirmed two FY2026–27 Approach projects:
| Sector | Approach |
|---|---|
| Insurance | Updated Approach to awarding interest |
| Banking & Finance | New Approach to credit reporting |
AFCA also began preparations for its 2027 Independent Review, with work underway on terms of reference, governance arrangements and appointment of the independent reviewer.
ATO
No September ATO development identified in the reviewed material was comparable in regulatory significance to the ASIC/APRA/AUSTRAC developments above for general AFSL compliance teams.
Operationally, the ATO Superannuation Dashboard recorded several September maintenance events and a short SBR outage on 28 September. The dashboard reported September availability of 99.34% for the relevant displayed service.
ATO developer material also recorded September updates to SMSF Alias lookup tables used in SuperStream validation.
These are primarily operational rather than conduct-regulation developments.
FAAA
FAAA’s public September media releases were comparatively light on substantive regulatory policy; its published policy platform nevertheless continues to identify CSLR sustainability, ASIC funding levies, breach-reporting rationalisation, advice-document costs, wholesale-client settings and financial-advice reform as key advocacy priorities.
The association’s current policy activity continues to reflect concerns about the consequences of Shield/First Guardian, CSLR costs and the AML/CTF changes for advice practices.
Financial Services Council
The FSC’s September policy update focused heavily on the Government’s response to Shield and First Guardian, including implications for superannuation/platforms, lead generation, financial advice, MIS regulation, SMSFs and the CSLR. It also tracked financial advice, tax and broader regulatory reform.
On 21 September, the FSC also responded to the 2026 Intergenerational Report, emphasising the role of superannuation and longer-term retirement-system sustainability.
For licensees, the more significant FSC signal remains the industry’s growing focus on product governance and the interaction between advice, platforms and investment-product failures.
Legislation.gov.au / Treasury legislative pipeline
The Federal Register confirms the AML/CTF Transitional Rules currently in force, including specific transitional provisions relevant to financial advisers.
A particularly important September policy development occurred outside the Register because it remains at consultation stage: Treasury opened consultation on enhanced MIS data collection. Options include expanded registration data, recurring data collection for registered schemes and possible requirements affecting unregistered MISs.
Treasury also opened consultation concerning application of the waterfall framework for the 2026–27 CSLR special levy, with consultation closing 6 October.
Cross-Agency Themes
Product governance is becoming end-to-end governance. Shield and First Guardian have expanded the regulatory focus beyond individual advice files. ASIC’s activity touches lead generation, adviser involvement, responsible-manager oversight, approved product lists, trustees, MISs and auditors. Treasury is now considering additional MIS data reporting.
Accuracy and data integrity are enforcement issues. APRA’s ING action and ASIC’s super-disclosure action demonstrate that inaccurate regulatory calculations and customer-facing information can produce substantive regulatory consequences even where the organisation otherwise has formal systems and documentation.
Regulators are simplifying administration selectively, not reducing substantive expectations. FAR streamlining and ASIC’s consolidation of reporting instruments reduce duplication, while enforcement simultaneously intensifies around operational effectiveness.
Scams and financial crime are converging with mainstream conduct risk. AFCA’s expanded scams jurisdiction and AUSTRAC’s implementation guidance mean scam prevention, customer identification, transaction monitoring and complaint handling increasingly need coordinated governance rather than separate compliance silos.
2027 readiness is now a current-year compliance issue. FAR changes, AFCA’s scams jurisdiction, the AFCA Independent Review and other implementation programs mean firms should already be budgeting, assigning ownership and modifying systems.
Strategic Recommendations for AFSL Compliance Teams
- Undertake a targeted lead-generation and advice-process review. Map every third-party lead source, remuneration pathway, scripted interaction and hand-off. Sample advice to establish whether advisers genuinely gather/assess client circumstances and exercise independent professional judgment. The September Shield/First Guardian outcomes make this a priority.
- Re-test the APL/product-governance framework. Document onboarding criteria, conflicts, liquidity considerations, risk ratings, due-diligence evidence, monitoring triggers and removal/escalation procedures. For higher-risk MISs, establish enhanced review thresholds.
- Conduct a cross-channel disclosure reconciliation. Compare PDSs, FSGs, websites, portals, calculators, marketing collateral and adviser templates. ASIC’s superannuation infringement notices demonstrate the risk created when one channel is accurate but another is not.
- Build AML/CTF implementation evidence now. Where reforms apply, maintain a board/management-approved implementation plan covering designated services, customer risk assessment, CDD, beneficial ownership, PEPs, source-of-funds/source-of-wealth controls, SMRs, record keeping, staff training, compliance-officer responsibilities and independent evaluation.
- Strengthen regulatory-data assurance. Identify regulatory returns and key compliance metrics whose accuracy depends on spreadsheets, manual adjustments or complex data transformations. Introduce ownership, reconciliation, exception reporting and independent validation proportionate to risk. APRA’s ING action provides a strong case study.
- Prepare for the scams EDR environment. Review scam complaints, reimbursement decisions, record retention and interactions with banks/platforms/telcos. Ensure complaints teams can preserve evidence relevant to multi-party scam disputes ahead of AFCA’s expanded jurisdiction on 31 March 2027.
- Track the immediate consultation calendar. The principal near-term dates arising from September monitoring are 2 October for FAR streamlining, 6 October for the CSLR special-levy consultation, 9 October for APRA’s Retirement Reporting Framework consultation and 23 October for Treasury’s MIS data consultation.
Overall compliance outlook
September reinforces a transition from documented compliance to demonstrable compliance. Regulators are increasingly testing whether governance arrangements generate reliable outcomes: whether advisers actually participate meaningfully in advice, whether responsible managers respond to warning signs, whether APL governance detects risky products, whether disclosures match underlying investments, whether regulatory calculations are accurate, and whether AML/CTF reporting communicates useful intelligence.
For AFSL compliance functions, the practical response is to increase control testing, data assurance and evidence of challenge, particularly across advice supervision, product governance, AML/CTF, disclosure management and third-party distribution.