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Review of the ePayments Code

The corporation regulator is looking to update the ePayments code.

Last week, the Australian Securities and Investment Commission (ASIC) released their review of the ePayments code and opened consultation, which will close on 5 April.

This review of the 2010 code is related to what the regulator has described as ‘significant changes’ in the payments’ space over the last 19 years.

According to Consultation Paper 310, entitled Review of the ePayments code: Scope of the Review, ASIC is looking to ensure the code is still relevant when considering the many developments that have occurred in the payments’ space and that the requirements of the code itself are clear and easy to understand.

According to the Consultation Paper:

Our review—and any amendments resulting from it—is an interim measure while the Government undertakes further work to determine how best to implement the recommendation in the final report of the Financial System Inquiry (FSI) in 2014 to mandate the Code.

The FSI final report called for:

Clearer graduated payments regulation Enhance graduation of retail payments regulation by clarifying thresholds for regulation by the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority. Strengthen consumer protection by mandating the ePayments Code. Introduce a separate prudential regime with two tiers for purchased payment facilities.

The Government response, published in 2015, indicated agreement with the graduated regulatory approach.

This means supporting the financial industry regulators, and clarifying ASIC’s powers and those of the Reserve Bank of Australia (RBA) so they can effectively monitor the new payments’ space. The report also specifically mentions digital currencies.

The Government’s response indicated that:

ASIC will mandate baseline consumer protections in the ePayments Code, subject to the code being fit for purpose and technologically neutral.

It has not yet been announced when the consultation process for applying the FSI recommendation to the payments’ space will begin.

The four key areas under consideration for the consultation include:

  • Complaints handling

  • Unauthorised transactions

  • Data reporting

  • Mistaken internet payments.

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