Reading List

Compliance: Theory and Practice in the Financial Services Industry

Reading List

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Notes

Where material is listed under "required pre-class reading", you are expected to read that material in advance of the relevant lecture so that you can discuss it in class. This material may be the subject of questions in the examination.

The recommended additional reading is for those who have a particular interest in, or who would like a reference source for additional materials on, a topic. You are not expected to read any of this additional material. It will only be the subject of questions in the examination if and to the extent that it is expressly dealt with in the lecture slides.

Students (particularly overseas students) who are not familiar with the role of ASIC in regulating financial services in Australia should, by way of general introduction to the course, read:

Chapter 1 of Baxt, Black and Hanrahan, Securities and Financial Services Law (6th edition 2003) LexisNexis Butterworths^^

1. Licensing

Required pre-class reading:
	Nil
Recommended additional reading:
	Lewis, "When is a Financial Product not a Financial Product?" (2004) 22 CSLJ 103^^
	ASIC Regulatory Guide 1 - AFS Licensing Kit: Part 1 — Applying for and varying an AFS licence
	ASIC Regulatory Guide 2 - AFS Licensing Kit: Part 2 — Preparing your AFS licence application
	ASIC Regulatory Guide 3 - AFS Licensing Kit: Part 3 — Preparing your additional proofs
	ASIC Regulatory Guide 36 - Licensing: Financial product advice and dealing
	ASIC Regulatory Guide 78 - Breach reporting by AFS licensees
	ASIC Regulatory Guide 98 - Licensing: Administrative action against financial services providers
	ASIC Regulatory Guide 104 - Licensing: Meeting the general obligations
	ASIC Regulatory Guide 105 - Licensing: Organisational competence
	ASIC Regulatory Guide 121 - Doing financial services business in Australia
	ASIC Regulatory Guide 146 - Licensing: Training of financial product advisers
	ASIC Regulatory Guide 166 - Licensing: Financial requirements
	ASIC Regulatory Guide 167 - Licensing: Discretionary powers
	ASIC Regulatory Guide 176 - Licensing: Discretionary powers - wholesale foreign financial services providers
	ASIC Regulatory Guide 185 - Non-cash payment facilities
	ASIC Pro Forma 209 - Australian financial services licence conditions

2. The Role of Compliance

Required pre-class reading:
	Australian Standard AS 3806-2006 - Compliance Programs^^
	FPA Guideline for Implementing the Australian Standard on Compliance (AS 3806-1998)^^
Recommended additional reading:
	Australian Standard AS 3806-1998 - Compliance Programs (superseded)^^
	Parker & Conolly, "Is there a Duty to Implement a Corporate Compliance System in Australian Law?" (2002) 30 ABLR 273
	Carroll & McGregor-Lowndes, "A Standard for Regulatory Compliance? Industry Self-regulation, the Courts and AS3806–1998" (2001) 60 Australian Journal of Public Administration 80
	Parker, "Evaluating Regulatory Compliance: Standards and Best Practice" (1999) 7 TPLJ 62
	Parker, "The Emergence of the Australian Compliance Industry: Trends and Accomplishments" (1999) 27 ABLR 178
	Basel Committee on Banking Supervision, "Compliance and the Compliance Function in Banks" (April 2005)
	Basel Committee on Banking Supervision, "Framework For Internal Control Systems In Banking Organisations" (September 1998)
	Basel Committee on Banking Supervision, "Sound Practices for the Management and Supervision of Operational Risk" (February 2003)
	IOSCO, "Compliance Function at Market Intermediaries" (March 2006)
	US Federal Reserve Board, "Manual on Trading and Capital-Markets Activities" – sections 2150 on ethics and 2070 on legal risk

3. Insider Trading and Chinese Walls

Required pre-class reading:
	ASIC v Citigroup Global Markets Australia Pty Limited (No. 4) [2007] FCA 963, paragraphs 466-598^^
	ASX Market Rules Guidance Note 13 - Prohibition of Advice to Clients^^
	SEC Report, "Broker-Dealer Policies and Procedures Designed to Segment the Flow and Prevent the Misuse of Material Non-public Information" [1990] Fed Sec Law Reports ¶84,520^^
	NYSE/NASD Info Memo 91-22 - Chinese Walls Policies and Procedures^^
	Slade v. Shearson, Hammill & Co., Inc, selected judgments^^
Recommended additional reading:
	Rubenstein, "The Regulation and Prosecution of Insider Trading in Australia: Towards Civil Penalty Sanctions for Insider Trading " [2002] CSLJ 89
	Goldwasser, "Recent Developments in the Regulation of Chinese Walls and Business Ethics - In Search of a Remedy for a Problem that Persists" [1993] CSLJ 227
	Doty and Powers, "Chinese Walls: The Transformation of a Good Business Practice" (1988) 26 American Criminal Law Review 155
	Bollen, "Research Analysts and the Australian Market Misconduct Regime" [2003] MurUEJL 19
	NYSE Disciplinary Proceedings 98-069
	ASIC Regulatory Guide 62 - Better disclosure for investors
	ASIC Regulatory Guide 73 - Continuous disclosure obligations: Infringement notices
	ASIC Regulatory Guide 95 - Disclosing entity provisions relief
	ASIC Regulatory Guide 198 - Unlisted disclosing entities: Continuous disclosure obligations
	ASX Listing Rules Guidance Note 8 - Continuous Disclosure

4. Market Conduct Rules

Required pre-class reading:
	Summary of ASX Business Rules Guidance Note 8/00^^
	ASX Business Rules Guidance Note 8/00 - Trading Practices^^
Recommended additional reading:
	ASIC Regulatory Guide 196 - Short selling
	ASX Market Rules Guidance Note 1 - Prevention of Manipulative Trading - Transactions Involving no Change in Beneficial Ownership
	ASX Market Rules Guidance Note 11 - Client Order Priority
	ASX Business Rules Guidance Note 12/01 - Order Record Keeping
	ASX Business Rules Guidance Note 11/97 - Short Selling
	SFE Practice Note 3 - Taking Other Side of Client Order^^
	SFE Practice Note 30 - Market Practices^^

5. Shareholding Restrictions

Required pre-class reading:
	Nil
Recommended additional reading:
	ASIC Regulatory Guide 5 - Relevant interests in unissued share capital
	ASIC Regulatory Guide 6 - Variation of takeover offers
	ASIC Regulatory Guide 9 - Relevant interests in shares
	ASIC Regulatory Guide 11 - Disclosure of offerors' intentions in takeover documents
	ASIC Regulatory Guide 25 - Takeovers: false and misleading statements
	ASIC Regulatory Guide 27 - Takeovers: minimum acceptance conditions
	ASIC Regulatory Guide 31 - Acquisitions and disposals by a broker acting as principal
	ASIC Regulatory Guide 35 - Collateral benefits in takeovers
	ASIC Regulatory Guide 37 - Takeovers - financing arrangements
	ASIC Regulatory Guide 48 - Takeovers aspects of options over shares
	ASIC Regulatory Guide 59 - Announcing and withdrawing takeover bids (s653 and s746)
	ASIC Regulatory Guide 71 - Downstream acquisitions
	ASIC Regulatory Guide 74 - Acquisitions agreed to by shareholders
	ASIC Regulatory Guide 86 - Tracing beneficial ownership
	ASIC Regulatory Guide 102 - Tender offers by vendor shareholders
	ASIC Regulatory Guide 128 - Collective action by institutional investors
	ASIC Regulatory Guide 143 - Takeovers provisions: Warrants
	ASIC Regulatory Guide 145 - Collateral benefits - Takeovers funding and pre-bid purchases
	ASIC Regulatory Guide 159 - Takeovers, compulsory acquisitions and substantial holdings
	ASIC Regulatory Guide 163 - Takeovers: Minimum bid price principle: s621
	ASIC Regulatory Guide 171 - Anomalies and issues in the takeover provisions
	ASIC Regulatory Guide 199 - Broadening the rights issue and dividend reinvestment plan exceptions for takeovers
	ASIC Regulatory Guide 222 - Substantial holding disclosure: Securities lending and prime broking
	Treasury, "Australia's Foreign Investment Policy" (January 2011)
	Takeovers Panel Guidance Notes

6. Competition and Consumer Law

Required pre-class reading:
	Nil
Recommended additional reading:
	Parker and Nielsen, "Do Businesses Take Compliance Systems Seriously? An Empirical Study of the Implementation of Trade Practices Compliance Systems in Australia" [2006] MULR 15
	ACCC, "Best and Fairest" Compliance Manual: a Trade Practices Training Program (September 2002) (currently under review)
	ACCC, Corporate Trade Practices Compliance Programs (November 2005)
	ACCC, Small Business and the Trade Practices Act (September 2010)
	ACCC, Advertising and Selling (January 2007)
	ACCC, Guide to Unconscionable Conduct (May 2008)
	ACCC, A Guide to the Unfair Contract Terms Law (June 2010)
	ASIC Regulatory Guide 96 - Debt collection guideline for collectors and creditors
	ASIC Regulatory Guide 201 - Unsolicited credit cards and debit cards
	ASIC Regulatory Guide 220 - Early termination fees for residential loans: Unconscionable fees and unfair contract terms

7. Combating Crime

Required pre-class reading:
	Nil
Recommended additional reading:
	Fisse, "Minimising Exposure to Liability under the New Legislation: Developing Effective Corporate Compliance Systems", Chapter 19 from Fisse, Fraser & Coss, The Money Trail: Confiscation of Proceeds of Crime, Money Laundering and Cash Transaction Reporting (1992) The Law Book Company Limited
	Daley, "Effectiveness of United States and International Efforts to Combat International Money Laundering" (2000) Saint Louis-Warsaw Transatlantic Law Journal 175
	Wilder and Ahrens, "Australia’s Implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions" [2001] MelbJIL 22
	Basel Committee on Banking Supervision, "Customer Due Diligence for Banks" (October 2001), "General Guide to Account Opening and Customer Identification" (February 2003) and "Consolidated KYC Risk Management" (October 2004)
	Austrac Regulatory Guide
	Austrac Typologies and Case Studies Reports
	Austrac Guideline No 1 - Suspect Transaction Reporting
	Addendum 1: Suspect Transaction Reporting - The Use Of Cheques In Money Laundering
	Addendum 5: Suspect Transaction Reporting - Identifying Suspect Transactions by Call Centres
	Austrac Guideline No 4 - Merchant Bankers and Stock Brokers Suspect Transaction Reporting
	Enclosure 1: Areas of Suspect Activity - Money Laundering
	Enclosure 2: Areas of Suspect Activity - Tax Evasion
	Enclosure 3: Areas of Suspect Activity - Corporate Fraud
	Enclosure 4: Areas of Suspect Activity - Securities Offences
	Austrac Information Circular No 31 - Guidance for Financial Institutions in Detecting Terrorist Financing Activities
	Austrac Guidance Note 08/02 - AML/CTF Compliance Officers
	Austrac Guidance Note 08/04 - Record-keeping Requirements
	Austrac Guidance Note - Risk management and AML/CTF programs
	Austrac Guidance Note - Correspondent banking
	Public Legal Interpretation No. 2 – Item 54 of table 1 in section 6 of the AML/CTF Act
	Public Legal Interpretation No. 4 – What constitutes a reporting entity
	Public Legal Interpretation No. 6 – Suspect transactions and suspicious matter reports
	Public Legal Interpretation No. 7 – Significant cash transaction and threshold transaction reports
	Public Legal Interpretation No. 8 - Cross-border movements
	Public Legal Interpretation No. 9 – Customer identification requirements under the AML/CTF Act
	Public Legal Interpretation No. 10 - Agency and the AML/CTF Act
	Public Legal Interpretation No. 11 - Electronic funds transfer instructions and international funds transfer instructions

8. Retail Customer Obligations and Marketing Financial Products

Required pre-class reading:
	Nil
Recommended additional reading:
	Australian Standard AS ISO 10002-2006 Customer Satisfaction - Guidelines for Complaints Handling in Organizations^^
	ASIC Regulatory Guide 23 - Updating and correcting prospectuses and application forms
	ASIC Regulatory Guide 38 - The hawking provisions
	ASIC Regulatory Guide 53 - The use of past performance in promotional material
	ASIC Regulatory Guide 55 - Disclosure documents and PDS: consent to quote
	ASIC Regulatory Guide 56 - Prospectuses
	ASIC Regulatory Guide 65 - Section 1013DA disclosure guidelines
	ASIC Regulatory Guide 66 - Transaction specific disclosure
	ASIC Regulatory Guide 69 - Debentures - improving disclosure for retail investors
	ASIC Regulatory Guide 70 - Prospectuses for cash box and investment companies
	ASIC Regulatory Guide 72 - Foreign securities prospectus relief
	ASIC Regulatory Guide 90 - Example Statement of Advice for a limited financial advice scenario for a new client
	ASIC Regulatory Guide 97 - Enhanced fee disclosure regulations: Questions and answers
	ASIC Regulatory Guide 99 - Quotation of securities offered by prospectus
	ASIC Regulatory Guide 107 - Electronic prospectuses
	ASIC Regulatory Guide 125 - Share purchase plans
	ASIC Regulatory Guide 126 - Compensation and insurance arrangements for AFS licensees
	ASIC Regulatory Guide 141 - Offers of securities on the Internet
	ASIC Regulatory Guide 150 - Electronic applications and dealer personalised applications
	ASIC Regulatory Guide 151 - Fundraising: Discretionary powers
	ASIC Regulatory Guide 152 - Lodgment of disclosure documents
	ASIC Regulatory Guide 154 - Certificate by a qualified accountant
	ASIC Regulatory Guide 155 - Debenture prospectuses
	ASIC Regulatory Guide 156 - Debenture advertising
	ASIC Regulatory Guide 158 - Advertising and publicity for offers of securities
	ASIC Regulatory Guide 165 - Licensing: Internal and external dispute resolution
	ASIC Regulatory Guide 168 - Disclosure: Product disclosure statements (and other disclosure obligations)
	ASIC Regulatory Guide 169 - Disclosure: Discretionary powers
	ASIC Regulatory Guide 170 - Prospective financial information
	ASIC Regulatory Guide 173 - Disclosure for on-sale of securities and other financial products
	ASIC Regulatory Guide 175 - Licensing: Financial product advisers – Conduct and disclosure
	ASIC Regulatory Guide 182 - Dollar disclosure
	ASIC Regulatory Guide 189 - Disclosure relief for rights issues
	ASIC Regulatory Guide 190 - Offering securities in New Zealand and Australia under mutual recognition
	ASIC Regulatory Guide 221 - Facilitating online financial services disclosures

9. Miscellaneous Compliance Issues

Required pre-class reading:
	Bonds & Securities Trading Pty Ltd v Glomex Mines NL [1971] 1 NSWLR 879^^ - summary on website
	ASIC v Citigroup Global Markets Australia Pty Limited (No. 4) [2007] FCA 963, paragraphs 254 - 456 (included in reading for Lecture 3)
Recommended additional reading:
	Tuch, "Investment Banks as Fiduciaries: Implications for Conflicts of Interest" [2005] MULR 15
	Matthews, "Internal Corporate Investigations" (1984) 45 Ohio State Law Journal 655
	SIA/SDIA Best Practice Guidelines for Research Integrity
	ASIC Regulatory Guide 79 - Managing conflicts of interest: An ASIC guide for research report providers
	ASIC Regulatory Guide 181 - Licensing: Managing conflicts of interest
	ASIC Regulatory Guide 212 - Client money relating to dealing in OTC derivatives

10. Managed Investments

Required pre-class reading:
	Nil
Recommended additional reading:
	ASIC Regulatory Guide 80 - Managed investment schemes - interests not for money
	ASIC Regulatory Guide 94 - Unit pricing: Guide to good practice (joint publication with APRA)
	ASIC Regulatory Guide 105 - Licensing: Organisational competence (paragraphs 34, 37, 45, 65 and 80-82)
	ASIC Regulatory Guide 116 - Commentary on compliance plans: Agricultural industry schemes
	ASIC Regulatory Guide 117 - Commentary on compliance plans: Financial asset schemes
	ASIC Regulatory Guide 118 - Commentary on compliance plans: Contributory mortgage schemes
	ASIC Regulatory Guide 119 - Commentary on compliance plans: Pooled mortgage schemes
	ASIC Regulatory Guide 120 - Commentary on compliance plans: Property schemes
	ASIC Regulatory Guide 127 - Additional investments in managed investment schemes
	ASIC Regulatory Guide 132 - Managed investments: Compliance plans
	ASIC Regulatory Guide 133 - Managed investments: Scheme property arrangements
	ASIC Regulatory Guide 134 - Managed investments: Constitutions
	ASIC Regulatory Guide 136 - Managed investments: Discretionary powers and closely related schemes
	ASIC Regulatory Guide 148 - Investor directed portfolio services
	ASIC Regulatory Guide 149 - Nominee and custody services
	ASIC Regulatory Guide 166 - Licensing: Financial requirements (paragraphs 63-86)
	ASIC Regulatory Guide 167 - Licensing: Discretionary powers (paragraphs 18-23, 85 and 89)
	ASIC Regulatory Guide 178 - Foreign collective investment schemes
	ASIC Regulatory Guide 179 - Managed discretionary account services
	ASIC Pro Forma 209 - Australian financial services licence conditions (paragraphs 1, 14-19 and 34-46)
	IFSA Standard 1 - Code of Ethics & Code of Conduct
	IFSA Standard 14 - IFSA/FPA Industry Code of Practice on Alternative Forms of Remuneration in the Wealth Management Industry
	IFSA Standard 15 - IFSA/FPA Industry Guide on Rebates & Related Payments in the Wealth Management Industry
	IFSA Standard 17 - Incorrect Pricing of Scheme Units - Correction and Compensation
	IFSA Guidance Note 7 – Personal Trading
	IFSA Guidance Note 8 - Related Party Transactions
	IFSA Guidance Note 10 - Brokerage Arrangements
	IFSA Guidance Note 24 - IFSA/FPA Guidance on Managing Mutual Obligations Under Chapter 7 of the AML/CTF Rules

11. Deposit Products, Non-Cash Payment Facilities, FHSA Products, Credit Facilities and ASX Stockbroking

Required pre-class reading:
	Lecture slides for Lecture 3 (Insider Trading and Chinese Walls), Lecture 4 (Market Conduct Rules) and Lecture 11D (Stockbroking)
	Part B 2002 Examination Paper (problem to be discussed in class)^^
Recommended additional reading:
	Code of Banking Practice
	Mutual Banking Code of Practice (Building Societies and Credit Unions)
	Electronic Funds Transfer Code of Practice
	ASIC Regulatory Guide 40 - Good transaction fee disclosure for bank, building society and credit union deposit and payments products (transaction accounts)
	ASIC Regulatory Guide 202 - Credit registration and transition
	ASIC Regulatory Guide 203 - Do I need a credit licence?
	ASIC Regulatory Guide 204 - Applying for and varying a credit licence
	ASIC Regulatory Guide 205 - Credit licensing: General conduct obligations
	ASIC Regulatory Guide 206 - Credit licensing: Competence and training
	ASIC Regulatory Guide 207 - Credit licensing: Financial requirements
	ASIC Regulatory Guide 208 - How ASIC charges fees for credit relief applications
	ASIC Regulatory Guide 209 - Credit licensing: Responsible lending conduct obligations
	ASIC Regulatory Guide 210 - Compensation and insurance arrangements for credit licensees
	ASX, Audio Visual Presentations for New Investors
	ASX, Getting Started in Shares
	ASX, CHESS - Clearing House Electronic Subregister System
	ASX, Options - a Simple Guide
	ASX, Understanding Options Trading
	ASX, Low Exercise Price Options Explanatory Booklet
	ASX, Understanding Trading and Investment Warrants
	ASX, Understanding ASX Listed CFDs
	ASX, Introduction to Index Futures and Options

12. Derivatives, Warrants, ASX 24 Futures, FX, Financial Planning and Margin Lending

Required pre-class reading:
	Nil
Recommended additional reading:
	Chapters 12-15 of Carew, Fast Money 4: the Best Selling Guide to Australia's Financial Markets (1998) Allen & Unwin^^
	SFE, Sydney Futures Exchange - An Introduction
	SFE Practice Note 23 - Provision of Credit to Clients^^
	SFE Practice Note 31 - House and Client Clearing Accounts^^
	FPA Code of Professional Practice
	ASIC Regulatory Guide 219 - Non-standard margin lending facilities: Disclosure to investors

13. Insurance, Superannuation and RSAs

Required pre-class reading:
	Nil
Recommended additional reading:
	General Insurance Code of Practice
	General Insurance Brokers’ Code of Practice
	Life Insurance Circular C.I.1 – Derivatives - Use, Management and Control
	Superannuation Circular II.D.7 – Derivatives
	ASIC Regulatory Guide 84 - Super switching advice: Questions and answers
	ASIC Regulatory Guide 184 - Superannuation: Delivery of product disclosure for investment strategies
	ASIC Regulatory Guide 200 - Advice to super fund members

^^ These materials will be handed out on CD at the commencement of the course.

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