The best interest duty mortgage broker reforms that came out of the banking royal commission have been postponed for six months.
The commencement date for mortgage broker reforms has been set for January 1 2021 by the Australian Securities and Investment Commission.
The reforms have been postponed in the midst of the coronavirus pandemic to allow the industry to focus on other immediate priorities.
The best interest duty for mortgage brokers places onus on them to place their clients’ interests ahead of their own.
ASIC hopes to release the final guidance on the reform by the middle of this year, which would please the industry which wants finalization as soon as possible.
The government’s timetable for the royal commission recommendation implementation will be introduced into parliament by December 2020 instead of 30 June 2020, and the actual introduction of the measures has been pushed back to June 30 2021.
The decision was based on trying to balance the need to implement the recommendations with the need to fight the challenges posed by the coronavirus pandemic.
Up until this point, the government has so far implemented 24 royal commission recommendations and has progressed another 35 through the consultation and preparation stages of draft legislation.