The federal government has moved with commendable speed to minimise the impact of some laws to ensure professionals can work through the impacts of COVID-19, but sometimes they have gone too far.
Exhibit A was last week’s decision by Treasurer Josh Frydenberg to delay banking royal commission reform relating to mortgage brokers.
ASIC followed through and said brokers’ legal obligation to act in a client’s best interests would be delayed by six months to January next year.
Why ?
You would think now more than ever that mortgage brokers should be acting in the best interests of their clients. So why would ASIC delay the implementation of laws already approved?
Just whose interests a broker would operate in for the next six months other than his or her client is difficult to determine.
ASIC said the delays were to free participants from commitments to ensure immediate priority could be on issues linked to the coronavirus.
That doesn’t provide any more insight.
On another issue, the equity raising boom has continued with Incitec Pivot raising $600 million in an underwritten placement combined with a $75 share purchase plan.
The underwriters were JP Morgan, Merrill Lynch and Macquarie (continuing its run of being involved in over a third of all issues).
The issue, at an 8.7 per cent discount to market, is no doubt already allocated but the underwriters always add a little note inviting private client brokers to participate in the issue along with the big brokers’ clients.
No amount is set aside for the retail brokers and no surprises for guessing that on popular issues they miss out.
The invitations are presumably issued to satisfy concerns that with issues like this which increase shares on issue by 18.6 per cent and retail holders are limited to $75 million in stocks, dilution is all but guaranteed.
Cochlear at least increased the purchasing plan to let its small holders get a chance to avoid dilution.
Maybe the big brokers could allocate a portion for retail brokers or just discard the pretence altogether.
Westpac sends jobs to Manila
Westpac is to move almost 200 jobs in SA and NSW to The Philippines, sparking condemnation from the Finance Sector Union, which claimed workers held concerns about the security of customer data.
NAB shares tumble 8pc on earnings drop
The big four bank’s shares took a big hit after it saw higher expenses and arrears in the first quarter, as margins were squeezed.