Generalist lawyers once tackled regulatory challenges in the financial services sector. However, recent regulatory shifts and intensified intervention by regulators in the financial services sector have rendered generalised expertise insufficient. As a result, the regulatory lawyer specialisation is growing in demand.
Here, we take a look at the roles and responsibilities of financial services regulatory law specialists, growth drivers in the field and why this expertise is invaluable to mitigating risk in a shifting regulatory environment.
Regulatory specialisation requires navigating technical areas of financial services law, such as Chapters 5C & 7 of the Corporations Act, the ASIC Act and the Venture Capital Act (to name just a few). To remain competitive and manage regulatory risk, financial services businesses and their legal advisers must move beyond general advice to demonstrate specialist expertise and technical mastery. As a result, the demand for financial services regulatory law specialists has grown.
This shift is reflected in rankings like Best Lawyers Australia and The Legal 500, which now specifically recognise niche areas of technical expertise like funds management, superannuation law and fintech.
While there has always been a place for financial services regulatory law specialists, demand in this area has grown principally from extensive regulatory reform. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (known as the Hayne Royal Commission) was established in December 2017. Its goal was to investigate misconduct (such as criminal behaviour and systemic issues) within Australia's banking, financial services and superannuation industries.
Recommendations from the Hayne Royal Commission released in February 2019 sparked significant regulatory reforms, including in relation to consumer protection and sales practices, financial advice reform, the Financial Accountability Regime (FAR) and compensation scheme of last resort (among others). Where there was previously no clear definition of a financial services regulatory lawyer, the Hayne Royal Commission shed light on the need for specialists.
Combined with aggressive new civil penalty regimes, these changes have created a landscape where specialist legal navigation is the only way to ensure institutional resilience.
In an increasingly regulated environment, regulatory lawyers in the financial services sector must use a broad skill set to bridge technical law with the art of navigating and predicting optimal regulatory outcomes. Growth is occurring in new products and services, including crypto, digital assets and exchanges, and evolving services such as managed accounts. Regulatory activity in these growing areas inevitably ensues (i.e., implementation of new laws and enforcement by regulators).
In addition, funds lawyers must have specialist regulatory skills that go beyond fund formation and initial launch, helping funds management businesses navigate all manner of ongoing regulatory matters, including:
Practicing or aspiring financial services regulatory lawyers should choose employers with a vision in this area. One important question to ask as you develop your legal career is whether you wish to practice in a highly regarded and ever-evolving sector with long-term prospects, and work alongside sophisticated clients and colleagues.
To advance your career with a team of financial services regulatory law experts and develop your command of Australia’s complex regulatory landscape as it applies to financial services, and managed funds in particular, get in touch with PMC Legal today.
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