Offshore entities – ACCC Guidance on Open Banking Accreditation

By Jim Bulling and Felix Charlesworth

As part of its release of the ‘Consumer Data Right Rules Framework’ (Framework), the Australian Competition and Consumer Commission (ACCC) has outlined its accreditation process for entities seeking to become accredited data recipients under the Open Banking Regime.

While Authorised Deposit-taking Institutions (ADIs) will have access to a streamlined accreditation process, all other applicants will need to meet criteria such as:

• whether they satisfy a ‘fit and proper’ person test;
• the appropriateness and proportionality of the applicant’s systems, resources and procedures;
• the adequacy of the applicant’s internal and external dispute resolution processes; and
• whether the applicant holds appropriate insurance.

Notably, the ACCC does not propose to recognise accreditation in any overseas jurisdiction at this stage. Rather, any foreign applicant that is seeking to obtain accreditation will be required to appoint a local agent that will be responsible for any obligations of the foreign entity and may be liable for any breaches or penalties. The ACCC proposes that the effect of this proposal will be similar to the current requirement for registered foreign companies to appoint a local agent.

However, given the distinct differences between a registered foreign company under the Corporations Act and an accredited foreign company under the Open Banking Regime, this gives rise to several issues which are not explored within this initial Framework.

Some issues for consideration which may need further clarification by the ACCC are as follows:

• will the local agent’s liabilities be extended beyond breaches of the Corporation Act and include any contravention of privacy and consumer legislation?
• will the local agent be in a purely inactive capacity (i.e. only responsible for the foreign applicant’s breaches) or will it play a more active role?
• will the local agent hold any customer data at any time or will it be passed directly from a Bank to the foreign accredited data recipient?

Submissions on the Framework can be made via the ACCC’s consultation hub which closes on Friday 12 October 2018.