Regulatory Radar

Auditors, reporting entities, standard setters and advisers with an interest in the governance of Australia's financial and sustainability reporting standards may wish to review the exposure draft to understand how the three new standard setting boards will operate once External Reporting Australia is established on 1 December 2026. Entities preparing for upcoming sustainability reporting obligations in particular may want to monitor how the sustainability standards board's governance and procedures are finalised, given this body will have carriage of that standard setting function going forward. Submissions could be made before the consultation closes on 15 October 2026 if governance arrangements would affect stakeholder input into future standards.

Companies that currently claim the Research and Development Tax Incentive, and their tax advisers, could begin modelling how the proposed changes to the core and supporting activity distinction, the intensity premium threshold, the refundable offset age limit and the expenditure thresholds would affect their claims if the exposure draft proceeds largely unchanged. Businesses with long R&D project cycles or that rely on the refundable offset beyond ten years of operation may wish to consider making a submission before the consultation closes, given industry bodies have already raised concerns about those specific elements. As the measure is proposed to commence from 1 July 2028, there is time to plan, but early engagement may help shape the final design.

Businesses that regularly receive or may receive ACCC compulsory notices, including those with directors, officers or registered addresses overseas, may wish to review how the firm or the business currently accepts and logs service of such notices, so that any change to permitted service methods can be incorporated once the amendment is finalised. It may also be worth confirming internally who is authorised to accept service on behalf of the business, since greater flexibility in service methods could mean documents are validly served through channels not currently monitored.

Not for profit clients and charity boards could be alerted that a Treasury consultation is underway that may lead to the ACNC disclosing more information about deregistrations and finalised investigations than it currently does. Governance committees may wish to consider how any future public disclosure of investigation outcomes could affect reputational risk management and existing communications protocols. Advisers to the sector could also track the consultation outcome before finalising governance policies that assume investigation findings remain confidential once a matter concludes.

Employers that use non-compete clauses, co-worker non-solicitation terms or cascading restraints in employment contracts, particularly for staff earning below the high income threshold, may wish to review those clauses against the exposure draft ahead of any final legislation. Businesses negotiating sale of business agreements that rely on restraint of trade clauses should note the draft Bill does not currently extend the non-compete ban to those arrangements, though definitions and scope may change before introduction. Businesses with no-poach or wage-fixing arrangements with competitors could consider the implications of those arrangements being treated as cartel conduct.

Entities already subject to mandatory climate related financial disclosure may wish to consider whether to make a submission before the 2 October 2026 closing date, particularly on the proposed assurance pathway and on how supply chain information requests are scoped. Businesses that supply data to a reporting entity, without necessarily being in scope themselves, may also want to review the proposals on limiting information requests across value chains. No current reporting obligation changes as a result of this consultation, so any internal review at this stage is about shaping future settings rather than responding to an immediate compliance requirement.

Foreign investors holding conditional approvals under Australia's foreign investment framework, and their advisers, could use the review as a prompt to catalogue the specific conditions attached to each existing approval, particularly tax-related conditions given Treasury's stated initial focus. Businesses that consider a particular condition duplicates obligations they already meet under another regulatory regime, such as tax reporting or anti-money laundering requirements, may wish to consider making a submission identifying that overlap. Existing approval conditions remain binding during the review, so compliance arrangements should continue unchanged until Treasury confirms any variation specific to a given approval.

Registered tax practitioners should review their compliance with the Code of Professional Conduct ahead of 1 October 2026, given the introduction of new civil penalties specifically targeting Code breaches and the availability of contingent and interim suspension powers for registration failures or serious misconduct. Businesses that engage unregistered individuals or firms to provide tax agent services should be aware that new criminal and civil penalties will apply to unregistered conduct and false or misleading statements. Practitioners facing termination of registration should also note the extended ten year non-application period before reapplication is possible.

Insurers and distributors of add-on insurance products currently relying on the deferred sales model exemptions may wish to watch for the final regulations before the current exemptions expire on 5 October 2026, to confirm the extension has been made and that the classes of product they distribute remain covered. Distribution arrangements, point-of-sale scripts and systems built around the existing exempt classes should not need to change if the exposure draft is finalised as proposed, but it would be prudent to confirm the final list of exempt classes matches current sales practices once the regulations are made.

Accounting, auditing and consulting firms structured as partnerships could monitor Treasury's options paper and any government response for proposals affecting partnership governance, accountability for partner conduct, or oversight arrangements, given the consultation traces back to concerns raised in the PwC matter. Other professional services firms organised as partnerships, including law firms, may wish to watch this process as an indicator of broader thinking about partnership accountability, without assuming any reform will necessarily extend beyond the accounting and auditing sector specifically. Firms that made submissions to the earlier 2024 consultation may want to check whether the 2026 options paper responds to the issues they raised.