22-349MR ASIC’S Enforcement and Regulatory Update July to September 2022

On 12 December 2022, ASIC released its updated quarterly report (REP 753) that outlined its key actions undertaken over the previous quarter.

This report focused on ASIC enforcement and regulatory actions that covered the following sectors:  insurance, credit, superannuation, financial advice, managed investments, markets and auditing.

ASIC also highlighted its upcoming internal and external priorities. With its internal priority being the modernisation of business registers and processes to improve its use of resourcing and technologies to allow them to take full advantage of data and analytical capabilities. This will greatly enable their enforcement teams to make progress in the jurisdiction.

Externally, and in the marketplace, ASIC is prioritising the oversight of activities relating to retirement decision-making, sustainable financing, technology-associated risks and design and distribution obligations of licensees. ASIC’s Chair, Joseph Longo, stated in the report that:

“ASIC is looking to the longer term and planning over the next four years. But we’ve seen that scenarios can change quickly. We remain alert to changes and developments in our operating and regulatory environment, and we will continue to make rapid, strategic decisions to adapt where needed. When we do so, it will be transparent.”

Enforcement

Of particular note from an enforcement perspective for licenced financial services businesses was that the first stop order was issued under the relatively new design and distribution obligations (DDO).

The DDO were introduced to ensure customer centric product design, advertising and distribution. Civil penalty proceedings have also been commenced by ASIC with respect to DDO for poor target-market placement practices.

ASIC has also highlighted the financial penalties awarded by the courts for the sums of $14.5 million and $7.2million to AMP and Dixon Advisory respectively.

Supervision

ASIC continues to release updated regulatory guidance and other materials to the market, including further information about their regulatory surveillance and reform outcomes.

Operators in the ASIC regulated market should familiarise themselves with any changes that may impact their sector. Over the past quarter, ASIC published several guidance documents, including (but not limited to):

22-206MR – ASIC publishes updated Financial Services and Credit Panel regulatory guidance and new ‘your rights’ infosheet;

22-214MR – ASIC’s approach to breach reporting: implementation of reportable situations regime;

22-213MR – ASIC’s surveillance of internal dispute resolution in superannuation identifies concerns;

22-173MR – ASIC releases guidance for superannuation calculators and retirement estimates; and

22-241MR – ASIC review finds room for improvement remains with life insurance claims handling.

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Authored by: 

Matthew Bode, Partner
Elizabeth Ziegler, Associate
Monty Frankish, Paralegal