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Compliance

ASIC releases update on enforcement of financial misconduct

by Reporter5 minute read
ASIC

The corporate regulator has published an update of its enforcement work, which include its enforcement of misconduct relating to the provision of credit.  

The Australian Securities and Investments Commission (ASIC) has released an enforcement update for the six months from 1 July 2018 to 31 December 2018.

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The regulator has revealed that over the period, it resolved 56 financial services-related outcomes, 14 of which involved misconduct related to the provision of credit (11 cases of administrative misconduct and three cases of criminal misconduct).  

Additionally, ASIC reported that as at 1 January 2019, it has 15 criminal and 66 civil financial services-related matters underway that had not achieved a final result.

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Of those cases pending an outcome, six involve misconduct related to the provision of credit (four civil cases and two criminal cases).

Following the release of the enforcement update, deputy chair of ASIC Daniel Crennan commented: “In the past, this update has focused on immediate enforcement statistics, themes and case studies, and this report continues that approach.

“However, ASIC’s success as a regulator cannot and should not be measured solely on the outcomes of criminal and civil actions.

“What we want to achieve is a substantial improvement in culture and conduct – the willingness to act efficiently, honestly and fairly.”

Mr Crennan urged financial services entities to meet the standards and expectations of the broader community by better engaging with the regulator.  

“In line with public expectation and in the best interests of consumers and investors, civil or criminal matters brought by ASIC should not be treated by financial services firms as ‘ordinary’ litigation,” he said.

“ASIC and the Australian community expect financial services firms to demonstrate high levels of candour and cooperation in their dealings with us.

“Looking forward, our message to corporate Australia is that ASIC is focused on enforcement. As the [banking] royal commission found, this is what Australians expect of their regulator and this is what ASIC will deliver.”

The release of ASIC’s report follows the passage of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2019 through both houses of Parliament.

Under the bill, product providers will be obligated to specify the target market for each of their products, ensuring that the design of the products are consistent with the likely objectives, financial situation and needs of customers within that target market.

The obligations will be phased in over two years, requiring product issuers to identify in advance the consumers for whom the products are appropriate, and distribute to that target market.

[Related: ASIC’s new product intervention powers become official]

ASIC releases update on enforcement of financial misconduct
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