“Our goal is to create a culture of compliance across Australia’s financial system and the corporate sector more generally through decisive and high-profile enforcement action,” said Sarah Court, ASIC’s Deputy Chair, presenting the regulator’s annual report.
A focus on member services failures, and misconduct relating to the erosion of superannuation balances, are two of the new priorities ASIC has adopted for 2024.
Chair Joe Longo had announced that the Commission will target misconduct in superannuation sector, and that it will “look to take strong, targeted enforcement action in the coming months and into 2024”.
Other new priorities will be the handling of insurance claims, compliance with financial hardship obligations, and the reportable situation regime.
20 criminal convictions
Last year, the Commission laid out progressive enforcement priorities and has been in court almost every business day since then. The actions involved some of Australia’s biggest companies, including the landmark victory against against New Zealand Banking Group Limited where the company undertook a A$2.5 billion ($1.6 billion) institutional share placement in 2015 and did not disclose material placement subscriptions allocated to underwriters.
Other actions related to greenwashing, financial hardship policies, unlicensed conduct, breaches of continuous disclosure laws and directors’ duties, and more.
“We are taking matters to court and pursuing higher penalties than ever before. In delivering against our priorities this year, we took action against some of Australia’s biggest corporations. And we are not deterred from taking challenging cases where legal outcomes are not guaranteed,” Court said.
Actions resulted in almost A$150m ($98m) in civil penalties and more than 20 criminal convictions. By the end of September, 27 directors had been disqualified or removed, and 58 individuals or companies had been banned from providing financial services or credit activities.
“Our goal is to create a culture of compliance across Australia’s financial system and the corporate sector more generally through decisive and high-profile enforcement action.”
Sarah Court, Deputy Chair, ASIC
Enforcement priorities for 2024 are set around:
- enforcement action targeting poor distribution of financial products;
- misleading conduct in relation to sustainable finance including greenwashing;
- high-cost credit and predatory lending practices to consumers and small business;
- member services failures in the superannuation sector;
- misconduct resulting in the systematic erosion of superannuation balances;
- insurance claims handling;
- compliance with the reportable situation regime;
- conduct affecting small business including small business creditors;
- enforcement action targeting gatekeepers facilitating misconduct;
- misconduct relating to used car financing to vulnerable consumers including brokers, car dealers and finance companies;
- compliance with financial hardship obligations; and
- technology and operational resilience for market operators and market participants.
Even though ‘Enforcement action targeting poor distribution of financial products’ covers a wide basis, notable omissions from the priorities are a direct focus on misconduct through social media and ‘finfluencer’ conduct, and around cryptocurrencies.
The enduring priorities include:
- misconduct damaging market integrity – including insider trading, continuous disclosure breaches and market manipulation;
- misconduct affecting First Nations people;
- misconduct involving a high risk of significant consumer harm – particularly conduct targeting financially vulnerable consumers;
- systemic compliance failures by large financial institutions;
- new or emerging conduct risks within the financial system; and
- governance and directors’ duties failures.