Every six months, the Australian Securities & Investments Commission (ASIC) releases a report titled ‘ASIC Enforcement Outcomes’, highlighting the matters where it has investigated and commenced enforcement action, and its strategic objectives for the next six-month period.
For those in the business community, the Enforcement report is a convenient guide to the issues on ASIC’s radar. Practically, keeping an eye on the issues that are of concern to ASIC is a good way for company directors, in-house lawyers and compliance officers to be alert to any internal compliance issues, and to any external threats that may be present in the market.
The January-June 2016 report indicates that ASIC will be taking a hard look at the following matters over the next 6 months:
IN THE FINANCIAL SERVICES AND CREDIT SPACE:
- structural change associated with an ageing population, including the superannuation and funds management sectors, and financial advice regarding retirement savings
- compliance with the Future of Financial Advice reforms
- complexity driven by financial innovation, including hybrid financial products and exchange-traded options, with a particular focus on ensuring consumer understanding
- responsible lending in the credit industry
- managed investment schemes – particularly compliance with disclosure, conducting and licensing obligations.
IN THE CORPORATE GOVERNANCE SPACE:
- misconduct by ‘corporate gatekeepers’ – directors and officers, auditors, insolvency practitioners, and business advisers
- poor corporate culture, leading to a lack of proper diligence or breaches of the law
- misuse of cross-border services and transactions, including online financial services platforms
- failures to respond or make appropriate disclosure regarding malicious cyber-threats
- misalignment between company disclosures and the expectations and understanding of investors
- serious ‘phoenix’ behaviour and improper transactions in the face of insolvency.
IN THE MARKETS SPACE:
- integrity of financial market benchmarks (eg the ongoing bank bill swap rate litigation)
- failure to meet disclosure obligations
- market abuse (eg the recent high profile insider trading prosecutions).