Every few years, ASIC releases a ‘Corporate Plan’ where they outline their focus areas and strategic plan to achieve their vision and mission. Recently, they released their 2018-19 to 2021-22 plan. ASIC’s updated vision is to ‘provide a fair, strong, and efficient financial system for all Australians’, a vision underpinned by the ‘recognition that every dollar in the financial system is other people’s money.’ Below, we’ve highlighted some of the relevant focus areas for ASIC that have particular relevance for our clients.
2018-2019 Focus Areas
In the context of the Financial Services Royal Commission, it is to be expected that one of ASIC’s 2018-19 focus areas is practices which target financial vulnerable consumers. This theme can be seen in several of ASIC’s identified focus areas. For example, there has been a shift from focusing on remuneration, reward structures and conflicts of interest, to practices relating to the provision of consumer credit, buy now, pay later products, use of consumer data and the targeting of vulnerable consumers (such as low income and older Australians). To this end, ASIC has indicated it will publish revised guidance on responsible lending conduct by June 2019.
Another topical focus area identified by ASIC is potential harm from technology driven by the growing digital and structural changes in financial services and markets. ASIC has specifically identified that it will be monitoring emerging products such as cryptocurrencies and initial coin offerings (ICOs). ASIC has also indicated it will develop an approach for applying the principles for regulating market infrastructure providers to crypto-exchanges.
For those companies who plan to take advantage of the new crowd-sourced funding legislation, the report also indicates that ASIC will be undertaking a spot-check of offer documents used in crowd-sourced funding transactions, with a focus on disclosure obligation compliance.
For international organisations and cross-border transactions, ASIC is aware that increased global uncertainty and a more nationalistic approach to regulation in many jurisdictions may lead to increasingly inconsistent international regulation and policy settings. To reduce liability resulting from such inconsistencies and promote uniformity, ASIC has indicated it will focus on assessing foreign businesses’ compliance with domestic regulation, manage international developments which may affect market infrastructure, and act where cross-border transactions affect fair and efficient markets.
ASIC’s Practical Strategies
Some of ASIC’s other new projects include:
establishing a dedicated taskforce to conduct reviews to identify and pursue corporate governance failings in listed companies;
implementing a panel of reviewing liquidators funded through the AA Fund (which ASIC administers) to target facilitation of illegal phoenix behaviour by registered liquidators; and
reviewing ASIC’s approach for regulating timeshare holiday schemes.
The full-version of ASIC’s 2018-19 to 2021-22 corporate plan can be found on its website.
If you would like to discuss any of the above matters with our team, please get in touch.