ASIC expands strategic priorities for next 12 months
ASIC’s recently published corporate plan for 2024-25 includes a new strategic priority to include private markets and emerging financial products.
ASIC chair Joe Longo stated:
While Australia’s private markets are dwarfed in size by our listed equity markets, their opacity presents an outside risk to market integrity, particularly as more investors become exposed. The addition of a new strategic priority aimed at driving consistency and transparency across markets and products puts all market participants on notice.
This comes on the back of Chair Longo’s recent comments about greater regulation of private credit.
The new priority will include a focus on:
- reviewing the growth in private markets and examining the implications for the integrity and efficiency of public markets. The expected timeframe for this activity is at least two years;
- creating a central co-ordination function to monitor and engage entities on digital assets, tokenisation and decentralised finance. The expected timeframe for this activity is also at least two years; and
- monitoring financial reporting and audit firms, including carrying out a surveillance of financial reports of unlisted entities that are of public interest.
These are the other strategic priorities listed in ASIC’s 2024-25 corporate plan:
Improve consumer outcomes
This will include:
- ensuring compliance with the design and distribution obligations regime;
- monitoring the internal dispute resolution (IDR) arrangements, including a cross-sector surveillance of compliance with the requirements in ASIC regulatory guide 271. Complaints data will also be published; and
- acting against credit misconduct that exploits financially vulnerable consumers.
Address financial system climate change risk
This will include:
- supporting the introduction of mandatory climate-related financial disclosure for large Australian businesses and financial institutions;
- undertaking ongoing surveillance activity to prevent harm from greenwashing and other sustainable finance-related misconduct. ASIC subsequently reported it made 47 regulatory interventions to address greenwashing misconduct during the 15-month period to 30 June 2024; and
- supporting sustainability and energy transition, including that there is a fair and efficient carbon market through effective licensing and supervision.
Better retirement outcomes and member services
This will include:
- targeted enforcement action against cold-calling superannuation switching models; and
- surveillance of personal advice provided to retail clients about the establishment of self-managed superannuation funds.
Advanced digital and data resilience and safety
This will include:
- implementing a supervisory cyber and operational resilience program;
- monitoring the use of artificial intelligence by financial services and credit licensees; and
- monitoring the use of off-shore outsourcing arrangements used by investment managers and financial advisers.
The corporate plan also outlines ASIC’s other key activities for the 2024-28 period, including:
- continuing to conduct a targeted surveillance of financial services and credit licensees with low numbers of reportable situations and, where appropriate, taking enforcement action;
- taking action against companies and licensees who do not comply with obligations to lodge financial reports; and
- engaging with Treasury to support the development of legislation that will require payment service providers to be licensed and also supporting the implementation of the regulatory framework for ‘buy now pay later’ providers.
The HW Funds team will keep you updated on further developments and ASIC’s key activities, including its new strategic priority to include private markets and emerging financial products.
