ASIC sets a new course for enforcement action in 2025
The Australian Securities and Investments Commission (ASIC) has announced its revised enforcement priorities for calendar year 2025, with some notable inclusions and omissions.
The 12 stated priorities are a clear indication from the regulator in relation to where it will direct its enforcement resources, with the majority of enforcement action likely to be taken in these specific areas of focus.
ASIC has also indicated in its recent announcement that the number of new investigations initiated in 2024 has increased by 25 per cent compared to the last calendar year, with a 23 per cent annual increase in the commencement of new civil proceedings. This represents a significant shift in the number of parallel investigations being conducted by ASIC at any particular point in time and allows it to focus on more areas and sectors simultaneously.
The new priorities for the coming year that were not previously a stated focus of ASIC are:
- unscrupulous property investment schemes;
- strengthening investigation and prosecution of insider trading;
- business models designed to avoid consumer credit protections;
- debt management and collection misconduct; and
- auditor misconduct.
A further new enforcement priority relates to the failure of licensees to have adequate cyber-security protections, which is expected to build on the matters raised in the 2022 Federal Court decision of ASIC v RI Advice Group Pty Ltd [2021] FCA 1193.[1] This is a broader enforcement priority than the previously stated focus on technology and operational resilience for market operators and participants given the focus is now on all licensees.
Two significant priorities that do not feature in the current list are poor distribution of financial products and compliance with the reportable situation regime.
Having achieved two significant results in relation to design and distribution obligations in the Federal Court decisions of ASIC v Firstmac Limited [2024] FCA 737[2] and ASIC v American Express Australia Limited [2024] FCA 784, which were both handed down in July 2024, it appears the regulator is now moving its focus to other areas.
Other enforcement priorities that will no longer be front of mind for ASIC are compliance with financial hardship obligations and enforcement action targeting gatekeepers facilitating misconduct.
In the superannuation sector, ASIC is shifting its focus away from the systematic erosion of superannuation balances towards misconduct exploiting superannuation savings. ASIC has also restated its previous enforcement priority focused on member services failures in the superannuation sector.
The revised enforcement priority for insurers in 2025 is failures to deal fairly and in good faith with customers, which is a revised version of the previous focus on insurance claims handling.
Further enforcement priorities from 2024 that are set to continue into the new year include greenwashing and misleading conduct involving ESG claims and used car finance sold to vulnerable consumers by finance providers.
For further information, please contact Jacob Uljans and Hamish McNair.
