au iconAU



ASIC outlines crackdown action for second half

ASIC has laid out its enforcement focus for the rest of the year as it reveals over $600 million in compensation and remediation recovered by the regulator in the first half of 2017.

ASIC outlines crackdown action for second half
smsfadviser logo

In the enforcement report for the period 1 January 2017 to 30 June 2017, ASIC revealed that it completed 80 investigations, with 32 criminal charges laid, and five persons charged in criminal proceedings.

Small business misconduct from action against persons accounted for 95 per cent, while the remaining 5 per cent stemmed from efficient registration and licensing.

Credit misconduct formed more than half of financial services misconduct, with dishonest conduct and misleading statements forming 8 per cent of the total.

The corporate regulator said its priorities were built on the foundation of ASIC’s corporate plan and addressed the challenges of aligning conduct in a market-based system with investor and consumer trust and confidence; digital disruption and cyber resilience in our financial services and markets; and structural change in our financial system through market-based financing, which is led by growth in superannuation.

ASIC has also laid out the focus of its enforcement activity for the rest of the year, with market integrity, corporate governance, and financial services as the three broad scopes.

Specifically, ASIC said it would pay close attention to “technology-enabled offending and/or malicious cyber crime in the context of rapid technological developments” as part of market integrity.

On the corporate governance front, companies with poor corporate governance; undisclosed associations and substantial holdings in shares in public companies; insolvency practitioners and others who facilitate serious illegal ‘phoenix’ behaviour and improper transactions in the face of insolvency were some areas of particular focus.

Lastly, with regards to financial services, ASIC said it would target responsible lending practices in the consumer credit industry and financial advisers’ compliance with their obligation to act in the best interests of the client and the obligation to provide appropriate advice to clients.

ASIC Commissioner Cathie Armour said, “This report covers some of the important work done by ASIC over the last six months across a wide range of areas.”

“We will continue to detect misconduct and take enforcement action where necessary to ensure investors and consumers can have trust and confidence in our financial system.”

Subscribe to Public Accountant

Receive the latest news, opinion and features directly to your inbox