ASIC reveals medium-term plan for small business

According to ASIC’s Corporate Plan 2018-2022, it highlighted poor culture and professionalism in financial services and credit as one of its areas of focus for 2018-19.

As for the medium-term until 2022, one of the strategic priorities highlighted by ASIC was to implement new supervisory approaches, including investigating and enforcing cases of unfair contract terms involving small business.

Under its projects for 2018-19 aimed at driving positive behaviours to help improve consumer and investor outcomes, ASIC said its main goals for its ongoing project on small business was on “providing policy advice to Treasury on allowing crowd-sourced funding by proprietary companies” as well as “refreshing ASIC’s online resources for small business”.

For the medium-term until 2021-22, ASIC would be paying particular attention to consumers being treated unfairly through activities such as inappropriate sales practices, unfair terms in consumer and small business loan contracts, and unfair borrower financial hardship practices by lenders.

Under ASIC’s projects aimed at maintaining trust and integrity in the financial system, it said it would be reviewing compliance with the unfair contract terms legislation by lenders outside the big four banks – including in the context of reforms – and driving changes to align with the enhancements that have been made by the big four lenders as a result of its review.

Further, it would continually examine small business compliance, including illegal phoenix behaviour, non-compliance with financial reporting obligations and director misconduct.

“ASIC expects financial sector firms to adopt a culture of professionalism from the very top of the organisation right through to the frontline in order to win back community trust,” said ASIC chair James Shipton.

“Equally, it is important for ASIC to demonstrate professional values and to be held to account.”