Australia

ASIC releases six-monthly enforcement report: 256 enforcement outcomes and plenty more in the pipeline

By Zein El Hassan (AU) and Jack Kelly (UK) on September 1, 2014 Posted in Australia, Investigations

ASIC, which is Australia’s corporate, markets and financial services regulator, has over the last six months achieved a bumper 256 enforcement outcomes designed to protect consumers and enhance the fairness and efficiency of the financial markets. These enforcement outcomes included criminal, civil and administrative actions in addition to negotiated outcomes such as enforceable undertakings.

While the total number of enforcement outcomes has dropped from 340 in the preceding six month period, the report identifies that ASIC is currently pursuing a further 138 pending matters.

ASIC’s current and future areas of focus include:

Taking action against credit providers for misleading consumer and loan fraud – particularly in light of ASIC becoming the national regulator of consumer credit in June 2010 under the National Consumer Credit Protection Act 2009 (Cth). ASIC considers that the industry has now had sufficient time to familiarise itself with its obligations under the legislation.
Working with overseas counterparts to combat cross-border fraud – ASIC has identified the impact of globalisation and changes in the structure of corporations. ASIC has now entered into 37 bilateral memoranda of understanding (MOU) with overseas agencies, and is one of the 103 signatories to the International Organization of Securities Commissions (IOSCO) multilateral MOU.
Treatment of confidential information by listed companies – ASIC has recently released Report 393 “Handling of confidential information: Briefings and unannounced corporate transactions” which reviewed the way in which listed entities and their advisors handle confidential, market-sensitive information. ASIC notes that it will continue to take action for insider trading and breaches of continuous disclosure obligations where systems and controls do not prevent the release of such confidential, market-sensitive information.
Manipulation of financial benchmarks – ASIC has been making inquiries into the Australian bank bill swap rate since mid-2012 and is closely monitoring international developments on benchmarks, including the work of the Benchmarks Task Force established by IOSCO.
Improving auditor and liquidator standards – ASIC views auditors and liquidators as important “gatekeepers” for the financial system and is focused on ensuring that they uphold their professional and statutory obligations. ASIC views these gatekeepers as playing an important role for the long-term stability in Australian financial markets.

The ongoing focus on advertising of financial products and the quality of financial advice – ASIC has previously indicated that they have a focus on advertising of financial products, and this focus will continue into the future as they take enforcement action on advertisements that are misleading or deceptive, or likely to be misleading or deceptive.