ASIC boasts of ‘strong focus’ on enforcement

ASIC chair Joe Longo said the regulator had a strong focus on enforcement throughout the 2022-23 financial year, adding that the Australian Securities and Investments Commission (ASIC) had actively litigated and sought significant penalties to address misconduct.

“Our enforcement action resulted in 35 criminal convictions and almost $190 million in civil penalties and fines imposed by the courts. In addition, we commenced more than 130 new investigations in 2022–23,” Mr Longo said.

“ASIC remains focused on maximising our regulatory impact by addressing areas of greatest harm. Our priorities reflect the key trends and emerging issues in our regulatory environment, including the growth in sustainable finance, Australia’s ageing population, emerging and disruptive digital technologies and associated risks, and product design and distribution.

“We have made considerable progress against these priorities throughout the year, and this work continues.”

Looking specifically at the financial advice sector, ASIC said that its work during 2022–23 included reviewing the Financial Advisers Register to ensure it accurately reflects the status of financial advisers who did not pass the financial adviser exam.

Additionally, the regulator focused on financial adviser conduct and referrals of misconduct to the Financial Services and Credit Panel. It also completed its review of the Life Insurance Framework and provided the findings for consideration in the Quality of Advice Review, as well as updating guidance for financial advisers who provide self‑managed superannuation advice.

“During the financial year, ASIC granted 12 licences to new innovative businesses, which included neobanks and businesses offering services in payments, digital advice, and crypto assets,” ASIC said.

“Fintech businesses that received informal assistance from our Innovation Hub before submitting their licence applications were consistently approved faster than those that did not seek assistance.”

The corporate regulator also reported that it secured a total of $185.4 million in penalties from its civil court actions.

During the financial year, ASIC completed 52 civil actions, which covered fees for no service breaches, systemic compliance failures, continuous disclosure contraventions, false and misleading advertising, misleading sale of insurance, financial hardship misconduct, superannuation advice breaches, and failure to comply with the best interests duty.

The annual report also revealed the statistics surrounding the four cycles of the examination it “successfully administered” from 1 July 2022 to 30 June 2023.

“ASIC continues to support the professional standards reforms introduced in 2017 to encourage higher standards of behaviour and professionalism for financial advisers,” ASIC said.

“The examination is a key component of the education and training standards that all financial advisers must complete to provide personal advice on relevant financial products to retail clients.”

According to ASIC, 1,297 candidates sat the examination between 1 July 2022 and 30 June 2023. More than 20,500 candidates have sat the examination since it was first administered in June 2019, and of those, approximately 92 per cent have passed.