ASIC outlines its strategic priorities for the next four years

The Australian Securities and Investments Commission (ASIC) has released its business plan outlining its strategic priorities for 2022-26.

The plan details four external priorities and the actions that will be taken to achieve them, as well as four internal priorities to strengthen the operational capabilities of the ASIC.

External priorities

The external priorities of the ASIC target the most significant threats and harms in the Australian regulatory environment.

  1. Product design and distribution: Reduce the risk of damage to consumers of financial and credit products, caused by poor product design, distribution and marketing, by helping to comply with the new requirements.
  2. Sustainable finance: support market integrity through proactive oversight and application of governance, transparency and disclosure standards in relation to sustainable finance.
  3. Decision on the pension: Protect consumers, especially as they plan and make retirement decisions, with a focus on retirement products, managed investments and financial advice.
  4. Technological risks: focus on the impact of technology on financial markets and services, promote good operational resilience and cyber risk practices, and take action to address digitally enabled misconduct, including scams.

Strategic projects for the achievement of external priorities

Supporting ASIC’s external priorities are eight key strategic projects, focusing on scams, sustainable finance practices, crypto-assets, design and distribution obligations, breach reporting, IT and operational resilience, digital technology and data and subject to approval of legislation, liability regime.

Rip offs

ASIC’s actions to combat scams will include:

  • Develop advanced approaches to identify and stop scams.
  • Closer cooperation with other national and international regulators and law enforcement agencies.
  • Educating consumers to be more aware of scams and how to identify them.
  • Take enforcement measures to discourage serious investment scams.

Sustainable Finance Practices

The ASIC will intervene to prevent damage resulting from greenwashing and to support effective governance and dissemination of climate and sustainability. Key actions will include:

  • Supervision of sustainability reporting and governance practices of listed companies, managed funds, pension funds and green bonds.
  • Licensing and supervision of carbon and related markets.
  • Implementation of a new Memorandum of Understanding (MOU) with the Australian Energy Regulator to address misconduct in the gas and electricity markets.
  • Collaborate with national and international regulators on sustainable finance developments.
  • Take enforcement action against misconduct, including misleading marketing and greenwashing by entities.

Cryptocurrencies

While cryptocurrencies go beyond geographic jurisdictions and the mandate of any single Australian regulator, ASIC will step in to protect investors from harm caused by cryptocurrencies within its mandate. Key actions include:

  • Take law enforcement measures to protect consumers from harm associated with cryptocurrencies.
  • Supervision and evaluation of product disclosure statements of leading cryptocurrency offerings.
  • Implementing and monitoring a regulatory model for exchange-traded products with underlying cryptocurrency investments.
  • Raise awareness of the risks inherent in cryptocurrencies.

Design and distribution obligations

The design and distribution obligations entered into force on October 5, 2021. These obligations require financial product companies to design products that meet consumer needs and ensure that those products are targeted at the right consumers. The ASIC will conduct surveillance and take enforcement and other regulatory actions to address poor product design and distribution.

Report of violation

The new reportable situations regime entered into force on October 1, 2021. Reports submitted under the regime help the ASIC identify emerging trends of non-compliance and enable early detection of significant non-compliant behavior.

Cyber ​​and operational resilience

The ASIC will raise awareness and undertake proactive oversight actions to encourage active operational risk management and continual improvement of cyber and operational resilience practices to minimize the risk of disruption due to cyberattacks. It will take executive action against egregious conduct.

Digital technology and data

ASIC will strengthen its capabilities to use data and technology to identify harms more quickly and accurately, make better decisions and improve regulation.

Financial liability regime (FAR)

The FAR aims to improve the risk and governance cultures of entities in the banking, pension and insurance sectors. ASIC will continue to work with APRA to implement the scheme.

Internal priorities

The ASIC also has four key internal priorities aimed at strengthening its operational capabilities.

  1. Digital technology: Expanding the use of digital technology to support more efficient regulatory processes.
  2. Data and analysis: increase efficiency and effectiveness by improving access to information and adopting new analytical tools.
  3. People and resources: recruit and retain talent, improve skills and improve planning and budgeting processes.
  4. Modernization of business registers: Continue to support the successful transfer of ASICs to Australian Business Registry Services.

Key takeaway

ASIC’s Business Plan outlines its strategic priorities for 2022-26. Its external priorities focus on product design and distribution, sustainable finance, retirement decision making and technology risks and will be supported by eight key strategic projects covering a wide range of areas, from scams to design obligations. and distribution. The ASIC has also established internal priorities to strengthen its operational capabilities.

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