ASIC priorities affecting the financial services sector in 2020

The Australian Securities & Investments Commission (“ASIC”) has been vocal and consistent in their delivery of information for participants in Australia’s financial services sector. As part of their continued response to the fallout from the Hayne Royal Commission, ASIC Deputy Chair, Ms Karen Chester, recently addressed the four lines of defence for consumers of financial services.

Those working within the financial services industry should expect both change in legislation and more regulatory oversight in the following areas:

Public policy
Consumer education and protection
Sector providers and firm’s responsibility
Regulatory protections

ASIC is well known to have moved toward a ‘why not litigate’ stance for dealing with non-compliance in the financial services sector. Trust in the sector has taken a battering from the outcomes of the Royal Commission and this hasn’t been helped by recent media surrounding enforcement action undertaken by Australia’s financial transactions regulator, AUSTRAC (the Australian Transaction Reports and Analysis Centre).

In Focus

The incoming Design and Distribution Obligations (“DDO”) for product issuers (effective from April 2021) substantially increase the obligations on product issuers to ensure their product is appropriate for the target market. During 2020, product issuers should assess their products against target markets and update their compliance documentation to reflect these considerations. These assessments need to extend into the distribution arrangements for products to ensure that the product issuer continues to meet its AFSL obligations.

Product intervention powers became operational for ASIC from April 2019. Since then, ASIC has exercised these powers to block short-term lending products that were considered to be predatory toward retail borrowers.

Next Steps

If you have been waiting to see what the fallout will be, now is the time to act. Take the time to focus on your compliance activities and ensure you are meeting your section 912A obligations. Mazars have considerable experience and expertise in advising on financial services corporate governance and risk management frameworks. For further clarification or assistance regarding your obligations, please contact your usual Mazars advisor or alternatively contact one of our financial services specialists on:

Brisbane – Matthew Green	Melbourne – Craig Silvester	Sydney – Paul Collins
+61 7 3218 3900	+61 3 9252 0800	+61 2 9922 1166

Published: 18/03/2020

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.

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