ASIC Annual Report: Current and future directions for compliance

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On Thursday, 26 October, the Annual Report of the Australian Securities & Investments Commission (ASIC) was tabled in the House of Representatives. As one of the chief compliance authorities for business in Australia, it is worth taking a look at ASIC’s report with a focus on ASIC’s current and future compliance activities. We look at four areas identified in that report which will be most relevant to business compliance: regulatory reform, enforcement activities, supporting innovation and ASIC technology and processes.

ASIC Innovation

Regulatory Reform

ASIC notes several areas of regulatory change that ASIC has implemented or been actively involved (see Annual Report, p3). Some of these we have commented on over the last six months including:

  1. Client money reforms (see An update on the OTC derivative client money reforms: be ready for 4 April 2018)
  2. Expansion of the fintech regulatory sandbox (October FinTech update: The new FinTech services and products to be trialled through the regulatory sandbox)
  3. An ongoing review of ASIC’s enforcement powers (Financial crime doesn’t pay – three ways in which wrongdoers may soon be hit in the pocket).

Enforcement Activities

ASIC tallies up its enforcement, investigation and review activities over the 2016-2017 year, including (see Annual Report, p48):

  • conducting approximately 1,440 high-intensity surveillances and 160 investigations
  • a total of $837.7 million in compensation and remediation paid, or ordered to be paid, for investors and consumers.
  • continued progress in legal action against three of Australia’s four largest banks. ASIC alleges that these banks traded in an unconscionable manner and attempted to create an artificial price for bank bills to affect the bank bill swap rate (BBSW),
  • prosecution of 409 directors of failed companies for 723 offences for failing to assist liquidators
  • reviewing more than 320 financial reports of listed entities and other public interest entities
  • reviewing about 9,000 reports of misconduct from the public.

Innovation

In the Innovation space, ASIC has continued its operation of the Innovation Hub to support financial technology (fintech) businesses and has managed the fintech regulatory sandbox. Other activities include:

  • publishing a report setting out the proposed future approach to regulatory technology (regtech) (see our From fintech to regtech: a new area for innovation focus).
  • the first regtech roundtable discussion was held in February 2017 on the application of regtech in Australia, and future opportunities (see Annual Report, p80).

ASIC technology and processes

ASIC has a ‘Regulatory Transformation Program’ in place, to improve how it manages IT systems, big data and analytics and fosters regtech (see Annual Report, p2). This program aims to:

  1. implement one IT platform for internal and external regulatory data, reducing red-tape in the collection of data
  2. explore options for receiving and accessing data, including through the use of regulatory nodes in a distributed ledger.
  3. introduce portals to make compliance and interaction between ASIC and stakeholders easier and faster
  4. implement a single technology strategy to, among other things, provide easier access to ASIC’s data.

To read the full report go to http://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-359mr-asic-s-2016-17-annual-report-tabled/

Interested to read other published content around ASIC? Check out ASIC news articles here.

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