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In an address to the Australian Institute of Company Directors (AICD) Governance Summit, ASIC chair Joe Longo has listed the regulator’s top focuses for 2022.
Amid uncertainty in global markets, ultra-low interest rates and the rapid speed that digital technology evolves at, Mr Longo stated ASIC has been watching consumers conduct more of their business online.
The rise of financial scams is a primary concern for the regulator as well as online investment and cryptocurrency, but its other priorities have included the impacts of predatory lending practices or high-cost credit on vulnerable consumers.
ASIC has also begun work on cutting down regulatory complexity.
Early on in Mr Longo’s term, the regulator established a regulatory efficiency unit.
As he recounted, the unit’s mandate is to “remove unnecessary frictions” in its interactions with industry, to reduce regulatory impost and drive better compliance.
“While work of this nature was already underway within ASIC, the unit will coordinate this work, as well as complementing it with other initiatives,” he said.
“The team has so far met with more than 70 external stakeholders, and is working on identifying a range of initiatives that will improve the efficiency of our interactions with our regulated population.
“The issue of reducing complexity is also front-of-mind for government.”
The Australian Law Reform Commission also recently reviewed the Corporations Act with the aim of reducing its complexity. The inquiry included a recent industry consultation.
Mr Longo reflected: “The benefits of untangling Australia’s corporations and financial services legislation are very clear, as the ALRC observed: ‘We all bear the consequences of legislative complexity, including through increased costs for financial products and services, and in publicly funding courts and regulators to wade through the legislative thicket.’”
Meanwhile, ASIC has also homed in on the new design and distribution obligations (DDOs) for product providers, which commenced in October.
Mr Longo revealed that ASIC will transition to a targeted surveillance approach around DDOs in 2022, warning that it will be “moving to enforce the obligations where necessary”.
“Our early reviews of target market determinations highlighted some disappointing approaches,” Mr Longo said.
“But we have seen some positive improvements in response, including from the big end of town.
“We consider that industry is reaching a point where it has had sufficient time to bed down its implementation of the regime.”
Mr Longo also urged companies to improve their cyber-security position.
Boards are considered accountable, he added, and they should consider where they have an obligation to report breaches to the regulator and where it might be appropriate to make a disclosure to the market.
“We encourage active management of cyber risks, and we encourage entities to continually improve their cyber-resilience,” he said.
But ASIC will not prescribe technical standards or provide expert guidance on operational aspects of cyber security, Mr Longo said, with that being the “role of government and other agencies”.
The regulator has worked on its own digital capabilities. It recently introduced director identification numbers, which are meant to streamline administration for company directors and prevent fraud.
Other areas of focus for ASIC included whistleblowers, climate change disclosure for listed companies and greenwashing.
[Related: Ukraine war weighs on RBA’s rate deliberations]
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