ASIC’s enforcement report for January-June 2016

ASIC has published Report 485 ASIC enforcement outcomes: January to June 2016 (REP 485) detailing ASIC’s enforcement actions for the period 1 January to 30 June 2016 and its enforcement priorities for the next 6 months.

In the area of consumer credit ASIC highlighted the following:

  • Car finance provider BMW Australia Finance Ltd (BMW Finance) paid penalties totalling $391,000 and had a condition placed on its Australian credit licence following concerns raised by ASIC. The licence condition required BMW Finance to appoint a compliance consultant after ASIC found that it breached important consumer protection provisions relating to responsible lending and the repossession of motor vehicles.
  • Australia and New Zealand Banking Group (ANZ) paid penalties totalling $212,500 where ASIC had concerns that there may have been a breach of responsible lending laws by ANZ in making offers of overdraft facilities to its customers.

The focus of ASIC’s enforcement activity over the next six months—from 1 July to 31 December 2016—will be on the following types of misconduct.

Market integrity
Conduct risk and the integrity of financial market benchmarks remain a high enforcement priority. ASIC remains committed to ensuring that failure to meet disclosure obligations by entities and market abuse are addressed through enforcement action.

Corporate governance
ASIC will continue to ensure that gatekeepers—company directors and officers, auditors, insolvency practitioners and business advisers—adhere to the high standards required by law. Where necessary, ASIC will take action against those who fail to meet these standards.

ASIC will focus on serious breaches where these indicate:
(a) poor corporate culture;
(b) misuse of cross-border services and transactions;
(c) failure by corporations to respond appropriately to the threat of malicious cyber activity;
(d) misalignment between company disclosures, product design and investor understanding and expectations; and
(e) serious ‘phoenix’ behaviour and improper transactions in the face of insolvency.

Financial services
ASIC is focused on ensuring that firms and advisers comply with the Future of Financial Advice obligations.

A significant component of this work falls within ASIC’s Wealth Management Project. This project aims to lift the standards of major financial advice providers—in particular, the quality of their advice and the remediation of clients who have suffered loss as a result of their failure or action.

Other areas
In addition, ASIC will concentrate on:
(a) responsible lending practices in the credit industry; and
(b) ensuring that responsible entities of managed investment schemes comply with their disclosure and conduct obligations.

 
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