MIU - Issue 164 - December 2024
ASIC invites feedback on proposed updates to digital asset guidance
We welcome feedback on our consultation paper 381 Updates to INFO 225: Digital Assets: Financial Products and Services (CP 381) outlining proposals to update information sheet 225 Crypto Assets (INFO 225)
ASIC Commissioner Alan Kirkland said, ‘We want to promote the growth of responsible financial innovation while ensuring consumer protection. Stakeholders have been calling for greater clarity and in response, we are releasing our draft updated guidance.’
The consultation seeks feedback on:
- ASIC’s updated guidance in INFO 225, including the 13 practical examples
- the application of the existing Australia Financial Services (AFS) licence processes, ASIC guidance and standard conditions to digital asset businesses
- practical licensing issues for wrapped tokens and ‘stablecoins’, issues arising from the potential transition to the Government’s proposed digital asset platform and payment stablecoins regimes, and consideration of potential regulatory relief, and
- a potential class ‘no action’ position for digital asset businesses that are in the process of applying for or varying an AFS licence, Australian Markets Licence or Clearing and Settlement Facility licence.
Instructions on how to submit your comments or feedback are on page four of the consultation paper. Please provide your feedback by 5pm on 28 February 2025.
- Read the media release.
Important changes to OTC Derivative Transaction Reporting
Following four rounds of public consultation, changes to Australia’s OTC derivative transaction reporting came into effect on 21 October 2024 under the ASIC Derivative Transaction Rules (Reporting) 2024 (the 2024 Rules).
Our reporting rules are now largely aligned with international standards and will improve the quality, efficiency and useability of reported data for a range of regulatory purposes.
We are performing data checks and analysis to identify and measure areas of compliance and potential non-compliance with the 2024 Rules. For example, our checks include reviewing outstanding derivatives data pre and post migration. We are also performing logic tests designed at a macro level, such as reviewing Unique Product Identifier choices for consistency with the reported asset class and contract type data. Since coming into effect, we have seen significant improvement in the conformity and consistency of reported OTC derivatives data under the new changes.
For further information on the 2024 Rules, please visit our derivative transaction reporting webpage.
New IOSCO reports outline key developments on pre-hedging and retail investor online safety
The International Organization of Securities Commissions (IOSCO) has published a number of consultation reports and is seeking feedback on their proposed guidance for global market regulators on key challenges and opportunities.
ASIC has played a significant role in developing the consultation reports in its role as chair of the Committee on Regulation of Market Intermediaries (Committee 3) and is committed to ensuring the policy approaches and collective thinking of markets regulators globally are shared with industry.
The reports are available here:
- Consultation report on Pre-Hedging (PDF) - Assessing the potential conduct and market integrity issues associated with pre-hedging. This report comes after ASIC’s guidance for market intermediaries on pre-hedging issued on 1 February 2024. Following conclusion of IOSCO’s work and publication of a final report, we will consider how to apply the recommendations in Australia and may supplement ASIC’s guidance at that time.
- Consultation reports to enhance retail investor online safety - IOSCO has released three consultation reports as part of an initiative to safeguard retail investors from emerging global risks and address online fraud, promote safe investing and enhance global cooperation. The consultation reports relate to Finfluencers (PDF), Copy-Trading (PDF) and Digital Engagement Practices (PDF). Read about IOSCO’s key initiatives to enhance retail investor online safety (PDF).
These reports set out good practices for regulators, market participants, and finfluencers to foster a safer, more transparent environment for retail investors. IOSCO’s work in this space is aligned with ASIC’s focus on driving better outcomes for consumers of financial products and services.
To submit your comments and/or questions to IOSCO for consultation, please follow the instructions within the foreword of each respective report.
Recent ASIC enforcement actions
Our 2024 and 2025 enforcement priorities send a clear compliance message to the entities we regulate. Over November and December, our enforcement actions included:
ASIC sues crypto company Binance Australia Derivatives for consumer protection failures
More than 500 retail clients of Oztures Trading Pty Ltd, trading as Binance Australia Derivatives (Binance), were denied important consumer protections after being misclassified as wholesale clients, ASIC alleges in documents filed in the Federal Court.
ASIC alleges from 7 July 2022 to 21 April 2023, Binance offered crypto derivative products to 505 Australian retail investors who were misclassified as wholesale clients, representing 83% of its Australian client base.
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Read the media release.
ASIC sues Rex and four directors for serious governance failures
ASIC has commenced legal proceedings in the Supreme Court of NSW seeking leave to allege Regional Express Holdings Limited (administrators appointed) (Rex) engaged in misleading and deceptive conduct and contraventions of continuous disclosure obligations.
ASIC has also alleged former executive chair Lim Kim Hai (Mr Lim) was involved in Rex’s continuous disclosure breach and that Mr Lim, along with The Hon John Sharp AM, Lincoln Pan and Siddharth Khotkar, contravened their directors’ duties.
- Read the media release.
ASIC suspends Edisons Global’s AFS licence following repeated compliance failures
ASIC suspended the Australian financial services (AFS) licence of Edisons Global Pty Ltd for six months, from 31 October 2024 to 30 May 2025, after it failed to comply with certain obligations required of AFS licensees. Edisons failed to lodge its industry funding metrics or its annual financial statement, auditor report and audit opinion by the due date for the financial years, ending 30 June 2022 and 30 June 2023.
- Read the media release.