Changes to regulatory work and priorities in response to COVID-19

ASIC has previously stated it would temporarily change its regulatory work and priorities to allow it and regulated entities to focus on the impact of COVID-19. This will include the deferral of some activities and redeployment of staff to address issues of immediate concern, including maintaining the integrity of markets and protecting vulnerable consumers.

ASIC can now provide details on many of the activities that will be affected (see below). In June 2020, ASIC reviewed its position in relation to its temporary changes in regulatory work and priorities. These updates are also reflected below. We have separately provided information on ASIC work implementing the recommendations of the Financial Services Royal Commission in light of changes to the Parliamentary timetable.

For more information, see:

Cross-sector

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

1

Internal dispute resolution review

ASIC’s review of internal dispute resolution (IDR) standards to align with new statutory requirements for IDR, reflect the standards for effective complaints handling in AS/NZS 10002:2014 and refine our requirements in some key areas based on our experience in administering the policy.

Update (30 July 2020): ASIC has published a new regulatory guide, Regulatory Guide 271 Internal dispute resolution, outlining updated IDR standards and requirements. The guide was published in July 2020 to allow industry to make the necessary changes ahead of commencement on 5 October 2021.

With increased levels of financial hardship and consumer vulnerability as a result of the COVID-19 pandemic, ASIC considers it essential that IDR performance is significantly improved.

20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges

19-249MR ASIC update on Royal Commission implementation

 

2

Internal dispute resolution data collection and reporting

Update (11 June 2020): ASIC will commence its second phase of targeted consultation on IDR data collection and reporting in Q3 2020. This consultation will build on the feedback that industry and consumer stakeholders provided in response to Consultation Paper 311 Internal dispute resolution: Update to RG 165.

 

3

Remediation policy review

Review of ASIC’s remediation guidance to put consumers at the heart of the remediation process and provide guidance on how licensees can achieve fair, transparent and timely outcomes.

Update (11 June 2020): In Q3 2020, ASIC will consult on its proposals to extend the application of its remediation policy in Regulatory Guide 256 Client review and remediation conducted by advice licensees (RG 256) beyond financial advice.

In 2019, ASIC started an internal review of its remediation policy (in RG 256). The focus has been on extending the application of the policy beyond financial advice including greater transparency on the progress and outcomes of remediation, and providing best practice guidance for designing and conducting consumer-centred remediation.

 

4

Close and Continuous Monitoring (CCM) program

ASIC’s enhanced onsite supervision program to review specific practices within the targeted regulated entities to identify deficiencies at an early stage and promptly elevate them to the key decision makers of the relevant entities.

ASIC is deferring this onsite work until further notice, including deferral of publication of ASIC’s observation of firms’ practices from the CCM program. ASIC will continue to work closely with other Council of Financial Regulators agencies to monitor our largest financial institutions in other forms, particularly where there is a risk of consumer detriment or to market resilience. ASIC will progress its preparation for future thematic onsite reviews.

20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges

 

5

Report on executive remuneration

ASIC review of executive remuneration structures, grants and vesting of variable remuneration, and whether these are driving the right behaviours and accountabilities of executives in Australia’s listed companies.

Update (12 June 2020): ASIC has published an information sheet to help boards with the governance of executive variable pay decisions during the COVID-19 pandemic.

ASIC will provide feedback to the individual entities the subject of this review and continue to monitor executive remuneration developments. Otherwise it is deferring this work until further notice.

20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges

6

Product intervention power

The product intervention power enables ASIC to intervene in relation to a product (or class of products) when we are satisfied that the product or (class of products) has resulted, will result or is likely to result in significant consumer detriment.

Update (17 June 2020): ASIC has published a regulatory guide on how it will use the product intervention power.
 

7

Product design and distribution obligations

The product design and distribution obligations will bring accountability for issuers and distributors to design, market and distribute financial and credit products that meet consumer needs. Issuers and distributors must comply with these obligations from 5 October 2021.

Update (11 June 2020): ASIC plans to publish its regulatory guidance on product design and distribution obligations in Q3 2020, responding to industry requests for guidance to be finalised as soon as possible.
 

20-109MR ASIC defers commencement of mortgage broker reforms and design and distribution obligations

19-369MR ASIC consults on guidance for the new product design and distribution obligations

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Financial advice

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

8

Temporary relief to facilitate advice to individuals financially affected by COVID-19 about early access to superannuation

Relief to ensure affordable and appropriate advice about early access to superannuation.

Update (23 September 2020): The relief measures in ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 will end on 15 April 2021. This is 12 months after the temporary relief commenced. We will continue to monitor the appropriateness of the relief measures, having regard to the ongoing impact of COVID-19. See 20-220MR for further details about the end date.

ASIC is providing temporary relief to allow advice providers not to give a Statement of Advice to clients when giving advice about early access to superannuation and to permit registered tax agents to give advice about early access to superannuation without needing to hold an AFS licence.

To ensure that advisers are acting in the interests of their clients, ASIC will monitor the advice provided under this relief.

20-135MR ASIC amends financial advice and capital raisings COVID-19 instruments

20-085MR ASIC grants relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic

9

Temporary relief extending the period for giving time-critical Statements of Advice

Relief to ensure advisers can give appropriate and affordable advice at this time.

Update (23 September 2020): The relief measures in ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 will end on 15 April 2021. This is 12 months after the temporary relief commenced. We will continue to monitor the appropriateness of the relief measures, having regard to the ongoing impact of COVID-19. See 20-220MR for further details about the end date.

ASIC is providing temporary relief to extend the period of time for giving a time-critical Statement of Advice under section 946C(3)(a) of the Corporations Act to 30 business days after the advice is given.

To ensure that advisers are acting in the interests of their clients, ASIC will monitor the advice provided under this relief.

20-135MR ASIC amends financial advice and capital raisings COVID-19 instruments

20-085MR ASIC grants relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic

10

Temporary relief to allow a Record of Advice to be given instead of a Statement of Advice in certain circumstances

Relief to ensure advisers can give appropriate and affordable advice at this time.

Update (23 September 2020): The relief measures in ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 will end on 15 April 2021. This is 12 months after the temporary relief commenced. We will continue to monitor the appropriateness of the relief measures, having regard to the ongoing impact of COVID-19. See 20-220MR for further details about the end date.

ASIC is providing temporary relief to enable advisers to provide a Record of Advice instead of a Statement of Advice to the existing clients in a broader range of circumstances.

To ensure that advisers are acting in the interests of their clients, ASIC will monitor the advice provided under this relief.

20-135MR ASIC amends financial advice and capital raisings COVID-19 instruments

20-085MR ASIC grants relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic

11

Review of life insurance advice reforms

The purpose of this project is to review whether legislative reforms to remuneration for life insurance advice (LIF reforms), which commenced in January 2018, have better aligned the interests of financial advisers and consumers (LIF review).

Update (22 July 2020): ASIC has delayed collecting the first round of life insurance advice files from advice licensees until the second half of 2020. ASIC also gave life insurers additional time to respond to the previous six-monthly data collection request and has delayed its collection of first-half 2020 data until early 2021.

For further information

ASIC's COVID-19 information for financial advisers and advice licensees

20-047MR ASIC update on enforcement and regulatory work: September 2019 to February 2020

19-249MR ASIC update on Royal Commission implementation

12

Review of changes to grandfathered commissions

The purpose of this project is to comply with the direction of the Treasurer (under section 14 of the ASIC Act 2001) that ASIC investigate the transition away from grandfathered conflicted remuneration in the financial advice industry.

ASIC is deferring work on grandfathered conflicted remuneration until further notice. ASIC will not ask product issuers for data at this time.

In the meantime, as ASIC has communicated to product issuers, ASIC expects product issuers to turn-off their grandfathered commission arrangements as soon as possible and by no later than 1 January 2021. All rebates and/or reductions in fees should be passed on to consumers as quickly as possible.

For further information

ASIC's COVID-19 information for financial advisers and advice licensees

19-218MR ASIC to review industry transition towards ending grandfathered remuneration for financial advice

ASIC Corporate Plan 2019-2023

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Managed funds

Update (11 June 2020): ASIC has extended the timeframe for input to the survey of industry participants until the end of July 2020. The delivery of an interim report on the findings has been delayed until the end of August 2020.

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

13

RG 97: Commencement of changes to fees and costs disclosure requirements for managed funds and superannuation

Update (28 September 2020):
ASIC has made a minor amendment to provide for additional text in the administration fees and costs line item in the ‘Example of annual fees and costs’ for superannuation products.

For further information see RG 97 webpage: “Transition period and 2020 amendments”.

Update (24 July 2020): ASIC has amended the transitional arrangements for PDSs to allow entities to come into the new disclosure regime from 30 September 2020.

ASIC Corporate Plan 2019-2023

20-167MR ASIC releases minor updates to RG 97

14

RG 97: Platform fees consultation paper

This work aims to establish a standardised approach to fees and costs disclosure for platforms.

ASIC will continue to develop its proposals on fees and costs disclosure for platforms. However, we are deferring the public consultation paper until further notice.

19-328MR ASIC releases updated RG 97 on fees and cost disclosure

15

Managed discretionary accounts (MDA) policy review

This review is considering financial capital requirements (NTA) for managed discretionary accounts providers.

ASIC will continue to develop its proposals on financial requirements for MDA operators. However, we are deferring the public consultation paper until further notice.

20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges

16

Timeshare stage 2

This stage of the review will focus on cooling-off arrangements and the secondary sales market of timesharing schemes.

ASIC is deferring its public consultation paper for up to one year. ASIC will continue to develop its proposals on selling practices in timeshare (cooling off versus deferred sale) and on secondary sales.

ASIC will proceed with release of an updated regulatory guide and instrument to introduce the remainder of our proposed amendments to the policy settings for timeshare schemes.

19-339MR ASIC report offers insights into consumer harm from timeshare schemes

Timesharing update

17

Recurrent managed funds data pilot

ASIC assessment of recurrent data collection as a means of improving ASIC’s understanding of the managed funds sector, its characteristics, trends and risks.

ASIC will continue its analysis of the pilot data but is deferring its industry engagement activities in relation to the recurrent managed funds data pilot until further notice. ASIC is also considering how it can best access data about the managed funds industry at this time to support its regulatory work in relation to managed funds.

Letter of invitation to nominate for ASIC’s recurrent managed funds data collection Pilot Group dated 6 September 2018

18

Competition in the investment management industry

ASIC has engaged Deloitte to review competition in the funds management industry.

 

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Superannuation

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

19

Intrafund advice: Temporary no-action position on ‘intra-fund advice’ about COVID-19 early release of superannuation

Relief to ensure affordable and appropriate advice about early access to superannuation.

Update (23 September 2020): ASIC extended the no-action position until 31 December 2020 to align with the Government’s extension of the COVID-19 early release of superannuation scheme.

ASIC will conduct limited surveillance to monitor the advice provided under this relief.

20-220MR ASIC extends COVID-19 relief for certain capital raisings and financial advice

20-085MR ASIC grants relief to industry to provide affordable and timely financial advice during the COVID-19 pandemic

 

20

Trustee Communications

ASIC is monitoring trustee communications to members about the impact of the COVID-19 pandemic and resulting legislative measures

Update (5 November 2020):
We expect to publish communications about the findings of our surveillance later this year.

ASIC Interim Corporate Plan 2020–21

ASIC Corporate Plan 2020-24

21

Portfolio Holdings Disclosure

Portfolio Holdings Disclosure obligations in s1017BB of Corporations Act require most registered scheme entity licensees to publish information about their fund’s portfolio holdings on the fund’s website.

[CO 14/443] Deferral of choice product dashboard and portfolio holdings disclosure regimes

ASIC will defer the first reporting date for portfolio holdings disclosures.

Details will be announced on ASIC’s website.

For further information

COVID-19 – information for superannuation trustees

19-295MR ASIC extends relief for portfolio holdings disclosure

22

Annual member meetings for superannuation funds

Section 29P–29PE of the Superannuation Industry (Supervision) Act 1993 requires RSE licensees to hold annual members’ meetings.

ASIC does not intend to defer this requirement or provide relief at this time. We will closely monitor conditions and revisit this issue if appropriate.

For further information

COVID-19 – information for superannuation trustees

N/A

23

Insurance in super

ASIC’s review is looking at industry’s progress on improving insurance outcomes for consumers.

Update (24 November 2020):
ASIC intends to issue a media release by November 2020 identifying opportunities for trustees to improve occupational default practices and a report in December 2020 on measuring value for money for members in insurance in super.

Update (7 August 2020): ASIC confirmed steps taken by several superannuation trustees that were classifying new members as ‘smokers’ by default and charging them higher life insurance premiums. Following ASIC engagement trustees have changed their practices and some trustees have remediated members for the extra premiums paid.

Update (11 June 2020): ASIC has continued with this work and anticipates to be in a position to publish a report by December 2020.

20‑180MR Superannuation trustees compensate members wrongly classified as ‘smokers’

19-352MR Superannuation Industry urged to focus on improving insurance outcomes for members

18-261MR ASIC reviews insurance in superannuation

24

Trustee oversight of advice fee deductions

This project addresses the erosion of superannuation balances resulting from inappropriate financial advice fees paid from member superannuation accounts.

ASIC, in agreement with APRA, is deferring public communication of the industry-level findings for six months.

For further information

COVID-19 – information for superannuation trustees

ASIC and APRA publish joint letter on superannuation fees (2 April 2019)

25

RG 97: Surveillance of compliance with changes to fees and costs disclosure for superannuation

This review supports APRA’s heatmap work.

ASIC is continuing to monitor and may take action where it identifies non-compliance with the current regime. However, ASIC is deferring the industry compliance review to align with the implementation of the revised requirements.

 

19-328MR ASIC releases updated RG 97 on fees and cost disclosure

26

RG 97: Commencement of changes to fees and costs disclosure requirements for managed funds and superannuation

See above under ‘Managed funds’.

 

27

RG 97: Platform fees consultation paper

See above under ‘Managed funds’.

 

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Credit, retail banking and payments

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

28

Review of lender responses to consumers experiencing financial difficulty

To examine how lenders identify and respond to customers experiencing financial difficulty.

ASIC commenced this project during 2019 by commissioning consumer research that examines the experiences of consumers engaging with credit providers about their financial difficulties.

ASIC is deferring the next stage of this work until 30 September 2020.

Instead, ASIC will actively engage with stakeholders on financial difficulty, in particular around hardship requests resulting from the impact of COVID-19. The learning from our work to date will inform our stakeholder engagement.

N/A

29

Buy now pay later products – follow up work

Follow up report on industry performance and regulation of buy now pay later services.

Update (11 June 2020):
ASIC expects to release its report in Q3 2020.

ASIC will engage with the sector on its responses to the COVID-19 pandemic.

ASIC will also engage with consumer representatives and closely monitor the use of small amount and alternative credit products, especially by vulnerable consumers.

This work will continue but ASIC is deferring the finalisation and release of the follow-up report until further notice. ASIC will be engaging with the sector on their responses to COVID-19.

ASIC will also be engaging with consumer representatives and closely monitoring the use of small amount and alternative credit products, especially by vulnerable consumers.

20-047MR ASIC update on enforcement and regulatory work: September 2019 to February 2020

19-249MR ASIC update on Royal Commission implementation

 

30

School banking review

ASIC’s review of school banking programs to understand how these programs are implemented, how they are marketed to school communities and how students engage with the programs and the accounts established through these programs.

ASIC is providing school banking providers additional time until 31 July 2020 to respond to ASIC’s review findings. ASIC will continue work on drafting the school banking review report.

19-266MR ASIC seeks public input to review of school banking

18-313MR ASIC announces review of school banking

31

Review of the ePayments Code

ASIC’s review of the ePayments Code to assess its fitness for purpose, noting significant developments in financial technological innovation and the need to ensure the Code is simple to apply and easy to understand.

Update (11 June 2020): ASIC will consult on the Code in Q4 of 2020.

Stakeholders are welcome to contact ASIC with any questions or concerns at ePaymentsCode@asic.gov.au.

This work will continue, but ASIC is deferring the release of its second consultation paper on the Code until the second half of 2020.

19-049MR ASIC consults on coverage of ePayments Code review

32

Debt collection industry review

Comparing oversight and auditing practices by credit providers of contingent collectors and debt purchasers to determine best practice models and guidelines.

ASIC is deferring the collection of data for this review until 30 September 2020. ASIC will continue to consult with consumer representatives and monitor developments in the debt collection industry.

N/A

33

Guarantee and co-debtor loans industry review

Scoping review of residential mortgage guarantees and co-debtor loans.

ASIC will continue to monitor developments and analyse the information it has already received. ASIC is deferring the collection of further data for the purposes of this work.

N/A

34

Fees in deposit and savings account industry review

Review of industry practice in relation to how exception fees are charged.

ASIC will continue to monitor developments and analyse the information it has already received. ASIC is deferring the collection of further data for the purposes of this work.

N/A

35

Recurrent mortgage data collection pilot

Collection of granular loan-level information from organisations involved in the pilot. This data will help ASIC identify trends and systemic practices in Australia’s home lending market which have the potential to cause significant consumer detriment.

ASIC will continue its analysis of the pilot data but is deferring its industry engagement activities until further notice.

Mortgage data pilot info page

 

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Insurance

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

36

Natural disaster working group

ASIC is monitoring insurers’ responses to recent natural disasters, including recent severe bushfires, storms and hailstorms affecting parts of Australia.

ASIC will continue to monitor claims handling and outcomes, utilising existing data sources and reports of misconduct, and will take further action if necessary. Detailed data requests will be deferred until further notice. Insurers should be prepared to respond to future data collection notices.

20-006MR ASIC encourages fair and effective insurance claims handling for people affected by the bushfires – warns against unscrupulous “service providers”

19-323MR ASIC fee relief for bush-fire affected customers

37

Consumer credit insurance (CCI) lender review (follow up to REP 622)

ASIC is requiring lenders to undertake large-scale remediation to address consumer harm involving more than 300,000 affected consumers who are to be paid over $100 million in refunds of premiums and interest.

Apart from overseeing remediation, ASIC is deferring other follow up work until further notice. ASIC plans to issue a data request but will not seek to collect the data until further notice.

ASIC Corporate Plan 2019-23

38

Total and permanent disability insurance industry responses (follow up to REP 633)

REP 633 asked insurers and superannuation trustees to undertake a range of measures by 31 March 2020 to address the concerns raised by our review.

Update (11 June 2020): ASIC has since contacted life insurers seeking information about the steps they have taken in response to the concerns ASIC raised in Report 633 Holes in the safety net: A review of TPD insurance claims.

ASIC will contact insurers by the end of April 2020 to seek information about the steps taken so far to meet the expectations outlined in our report.

19-281MR ASIC calls on insurers and trustees to take action to improve consumer outcomes from total and permanent disability insurance

39

Travel insurance review

Review of travel insurance distribution channels and assessing outcomes for consumers, including product value.

ASIC is deferring this work until further notice; however, we will consider travel insurance as part of our future review of unfair contract terms under the Royal Commission program of work.

ASIC Corporate Plan 2019-23

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Market infrastructure and supervision

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

40

Onsite reviews of market intermediaries under enhanced supervision program and FICC program

Onsite reviews of conflicts of interest in FICC business, fixed income desks. Ongoing onsite review program of high-touch market intermediaries.

ASIC is ensuring intermediaries manage operational risk, including ensuring that back-office risk management capabilities are maintained, that automated order processing does not cause market disruption, and that client money is protected.

ASIC has published guidance on business continuity and supervision arrangements to help intermediaries comply with their regulatory obligations in the current environment. However, for the time being, we are deferring onsite supervision programs for market intermediaries and instead undertaking desk-based reviews, focusing on conduct and resilience in a COVID-19 environment.

For further information

ASIC’s COVID-19 market updates

ASIC's priorities for supervision of market intermediaries in 2019–20

ASIC Corporate Plan 2019-23

 

41

Onsite reviews of exchanges and wholesale trading platforms

Onsite reviews of conflicts of interest of exchanges and wholesale trading platforms under enhanced supervision program and FICC program

 

ASIC is continuing to monitor and retain ongoing dialogue to understand the risks of the current environment, particularly where there is a risk of consumer detriment or to market resilience. However, at present, we have deferred onsite reviews.

For further information

ASIC’s COVID-19 market updates

ASIC Corporate Plan 2019-23

42

Allocation practices in debt capital market (DCM) transactions

ASIC undertook a thematic surveillance of allocation practices in DCM transactions and made observations about better and poorer practices.

ASIC has shared the observations with relevant industry associations and their members. ASIC will undertake periodic reviews of transactions to test compliance with the law and best practice. ASIC is deferring publication of a report on the better and poorer practices observed.

ASIC's priorities for supervision of market intermediaries in 2019–20

43

Consultation Paper 314 on new market integrity rules for technology and operational risk for market operators and participants

New market integrity rules for securities and futures market operators and participants that promote technological and operational resilience of their critical systems.

ASIC will continue to assess feedback from other regulators, and responses to COVID-19 by market operators and participants to inform the settlement of ASIC’s final policy position.

ASIC is ensuring market operators and intermediaries manage their technology and operational risk in the current environment and identifying areas of weakness, including arrangements for outsourced and off-shored services.

However, we are deferring the publication of our final report setting out ASIC’s position on the market integrity rules. ASIC expects that the final report will set out the expected timetable for implementation of the rules.

19-159MR ASIC consults on proposed market integrity rules for technological and operational resilience

44

Miscellaneous market integrity rule amendments – securities and futures markets

Securities–including on-market takeovers and buy-backs, accredited derivative advisers and legal entity identifiers.

Futures–including extension of securities rules to futures market participants on automated order processing and unique client identifiers.

Update (11 June 2020): ASIC is exploring options to reduce the 2020 accreditation burden for market intermediaries and their derivative advisers.

ASIC will review automated order processing controls for futures market participants where there are risks to the resiliency of the market.

ASIC will delay the publication of the formal consultation papers until the industry has the capacity to consider and respond to the proposals.

ASIC is exploring options to reduce the 2020 accreditation burden for market intermediaries and their derivative advisers.

ASIC will review automated order processing controls for futures market participants where there are risks to the resilience of the market.

ASIC will delay the publication of the consultation papers until the industry has the capacity to consider and respond to the proposals.

ASIC Corporate Plan 2019-23

 

45

Listed market structure: Dark liquidity report, market making, market data access and fees

A report updating the industry on our assessment and key metrics of dark liquidity (trading of equities that are not executed on exchange).

ASIC will continue to assess current market conditions and ensure market resilience. ASIC is deferring the release of our report and our internal market structure analyses on market making and market data access and fees.

ASIC Corporate Plan 2019-23

20-062MR ASIC takes steps to ensure equity market resilience

 

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Insolvency practitioners

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

46

Registered liquidator registration and renewal

 

ASIC is monitoring the impact of COVID-19 on the number and type of insolvency appointments and the capacity in the existing registered liquidator population to deal with resulting corporate failures.

N/A

47

Illegal phoenix activity

Supporting Government initiatives to combat illegal phoenix activity through our work with the Phoenix Taskforce and conducting surveillance of potential illegal phoenix activity and considering cases for referral or banning.

ASIC continues to work with Phoenix Taskforce members to target illegal phoenix activity. ASIC also continues to fund registered liquidators through the Assetless Administration Fund to investigate and report on serious misconduct including illegal phoenix activity.

ASIC action on illegal phoenix activity

48

Reporting on proactive and reactive surveillance of registered liquidators

ASIC's regular publication of reports on proactive and reactive surveillance of registered liquidators.

While ASIC is continuing surveillance of registered liquidators, it is deferring the publication of its report on observations about historical deeds of company arrangement until further notice.

 

ASIC Corporate Plan 2019-23

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Corporations

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

49

No-action position on annual general meetings due by 31 May

COVID-19 may temporarily impact companies’ ability to hold an annual general meeting (AGM).

ASIC does not have the power to grant extensions of time to hold an AGM on a ‘class basis’, i.e. to all entities with a financial year ended 31 December 2019. ASIC has therefore provided a ‘no-action’ position on upcoming AGMs that need to be deferred or that are held online.

20-068MR Guidelines for meeting upcoming AGM and financial reporting requirements

50

Temporary relief to allow ‘low doc’ placements, rights issues and share purchase plans

Temporary relief to allow ‘low doc’ placements, rights issues and share purchase plans where a listed company has been suspended for a total of up to 10 days in the previous 12-month period.

ASIC is helping listed companies raise capital quickly by giving temporary relief to enable certain ‘low doc’ offers (including rights offers, placements and share purchase plans) to be made to investors, even if they do not meet all the normal requirements.

ASIC has also issued a ‘Market Integrity Update’ about fairness in equity raisings emphasising our expectation that directors act in the interests of the company and balance the need for quick and certain capital possible dilution of existing shareholders. ASIC is actively monitoring capital raisings.

20-075MR Facilitating capital raising during COVID-19 period

51

Work on climate risk disclosure by Australia’s listed companies

Surveillance of climate risk disclosure practices by Australia’s listed companies.

ASIC is conducting desk-based surveillance work to assess the level of decision-useful climate related disclosure by listed companies. ASIC is also identifying key challenges faced by companies in this area. Discussions with companies have been delayed as a result of COVID-19.

19-208MR ASIC updates guidance on climate change related disclosure

19-341MR Financial reporting focuses for 31 December 2019

18-273MR ASIC reports on climate risk disclosure by Australia’s listed companies

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Financial reporting and audit

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

52

Financial reporting for unlisted entities and listed entities

Requirement to lodge financial reports with ASIC under Chapters 2M and 7 of the Corporations Act.

Unlisted entities

ASIC is extending the deadline for unlisted entities to lodge financial reports by one month for balance dates from 31 December 2019 to 31 March 2020.

Listed entities

ASIC is closely monitoring market conditions and COVID-19 developments that may affect financial reporting, talking to market participants and auditors, and considering possible impacts and responses.

20-084MR ASIC to provide additional time for unlisted entity financial reports

20-068MR Guidelines for meeting upcoming AGM and financial reporting requirements

53

Audit inspection program

Regular audit firm inspections to promote the improvement and maintenance of audit quality.

ASIC is continuing with our inspections of audit files. While reviews are conducted remotely rather than at the audit firms, we continue to interact with audit firm representatives through teleconferences and email. We are reducing the number of audit files to be reviewed at each of three of the largest audit firms before 30 June 2020 by one.

Some of our work on the review of conflicts, culture, talent, governance and accountability at each of the largest six audit firms will be reduced. In particular, part of the work on culture and talent will be deferred to the 2021 calendar year.

19-350MR Audit inspection findings: 12 months to 30 June 2019

54

Audit quality – Post-audit review and root cause analysis

Considering robustness of post-audit review and root cause analysis processes undertaken by audit firms. Review of oversight of financial reports by board audit committees.

ASIC is continuing to review material already received on this project but will be deferring the next phase of this work, which will require further engagement with the firms and boards involved until further notice.

ASIC Corporate Plan 2019-23

55

Consultation on routine reporting of inspection findings to audit committees

Consultation on possible changes to Regulatory Guide 260 to routinely report our audit file review findings to audit committees rather than on an exception basis.

ASIC is deferring this work until further notice.

N/A

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Business-as-usual

#ProjectASIC updateLinks to earlier public statements by ASIC about this work

56

Reporting of remediation programs

Unless ASIC has indicated to a licensee that it should adopt a different approach for a particular remediation program, it is acceptable for licensees to provide us with updates consistent with their internal firm reporting in lieu of the current form and scheduling of reporting arrangements. ASIC expects that once the situation normalises the, until now, existing reporting arrangements would resume.

Note: This is separate to the work ASIC is doing with financial institutions to further accelerate payments for outstanding remediation to customers, as outlined in 20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges.

20-070MR ASIC recalibrates its regulatory priorities to focus on COVID-19 challenges

57

Licensing and professional registrations

ASIC will continue to receive and assess applications for Australian Financial Services and credit licences and audit-related professional registrations.

ASIC is now seeking additional information on how applicants will manage their obligations due to the changed operating environment in light of COVID-19.

 

58

Reports of misconduct

ASIC will continue to receive and act on reports of misconduct, including those related to COVID-19. ASIC will pay particular attention to reports of scams, misleading conduct including in advertising and unlicensed behaviour.

 

59

Whistleblower reports

ASIC will continue to receive and act on reports of misconduct or breaches of the law from whistleblowers, including those related to COVID-19.

ASIC will continue to provide information and guidance to potential whistleblowers about their rights and protections, and to companies and company officers about their obligations under the regime.

For further information

Information Sheet 238 Whistleblower rights and protections

Information Sheet 239 How ASIC handles whistleblower reports

 

60

Notices and data requests

ASIC understands its regulated community may experience disruption and be under significant stress as a result of the novel COVID-19 outbreak.

If you have been issued with a notice or received a request for data or information, and you need more time to respond, contact ASIC and seek an extension. Details of the appropriate ASIC contact person are available on each notice we issue.

 
Last updated: 24/11/2020 11:42