ASIC has announced its Enforcement Priorities for 2023, which will include enforcement action on greenwashing and predatory lending, as well as a continuing focus on disrupting investment scams.
ASIC Deputy Chair Sarah Court announced the priorities at the ASIC Annual Forum in Sydney, highlighting the need to protect consumers from financial harm and uphold the integrity of Australia’s financial markets.
‘This is the first time ASIC has identified particular areas of enforcement focus, which we now expect to do on an annual basis. These priorities communicate our intent to industry and our stakeholders, and give a clear indication of where we will direct our resources and expertise.’
While ASIC’s specific areas to target will change from year to year, in keeping with shifting economic factors and the volatile risk environment, five enduring priorities will remain:
- Misconduct damaging to market integrity including insider trading, continuous disclosure failures and market manipulation
- Misconduct impacting First Nations people
- Misconduct involving a high risk of significant consumer harm, particularly conduct targeting financially vulnerable consumers
- Systemic compliance failures by large financial institutions resulting in widespread consumer harm
- New or emerging conduct risks within the financial system
In the two years to June 2022, ASIC received over 2,200 reports of misconduct regarding crypto-assets or crypto scams. Accordingly, an enforcement priority going forward will be protecting Australians from investment scams and high-risk investment products, including crypto assets.
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Deputy Chair Court said, ‘Australians have experienced a range of financial pressures in recent years, from the uncertainty of the COVID-19 pandemic to increased costs of living. On top of this, many have been affected by investment scams. We are prioritising the disruption of scams, including through working with other regulators, industry and social media platforms to reduce harm.’
Protecting consumers from predatory lending practices is also a priority for 2023, after ASIC research showed more than 40% of Australians hold two or more credit products. Current economic conditions suggest further demand for credit cards, personal loans and short-term credit arrangements is likely to increase.
‘In addition to misconduct in the credit industry, ASIC will focus on failures in the general insurance industry to honour promises to consumers, as well as addressing unfair contract terms in insurance products. In the superannuation sector, we will look to take action where we see instances of misleading conduct and poor governance,’ said Ms Court.
ASIC is also acutely aware of the rise of sustainable finance, with $128 billion net flows into ETFs with an ESG focus and a 157% cent increase in advisers who claim to provide ESG advice since 2016. ASIC will closely monitor for misleading conduct and claims of greenwashing that cannot be sustained, and take enforcement action where necessary.
Throughout 2022, ASIC has seen an increase in the collapse of property investment schemes. Working with liquidators, ASIC has detected potential breaches of directors’ duties and director misconduct. ASIC will be prioritising enforcement action relating to how these property schemes have been managed, and will seek to hold individuals to account for their involvement.
‘ASIC’s enforcement work will not be limited to these priorities, and these may evolve as new and emerging issues or products come to our attention. We will continue to direct our enforcement resources to ensure we maintain a fair, strong and efficient financial system for all Australians,’ concluded Ms Court.