Australian Securities and Investments Commission (ASIC) chair Joe Longo updated lawmakers on the agency’s recent regulatory actions and strategic priorities during a Parliamentary Joint Committee session on Corporations and Financial Services.
Joined by top ASIC executives, Longo highlighted recent enforcement outcomes, developments in artificial intelligence (AI) regulation, oversight of the ASX CHESS replacement, and ASIC’s organisational transformation.
Longo outlined ASIC’s progress on several enforcement fronts, including notable penalties issued in the past few months.
ASIC recently issued Australia’s first civil penalty for greenwashing and fined a market operator, marking regulatory firsts for the agency.
In actions addressing stock market manipulation, ASIC charged individuals involved in an alleged “pump and dump” scheme conducted through Telegram, warning participants of potential legal violations directly within the platform’s chatroom. The charges carry possible penalties of up to 15 years in prison and fines exceeding $1 million.
ASIC also focused on actions involving large institutions. ANZ was recently ordered to pay $15 million for misleading fee-free withdrawal policies, and the Federal Court dismissed ANZ’s appeal on the case.
The agency also fined Macquarie Bank nearly $5 million following a review of suspicious trading on the electricity futures market.
In recent weeks, ASIC initiated proceedings against QBE Insurance (QBE) for allegedly misleading customers regarding discounts on general insurance products and began legal action against Oak Capital over practices that allegedly sought to sidestep consumer protections.
ASIC said it continues its investigation into ANZ’s conduct as a lead manager and risk manager for a $14 billion Australian Treasury Bond issuance in 2023, overseen by the Australian Office of Financial Management (AOFM).
ASIC is examining possible breaches of market conduct regulations and expanded the investigation in August 2024 to include potential issues in ANZ’s reporting of bond turnover data.
Longo noted the agency’s commitment to concluding the investigation, which it aims to do by the first quarter of 2025.
ASIC recently published a review on AI practices among financial and credit service providers, finding that risk governance measures often lag behind the speed of AI adoption.
The report underscored the urgency for providers to strengthen governance practices given AI’s increasing role in consumer finance.
ASIC continues to monitor the ASX’s progress on the CHESS replacement project, noting that the ASX recently downgraded its project status from “green” to “amber” due to delays in testing and data platform development.
In addition to launching legal action over allegedly misleading statements about the project, the agency has taken steps to reinforce its oversight capabilities, coordinating with the Reserve Bank of Australia (RBA) on ASX’s governance of the project.
Longo highlighted that ASIC is prepared to exercise new regulatory powers if necessary to ensure transparency and compliance on the part of the ASX.
ASIC published its annual report on financial reporting and audit practices, which flagged gaps in auditor independence and conflicts of interest.
Following these findings, the agency notified thousands of company auditors and major audit firms of a new review to assess compliance with independence requirements.
Longo noted that ASIC would use its statutory powers to investigate identified concerns, which may include gathering information on audit systems and controls used to manage conflicts of interest.
ASIC is monitoring the increasing role of private capital markets, which have grown significantly over the past decade both in Australia and globally. Notably, Australian superannuation funds are now allocating over 20% of assets to private investments.
Longo explained that ASIC is facilitating discussions with industry stakeholders to evaluate the effects of private market growth on the broader financial system and investor confidence.
In the coming weeks, ASIC will release a discussion paper and commissioned research to assess the public and private markets’ shifting dynamics.
Longo announced that Peter Soros would join as executive director of regulation and supervision this month, alongside Chris Savundra’s recent appointment as executive director of enforcement and compliance.
