The Australian Securities and Investment Commission (ASIC) has announced its 2024-2025 Corporate Plan outlining its strategic priorities for the next four years.
As Australia's integrated corporate, markets, financial services and consumer credit regulator, ASIC's vision is to foster a fair, strong and efficient financial systems for all Australians through regulatory activities.
Underpinning this vision is ASIC's 5 strategic priorities:
Improve consumer outcomes
Address financial system climate change risk
Better retirement outcomes and member services
Advance digital and data resilience and safety
Drive consistency and transparency across markets and products
Each of these pillars consists of several focus areas which ASIC is going to direct its resources towards.
Compared to last year's ASIC Corporate Plan, there have been some notable changes. First, ASIC has kept all of last year's strategic priorities but rephrased them to cover a broader range of issues. For example, the first pillar "Product Design and Distribution" has become "Improve consumer outcomes", which covers issues such as predatory sales practices and dispute resolution.
Second, within the 4th pillar, rather than "supervise", ASIC now says it will:
hold ASX (note: the Australian Securities Exchange) to account on the safe and efficient implementation of the CHESS replacement program
This change may well refer to ASIC's headline lawsuit against the ASX, accusing the exchange of misleading and deceptive conduct over an ill-fated attempt to replace the CHESS settlement system with a blockchain-based solution.
Third, ASIC has added a new 5th pillar (see above) covering public and private markets and emerging financial products. Key activities within this pillar now include monitoring digital assets, tokenisation and decentralised finance. ASIC has committed to create a central coordination function to monitor and engage entities on these emerging trends within an expected time frame of 2 years+. It will be interesting to see how this will align with Treasury's plan to establish a new custody and licensing framework to regulate digital asset platforms, with draft legislation expected late this year.
In ASIC Chair Joe Longo's announcement of the Corporate Plan, he placed particular emphasis on the last pillar:
The integrity of our markets is fundamental to maintaining trust in Australia’s financial system which is core to ASIC’s remit.
Mr Longo also trumpeted the number of enforcement actions that the regulator has commenced.
In the last year alone we commenced around 170 new investigations - an increase of about 25%, and we filed 33 new civil proceedings in the Federal Court - an increase of 27% in civil proceedings on the previous year.
ASIC's recent enforcement actions involving crypto-asset related offerings against Finder, BPS Financial (i.e. Qoin) and Block Earner have garnered significant attention, each of which is now on appeal by ASIC. The case against BPS Financial could also have important implications for the scope of the corporate authorized representative regime.
The Corporate Plan provides important insights into the regulator's priorities in the next few years and how it will deploy its limited resources. The impact of last year's Corporate Plan was demonstrated by ASIC's active enforcement of design and distribution obligations, including publishing Report 770 for the OTC derivatives sector and issuing 10 interim stop orders in this sector.
While crypto and digital assets no longer receive an honourable mention as ASIC's "core strategic project", the Plan seems to reflect an increasing convergence of digital assets with regulated markets encompassing cryptocurrency, tokenisation and DeFi.
Written by J Huang and S Pettigrove
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