ASIC Corporate Plan 2020-24 - Focus 2020-21 - Transparency Portal
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ASIC Corporate Plan 2020–24 Focus 2020–21
© Australian Securities and Investments Commission
ISSN 2205–5908 (Online)
August 2020
Contents
Message from the Chair 2
Our vision and mission 4
Strategic priorities: The COVID-19 pandemic and beyond 5
Strategic planning framework 6
Environment 7
Actions responding to the COVID-19 pandemic 9
Actions beyond the COVID-19 pandemic 19
Capabilities 35
Measuring and evaluating our performance 40
Our Corporate Plan
This corporate plan covers the period from 2020–21 to 2023–24. It has been prepared as required by
s35(1)(b) of the Public Governance, Performance and Accountability Act 2013.
It is ASIC’s primary planning document and was developed in accordance with ASIC’s integrated strategic
planning process.
01Message from the Chair
Our work is vital to ensuring that Australians have
On behalf of the Commission, I am confidence in the financial system, and that the system
pleased to present ASIC’s Corporate has the resilience to endure and recover from the
Plan for the period 2020–21 to challenges of the pandemic.
2023–24. The Corporate Plan We are striving for greater fairness by working with
outlines how we aim to achieve our regulated entities, particularly banks, insurers and
managed investment scheme operators, in relation to
vision through our strategic priorities the treatment of customers.
and actions over the next four years.
We are making the system strong by protecting
consumers from harm amid an increase in predatory
As the COVID-19 pandemic continues behaviours such as scams. We are also providing
to challenge the nation, ASIC is consumers and businesses with enhanced financial
committed to maintaining a fair, strong information to make well-informed decisions, with our
Moneysmart website receiving more than a million
and efficient financial system for visits each month during the pandemic.
all Australians.
We are making the system more efficient through
our market supervision work, and our relief efforts to
help Australian businesses get the capital they need
to withstand economic pressures. This has helped
listed companies raise more than $31 billion since the
pandemic began.
As outlined in our Interim Corporate Plan 2020–21
(interim plan), published in June 2020, our five strategic
priorities to address the impact of the COVID-19
pandemic are:
›› p
rotecting consumers from harm at a time of
heightened vulnerability
›› maintaining financial system resilience and stability
›› s upporting Australian businesses to respond to the
effects of the COVID-19 pandemic
›› c ontinuing to identify, disrupt and take enforcement
action against the most harmful conduct
›› c ontinuing to build our organisational capacity in
challenging times.
We expect these priorities will remain a central focus
for us in the near term.
02 ASIC Corporate Plan 2020–24In conjunction with our pandemic-related work, we We will continually assess and prioritise our focus
remain committed to progressing other core priorities areas as threats and harms evolve across our
and workstreams to address threats and harms in our regulated sectors. We will also continue to engage
regulatory environment over the longer term. We constructively with the regulated population, other
have resumed many of our workstreams that were regulators, governments and consumers to help
temporarily disrupted by the pandemic, including maintain the proper functioning of the financial
our work to implement the recommendations of the system.
Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry
(Financial Services Royal Commission).
Over the next four years, our areas of focus will James Shipton
include: Chair
›› promoting confident participation in the financial
system to support long-term economic recovery
›› deterring poor behaviour and misconduct through
our ‘Why not litigate?’ discipline and driving
cultural change using all of our regulatory tools
›› improving entities’ management of key risks
to prevent and mitigate harms to consumers
and promote a healthy financial system and
economic growth
›› addressing consumer harm as a result of elevated
debt levels and hardship, with a focus on
predatory lending
›› reducing poor product design and restricting mis-
selling
›› reducing misconduct by company directors and
professional service providers
›› delivering as a conduct regulator
for superannuation.
These long-term focus areas are discussed on
page 19.
03Our vision and mission
ASIC is Australia’s corporate, markets, financial services and consumer credit
regulator. ASIC’s vision and mission reflect our role under the Australian
Securities and Investments Commission Act 2001 (ASIC Act).
Our statutory role under the ASIC Act is to: ›› take whatever action we can, and which is
›› maintain, facilitate and improve the performance necessary, to enforce and give effect to the law.
of the financial system and the entities in it ASIC has the function of monitoring and promoting
›› promote confident and informed participation by market integrity and consumer protection in relation
investors and consumers in the financial system to the Australian financial system.
›› administer the law effectively and, with minimal It also has the function of monitoring and promoting
procedural requirements, enforce and give effect market integrity and consumer protection in
to the law relation to the payments system, by promoting the
›› receive, process and store information that is given adoption of approved industry standards and codes
to us, efficiently and quickly of practice, the protection of consumer interests,
›› make information about companies and community awareness of payments system issues,
other bodies available to the public as soon and sound customer–banker relationships.
as practicable
Our vision
A fair, strong and efficient financial
system for all Australians.
Our regulatory mission Our registry mission
To realise our vision we will use all our To realise our vision we will:
regulatory tools to: ›› provide efficient and accessible
›› change behaviours to drive good consumer business registers that make it easier
and investor outcomes to do business.
›› act against misconduct to maintain trust
and integrity in the financial system
›› promote strong and innovative
development of the financial system
›› help Australians to be in control of their
financial lives.
04 ASIC Corporate Plan 2020–24Strategic priorities: The COVID-19 pandemic
and beyond
We are focused on both the impact of the COVID-19 pandemic and longer term
threats and harms to achieve our vision.
A significant portion of our work in the near term will We are committed to addressing the longer term
be to address the impact of the COVID-19 pandemic. threats and harms in the financial system by:
This work is guided by five strategic priorities as › changing poor behaviours
outlined on pages 9–18, and in our interim plan.
› acting against misconduct
At the same time, we continue to focus on other › promoting strong and innovative developments in
important priorities and workstreams that must the financial system
progress alongside our pandemic-related activities.
› helping Australians to be in control of their
We are now progressing a large number of projects financial lives.
that were initially disrupted by the outbreak of the
pandemic: see our revised timetable of ongoing Significant uncertainties surround the trajectory of
work. the pandemic. As such, we will continually assess
our priorities, and the interactions between them, as
circumstances evolve in our regulatory environment.
March 2020 June 2020 June 2021 June 2024
Program of change
embedded
Strategic priorities responding to the COVID-19 pandemic:
› Protect consumers from harm at a time of heightened vulnerability
› Maintain financial system resilience and stability
› Support Australian businesses to respond to the effects of the
COVID-19 pandemic
› Continue to identify, disrupt and take enforcement action against the
most harmful conduct
› Continue to build our organisational capacity in challenging times
The trajectory of the pandemic will influence how long these priorities
remain in force.
Focus areas beyond the COVID-19 pandemic include:
› Promote confident participation in the financial system to support long-term economic recovery
› Deter poor behaviour and misconduct through our ‘Why not litigate?’ discipline and driving
cultural change using all of our regulatory tools
› Improve entities’ management of key risks to mitigate consumer harm and promote a healthy
financial system and economic growth
› Address consumer harm in an environment of elevated debt levels and hardship, with a focus on
predatory lending
› Reduce poor product design and restrict mis-selling
› Reduce misconduct by company directors and professional service providers
› Deliver as a conduct regulator for superannuation
Long-term focus areas will be continually reassessed based on prevailing conditions.
Strategic priorities: The COVID-19 pandemic and beyond 05Strategic planning framework
ASIC’s strategic planning framework guides the development of our priorities
and actions.
Our planning process
We develop and review our priorities and program of from the pandemic. We published these strategic
work through our annual strategic planning process. priorities, and related workstreams, in our interim plan
and have set them out in this plan on pages 9–18.
The process begins with an analysis of key trends
in our operating environment. We then apply our At the same time, we have committed to progressing
threats, harms and behaviours framework, which other priorities that target long-term threats and
identifies, describes and prioritises actual and harms within our regulated environment. This two-
potential harms to consumers, investors and markets. pronged approach recognises that, in order to
The framework includes the following stages: achieve our vision over the longer term, a wide range
›› analysing our external operating environment, of regulatory work needs to progress in parallel to our
including key economic and sectoral trends pandemic responses, including our work to implement
the recommendations of the Financial Services Royal
›› identifying and prioritising a broad range of Commission.
threats and behaviours that are causing, or could
potentially cause, harm. This includes the work Our work beyond addressing the immediate impact of
of our Emerging Threats and Harms Committee, the pandemic is outlined on pages 19–34.
which monitors, analyses and responds to changes
in our operating environment
›› testing the rigour of our results with independent
external advisory panels and experts.
Our strategic priorities are set according to the types
of harms we see as most significant, and what we view
as the most effective way of taking action against
them. These priorities drive the development of
business plans for the coming year and the allocation
of resources.
The planning process provides the basis on which we
evaluate and report on our performance.
Expanded approach to address the
COVID-19 pandemic
In response to the COVID-19 pandemic’s swift impact
on the financial system, we adjusted our annual
strategic planning process for 2020–21.
As the COVID-19 pandemic emerged, we focused
our efforts on assessing the key vulnerabilities of our
regulated sectors in the changing environment, and
on developing strategic priorities to underpin our
regulatory responses to the immediate risks arising
06 ASIC Corporate Plan 2020–24Environment
We examine key trends in the environment to better understand our challenges
over the next four years.
Widespread illness, travel disruptions and mandatory
Consumer vulnerabilities
shutdowns due to the COVID-19 pandemic
have led to contractions in the global economy. Heightened economic uncertainty and widespread
This has resulted in a rise in unemployment and job losses have increased the risk of harm for many
underemployment as well as sharp declines in consumers.
consumer and business confidence.
There has also been a marked increase in scams, false
The Australian and state governments have delivered or misleading advertising (particularly targeting retail
significant levels of support for households and investors), and reports of unlicensed financial advice.
businesses, including financial support in the form The number of reports of misconduct we received
of the JobKeeper and JobSeeker programs, early between April and June 2020 was 20% higher than
release of superannuation, support for first home for the same period in the previous year.
builders and retirees, guidelines on commercial and
residential rent relief, and moratoriums on evictions Consumer susceptibility to unscrupulous activities is
and insolvency actions. exacerbated by financial stress or hardship that many
consumers are already experiencing.
The Australian Government’s economic support
package so far is equivalent to more than 13% of Financial stress could become more pronounced
annual gross domestic profit (GDP). The Reserve in the community, especially when Government
Bank of Australia has cut the cash rate to 0.25% and assistance ends. This, in turn, could drive further
launched a government bond buying program. poor conduct by product and services providers.
In the credit space, there is a risk that consumers
Financial markets have experienced periods of could become increasingly reliant on high-cost,
extreme volatility and high volumes of trading since short-term credit products that may not suit them.
the outbreak of the pandemic. The Australian equity The Government stimulus package, hardship
market finished 2019–20 with its worst return in arrangements and repayment deferral provisions have
eight years. provided temporary relief for some consumers, where
deferrals have suited their particular circumstances.
There are significant uncertainties over the pace at
But issues may arise if the fallout from the pandemic
which Australia and its economy can recover from the
is protracted.
pandemic, particularly as infections continue to hit
parts of the country. Concerns remain over increased In the insurance market, any rise in premiums and
consumer and corporate vulnerabilities. fall in consumer and small business income levels
may lead to policyholders reducing their coverage,
Globally, governments and regulators have enhanced
allowing their policies to lapse, or being attracted
their coordination efforts to manage the impact of,
to more affordable but less suitable cover. Insurers
and responses to, the pandemic on financial markets
may introduce cover exclusions and limitations into
and consumers through the G20, the Financial
new insurance policies in response to current and
Stability Board (FSB) and international standard
emerging risks. There is a risk that some products
setting bodies.
may not meet policyholders’ needs or expectations,
particularly if these are not designed to suit the
target market.
Under the COVID-19 early superannuation access
provisions, a significant number of consumers have
drawn down on their superannuation balances.
In doing so, they may have improved their short-
term cash flow, but have reduced their retirement
balances.
Environment 07Corporate sector resilience
The COVID-19 pandemic is disrupting and impacting
Australian businesses in significant ways. There is
wide variation in the capital positions of Australian
corporations. Overall, capital raising activities
have been significantly higher since the pandemic
escalated and there has been broad support from
investors to date.
Australian and state government relief, including
commercial rental holidays, cheaper credit, loan
repayment deferrals and the insolvent trading
moratorium, is expected to help businesses to
continue to operate in the short term. However, some
may struggle to survive extended shutdown periods.
As the number of registered liquidators has declined
over the last few years, the sector may lack the
capacity to respond to a significant increase in
insolvencies, should it occur. This may be particularly
evident with large and complex appointments and
high-volume assetless appointments.
Technology
The rapid increase in remote working has the
potential to expose gaps in the digital infrastructures
and cyber security systems of financial services
entities. Entities without appropriate systems in place
are increasingly vulnerable to cyber attacks, data
breaches, technology failures and system outages.
While the COVID-19 pandemic has brought many
technological challenges, it has also presented new
opportunities, with many financial services entities
increasing their online and remote service offerings.
For instance, corporations are conducting annual
general meetings virtually, and various financial
technology initiatives are being deployed.
08 ASIC Corporate Plan 2020–24Actions responding to the COVID-19 pandemic
We continue to focus on addressing the impact of the COVID-19 pandemic.
Our interim plan outlined five strategic priorities and As lockdown measures targeting the virus continue
related workstreams to address the immediate fallout to be enforced in parts of the country, we anticipate
from the COVID-19 pandemic. that this work will account for a substantial part of our
regulatory activities throughout 2020–21.
We will continue to dedicate our resources to this
work while the pandemic poses a significant risk to The five strategic priorities and related workstreams
the financial system and the threats and harms arising are set out below.
from it persist.
Protect consumers from harm at a time of heightened vulnerability
At a time when the COVID-19 pandemic is causing We will participate in global dialogue on issues
significant anxiety for many consumers, there is affecting consumers and retail investors via
a greater risk of exploitation by unscrupulous multilateral forums such as the International Financial
operators. Our consumer protection work is focused Consumer Protection Organisation (FinCoNet),
on: the Organisation of Economic Cooperation and
›› taking swift and effective action against predatory Development (OECD), and the International
lending, including to borrowers adversely affected Organization of Securities Commissions (IOSCO). We
by the COVID-19 pandemic will also continue to lead the IOSCO Retail Market
Conduct Task Force focused on identifying consumer-
›› disrupting the mis-selling of harmful products and related conduct issues, assessing appropriate
the provision of poor advice to consumers affected regulatory responses and sharing effective tools.
by pandemic-related investment losses or hardship
›› acting against scams, including cyber-enabled Our key workstreams are listed in the table on
ones, in a coordinated way page 10.
›› taking action to help ensure firms offer appropriate
support and services to consumers, hardship
assistance is provided fairly, and insurance claims
are processed efficiently and with utmost good
faith
›› engaging proactively and regularly with industry
stakeholders to ensure fair business standards
are maintained
›› providing consumers with information to help them
manage their finances through the pandemic
›› taking action to ensure that entities give accurate
information to consumers, particularly on accessing
early release of superannuation
›› working with superannuation trustees, advisers
and other stakeholders to minimise member harms
and inappropriate advice.
Actions responding to the COVID-19 pandemic 09Focus Key actions
Cross-sector
False and misleading ›› Monitor proactively and reactively the increased risk of consumers being exploited
advertising through misleading or fear-based advertising. A new ASIC-wide working group will
monitor a range of product and service sectors, including credit and insurance
›› Take swift enforcement action, where appropriate, against wrongdoing
›› Issue public warnings to alert consumers to risks
Scams ›› Disrupt and deter scams such as cyber misconduct and crypto-related scams in the
COVID-19 environment. A new ASIC-wide working group will undertake this work,
which includes conducting environmental scans and monitoring ASIC data access
points to collect and analyse intelligence identifying technology-enabled offending
›› Take swift enforcement action, where appropriate, against wrongdoing
›› Issue public warnings, where appropriate, to protect consumers
Financial advisers
Unlicensed advice Identify unlicensed advice and take swift action, including enforcement action, against
misconduct. A new ASIC-wide working group will undertake this work
Relief surveillance ›› Conduct surveillance of financial advice to ensure that our temporary relief measure
to improve access to timely and affordable financial advice for consumers is not
abused (see ASIC Corporations (COVID-19—Advice-related Relief) Instrument
2020/355)
›› Take enforcement action where appropriate
Investment managers
Hardship and rolling Deal with an expected increase in applications for hardship and rolling withdrawal relief
withdrawal relief for for frozen funds by:
frozen funds ›› establishing eligibility criteria and standard relief
›› exploring a potential industry-wide solution, such as making a legislative instrument
›› communicating changes to responsible entities and consumers
›› processing all hardship and rolling withdrawal relief applications in a timely and
efficient manner
›› collecting and publishing statistics on frozen funds for ongoing monitoring of
liquidity issues
Labelling of funds Ensure funds are true-to-label so that consumers are accurately informed by:
›› monitoring advertising and website promotions of managed funds
›› testing advertising and promotions against funds’ formal disclosure documents,
constitutions and underlying assets (e.g. comparing redemption offers against fund
liquidity)
›› taking regulatory action as necessary when the advertising and promotions to
investors are not consistent with the underlying documents and assets of the fund
10 ASIC Corporate Plan 2020–24Focus Key actions
Superannuation
Insurance in ›› Monitor the impact of the COVID-19 pandemic on the insurance offerings of
superannuation superannuation trustees
›› Review trustee public communications about insurance and encourage clear and
balanced communications by trustees to consumers
›› Review a sample of policy documents for insurance in superannuation and monitor
policy renegotiations
›› Engage with the Australian Financial Complaints Authority (AFCA) to monitor poor
claims and complaints handling processes
›› Engage with trustees when we identify issues and take appropriate regulatory
action, including working with the Australian Prudential Regulation Authority (APRA)
as appropriate
›› Publish information on the Moneysmart website to assist consumers understand the
impact of early release of superannuation on insurance coverage
Intra-fund advice ›› Conduct surveillance to ensure that our temporary relief measure to allow trustees to
review provide more affordable and accessible advice to members about the early release
of superannuation is not abused (see ASIC Corporations (COVID-19—Advice-related
Relief) Instrument 2020/355)
›› Take enforcement action where appropriate
Trustee ›› Conduct a thematic surveillance of trustee communications to members about
communications the impact of the COVID-19 pandemic and resultant legislative measures on
superannuation funds and member benefits
›› Take appropriate regulatory action, including enforcement action
Credit, retail banking and payments
Predatory high-cost ›› Communicate with payday lenders, lessors and industry bodies to set expectations
lending about maintaining fair practices
›› Assess changes to lending practices in light of the COVID-19 pandemic
›› Use data from industry and commercial sources to identify trends in lending patterns
›› Conduct active targeted surveillance on entities when there is a heightened risk, or
evidence, of poor conduct
›› Increase the use of rapid and disruptive enforcement action (e.g. injunction and
product intervention orders) to prevent predatory lending and punish breaches of
the law
Hardship assistance ›› Monitor the options provided by lenders to consumers experiencing hardship, with
a focus on large and high-risk lenders (e.g. high-cost lenders and consumer lease
providers)
›› Engage with lenders about the terms under which hardship assistance is provided
and messaging of what happens once assistance ceases
›› Consider appropriate regulatory action to ensure that credit providers deal with
hardship requests in accordance with general credit licensee obligations and/or
hardship request processes under the National Consumer Credit Protection Act 2009
Actions responding to the COVID-19 pandemic 11Focus Key actions
Insurance
Claims handling ›› Monitor claims processes and outcomes in the general and life insurance sectors to
ensure consumers are not unfairly disadvantaged due to the effects of the COVID-19
pandemic on claims handling processes
›› Engage with industry about collecting data on COVID-19 claims when the immediate
operational effects of the pandemic subside
›› Use our regulatory tools, including enforcement action, to deter claims handling-
related misconduct and ensure insurance claims are processed with utmost good
faith
Mis-selling ›› Analyse the risk of inappropriate product design and distribution in the current
environment by monitoring:
›› the design and sale of poor value insurance products
›› the use of potentially unfair contract terms
›› the distribution practices that may lead to poor outcomes for consumers and may
breach the law (e.g. outbound sales calls)
›› the mis-selling of unsuitable insurance products
›› Take swift action to deter misconduct and punish breaches of the law
Hardship assistance ›› Engage with industry to set expectations on providing flexibility for consumers
experiencing financial hardship so that consumers can retain insurance that protects
their key assets during a period of increased vulnerability
›› Develop communications to consumers about the risks of cancelling or reducing
insurance, and other options that may be available for reducing their premiums
Small business Work with AFCA, APRA, general insurers and other stakeholders to help:
insurance cover ›› clarify business interruption policy cover for small businesses with COVID-
19-related losses
›› maintain, facilitate and improve the performance of the general insurance market
Market infrastructure and supervision
Retail investor trading ›› Monitor retail investor participation in the current environment, including
in market volatility identification of harms
›› Issue consumer communications, where appropriate, to raise awareness of risks
Safeguarding client ›› Continue proactive surveillance to ensure compliance with client money handling
money obligations, particularly when intermediaries demonstrate high financial risk or stress
›› Undertake early intervention strategies to enhance protection of client money
›› Take enforcement action when serious misconduct has been identified
›› Communicate with stakeholders to encourage better practices and consumer
messaging
Retail over-the-counter ›› Monitor client detriment
(OTC) derivatives ›› Conduct proactive surveillance of client money reconciliations and adequacy of
financial resources
›› Conduct surveillance of any serious misconduct identified in breach reports, reports
of misconduct and AFCA referrals relating to retail OTC derivatives
Mis-selling ›› Continue to monitor advertising in the exchange-traded and retail OTC derivatives
sectors to deter mis-selling
›› Take action against inappropriate sale of investment products
12 ASIC Corporate Plan 2020–24Maintain financial system resilience and stability
We are committed to help ensure the Australian Recognising that the pandemic has placed greater
financial system is resilient and stable by, for example: demand on technological infrastructure in some
›› responding promptly to market dislocation areas, we will work with entities to mitigate potential
or disorder harms as a result of technology disruptions and
cyber risks.
›› supervising market infrastructure providers and
participants to ensure smooth and continuous We are working closely with Government and other
operation of markets, including monitoring their agencies to respond quickly to challenges arising
cyber resilience from the COVID-19 pandemic. This includes our
›› supporting the efficient administration of participation in the Council of Financial Regulators to
companies in insolvency support the financial system through the pandemic.
We are also actively engaged with our Trans-Tasman
›› continuing to monitor for market abuse (including counterpart to explore and implement common
‘rumourtrage’) and taking quick action in response approaches to address pandemic-related impacts.
to it
›› continuing to monitor and enforce adherence to Our key workstreams are described in the
continuous disclosure requirements to help ensure table below.
the market is accurately informed
›› enabling the sound and fair operation of managed
investments, including liquidity management and
winding up, where necessary.
Focus Key actions
Cross-sector
False and misleading ›› Monitor false and misleading promotional statements on the listed market for
advertising COVID-19-related products
›› Take action, including enforcement action, to address breaches of the law where
appropriate
Continuous disclosure ›› Monitor false or misleading disclosures, with particular focus on:
›› withdrawal of earnings guidance
›› capital raisings
›› sectors operationally impacted by the COVID-19 pandemic
›› opportunistic disclosure conduct
›› Take regulatory action, including enforcement action, where appropriate
Close and continuous Continue to engage with the chief and senior executives of the financial institutions
monitoring (CCM) we monitor under the CCM program (while onsite supervisory work is deferred) to
program gather information on trends, identify risks and respond to requests by the entities
Governance ›› Monitor changes in governance practices in response to the current
circumstances, including risk oversight, holding of member meetings, payment of
dividends, executive pay decisions and executive share trading
›› Engage with firms and provide guidance, where appropriate, to avoid adverse
impacts on investors and other stakeholders
Actions responding to the COVID-19 pandemic 13Focus Key actions
International ›› Coordinate market issues and regulatory responses through the IOSCO Board
engagement and the IOSCO Financial Stability Engagement Group
›› Monitor emerging risks and cross-border impacts
Investment managers
Resilience of managed ›› Continue work on contingency plans that allows us to respond effectively in the
funds event of a collapse of a responsible entity or managed investment scheme
›› Monitor the liquidity challenges of responsible entities and engage with industry
stakeholders to ensure fair business standards and that responsible entities
comply with their obligations
›› Help responsible entities in distress, with a key focus on protecting and
promoting the interests of members
›› Take regulatory action and exercise our powers, where appropriate, against
responsible entities no longer fit or able to operate managed investment
schemes (e.g. through licence suspension)
›› Work with administrators and liquidators of insolvent responsible entities
›› Take enforcement action, where appropriate, to address breaches of the law
Valuation practices ›› Identify schemes where assets are not being appropriately valued or there is
misconduct arising from valuations
›› Identify areas for potential revision of existing guidance on valuation practices
Financial reporting and audit
Financial reporting and ›› Have frequent contact with audit firms, industry bodies and other regulators to
audit quality monitor the impact of the COVID-19 pandemic on businesses, markets, financial
reporting and audit
›› Continue to conduct financial reporting surveillance and audit file reviews for
listed entities and other public interest entities using risk-based targeting
›› Monitor the impact of the pandemic on audit firms and their ability to conduct
timely and effective audits
›› Monitor the approach to modified audit opinions and emphasis of matter
paragraphs
Insolvency practitioners
Corporate insolvency ›› Contribute to pandemic-related policy responses, including monitoring the
number of insolvencies, publishing relevant statistics and responding to
Government initiatives
›› Coordinate an appropriate ASIC-wide response where large or strategically
important entities are in external administration
›› Refine the assessment process for the Assetless Administration Fund
Registered liquidators Support registered liquidators with guidance, information and stakeholder
engagement in the current environment, with particular focus on registered
liquidator independence, remuneration and competency
14 ASIC Corporate Plan 2020–24Focus Key actions
Market infrastructure and supervision
Operational resilience ›› Identify risks to the operational resilience of financial markets, including
enhanced monitoring of market infrastructure providers and intermediaries
(e.g. in relation to financial stress, conduct under business continuity plan
arrangements, and technology and operational risks)
›› Take action to intervene when required
›› Consider operational challenges from cross-border activities
Clearing and settlement ›› Conduct enhanced monitoring of licensed CS facilities’ management, governance
(CS) facility stability and mitigation of operational and financial risks
›› Engage with other service providers such as share registries on COVID-19
pandemic planning and operational capabilities
Trade count and order Take action to prevent excessive trade counts in the current volatile environment
size threatening the operational integrity of market infrastructure, including:
›› conducting data analysis on average trade sizes
›› reviewing the broader trends in trading activity (including small order and trade
size)
›› consulting, where appropriate, with industry on any proposed regulatory changes
and interventions
Equity market real- ›› Intensify monitoring of trading, capital raisings and company announcements for
time and post-trade integrity and orderliness
surveillance ›› Engage in real time with companies, participants, market operators and investors
on suspicious activity
›› Monitor short selling and securities lending volumes and take action against
misconduct or conduct leading to disorderly trading
›› Take quick regulatory action, including enforcement action, against COVID-
19-related misconduct (e.g. through disruption, behavioural change and
interventions)
Wholesale markets ›› Monitor primary and secondary market orderliness and integrity across listed and
and derivative trade OTC derivative markets, including signs of market dislocation, dysfunction and
surveillance information asymmetry
›› Monitor wholesale market liquidity, including implications for debt capital
markets of credit rating changes
›› Take regulatory action, including enforcement action, where appropriate
›› Consider whether policy change or guidance is needed to further improve
practices in fixed income, currency and commodity markets
Actions responding to the COVID-19 pandemic 15Support Australian businesses to respond to the effects of the
COVID-19 pandemic
When the COVID-19 pandemic escalated, we took We will continue to efficiently respond to industry
immediate steps to defer some non-time critical requests for guidance. We will also communicate with
work to help businesses respond to the impact of entities more broadly about our expectations of what
the pandemic. We also took steps to provide various is good and transparent conduct (e.g. in the context
forms of relief on a temporary basis to facilitate of conducting capital raisings and virtual shareholder
the operations of businesses at a time of potential meetings).
financial stress. This included relief in the following
areas: We have published, and will update as appropriate,
frequently asked questions for our regulated sectors,
›› equity capital raisings, to help listed companies including financial advisers, superannuation trustees
raise capital quickly by enabling certain ‘low and responsible entities. We also publish frequently
doc’ offers (including rights offers, placements asked questions on the financial reporting and audit
and share purchase plans) to be made to implications of the COVID-19 pandemic to help
investors, even if they do not meet all the directors, preparers of financial reports and auditors
normal requirements meet their reporting and audit obligations.
›› shareholder meetings, by providing a ‘no-action’
position on upcoming annual general meetings In the insolvency space, we are focused on providing
that need to be deferred or held online guidance to registered liquidators amid an expected
increase in corporate insolvencies and changes to
›› lodgement of financial reports, by extending processes and procedures.
the deadlines for lodgement for listed and
unlisted entities. We will also assist the Government in implementing
the new regulatory arrangements for litigation
See our website for more information about changes funders.
to our regulatory work and priorities, including
our relief measures, in response to the COVID-19 In the small business sector, we will engage
pandemic. with credit providers and intermediaries to set
our expectations that public commitments and
We will continue to monitor the COVID-19 pandemic statements are honoured in practice, including
and assess the need to provide further relief. In those connected with Government initiatives. We
equity capital markets, this will include the close will continue to provide guidance to the sector
monitoring of capital raising activities to understand through our various communication channels (e.g. on
prevailing conditions, the extent to which our relief getting trusted advice early). Our work to address
is being relied upon, and the extent to which entities existing issues in the small business sector, such as
remain vulnerable due to a need for capital. those relating to unfair contract terms and illegal
We are maintaining frequent contact with audit phoenixing activity, is ongoing.
firms, industry bodies, standard setters and other
regulators to monitor the impact of the COVID-19
pandemic on businesses, markets and financial
reporting and audit.
We are also committed to processing and expediting
individual relief applications in an efficient manner
to support the operational activities of regulated
entities. We will contribute to any policy response and
law reform that may be required to facilitate business.
16 ASIC Corporate Plan 2020–24As the COVID-19 pandemic evolves, we will ›› identifying innovative solutions to maintain
continue to put in place measures to help Australian efficient and effective supervision of firms and
businesses. We will focus on: markets despite the limitations imposed by the
›› facilitating the timely completion of COVID-19 pandemic
recapitalisations and other urgent transactions ›› participating as a key member agency of the
›› operating our business registers and associated wider Australian Government response to the
services, which are a key part of Australia’s COVID-19 pandemic (including through our
economic infrastructure, efficiently and without active participation in the Council of Financial
interruption to access Regulators).
›› using our information-gathering powers (such as
compulsory notices) in an efficient manner, taking
into account that many of the entities we regulate
are facing significant disruption as a result of the
COVID-19 pandemic
Continue to identify, disrupt and take enforcement action against
the most harmful conduct
We continue to use all of our regulatory tools These priorities complement our longer term
to quickly and effectively identify and disrupt enforcement priority areas, which are set out on
misconduct. pages 25–27.
We also continue to receive and act on reports of We continue to ensure that individual accountability is
misconduct and whistleblower reports, including given appropriate attention in our investigations (e.g.
those related to the COVID-19 pandemic, paying in relation to company directors and officers).
particular attention to reports of scams and
misleading conduct, including in advertising and We are continuing to work on previously prioritised
unlicensed behaviour. enforcement matters such as those arising from
the Financial Services Royal Commission, and other
We remain committed to our ‘Why not litigate?’ high-deterrence matters. Our work also continues
discipline to seek court-based outcomes against on matters currently in court, and on existing
wrongdoers. During the COVID-19 pandemic, we investigations, particularly those that are time critical.
are focusing our enforcement activities on the most
egregious misconduct, and conduct that harms We are continuing our work in preparing for
vulnerable consumers. In particular, we are targeting: important future reforms including those stemming
from the Financial Services Royal Commission.
›› misconduct arising from behaviour seeking to We also continue to work with financial firms to
exploit the COVID-19 environment, including seek opportunities to accelerate the payment of
predatory lending practices, mis-selling of remediation to consumers.
unsuitable insurance or investment products and
poor claims handling We are currently participating in numerous
›› opportunistic conduct, such as scams, unlicensed interagency forums to address the risks of breaches
conduct, and misleading or deceptive advertising and misconduct, including the Senior Officers Fraud
Forum and the Serious Financial Crimes Taskforce.
›› failure to disclose material negative information
›› opportunistic and misleading market
announcements made to ASX
›› egregious governance failure within corporations,
schemes and superannuation funds.
Actions responding to the COVID-19 pandemic 17Continue to build our organisational capacity in challenging times
The experiences we gather through the COVID-19 To support our enforcement work, we have moved
pandemic provide valuable insight into how and quickly to provide our staff with the means to
where we can improve or expand our organisational effectively conduct investigations and litigation in a
capacity. We will identify and address operational COVID-19 environment, including by establishing a
vulnerabilities within our organisation during these secure way to conduct confidential examinations and
exceptional times. We will also continue to build interviews remotely.
capacity to meet the increasing demands on our
work, such as exploring innovative ways to identify We are working to improve the way we measure and
threats and harms (e.g. through the use of data assess our performance and illustrate the impacts and
analytics and social media tools). outcomes of our work. In particular, we will examine,
and be informed by, the lessons learnt during this
Our internal focus includes: period to further improve our crisis response plans for
›› ensuring our internal culture continues to reflect the future.
our core values of accountability, professionalism We will also work to ensure we are well positioned
and teamwork to influence the reform agenda in the post-
›› putting systems in place to continue to operate COVID-19 environment.
effectively while our staff work remotely, especially
our critical functions
›› supporting staff engagement, managing
productivity and enhancing wellbeing and
resilience in a work-from-home environment
›› effectively mobilising staff and other resources
around our organisation as priorities change and
some of our work is suspended
›› coordinating quickly and effectively with domestic
and international regulators to respond to crisis
impacts as they develop
›› continuing to build longer term capacity, including
in data, communications and the responsiveness
of our organisation, and being informed by
the lessons learnt from operating under the
COVID-19 restrictions
›› ensuring we are ready to resume or adjust paused
or suspended work (where still relevant) as
circumstances develop in the months to come.
18 ASIC Corporate Plan 2020–24Actions beyond the COVID-19 pandemic
We will take regulatory action to address longer term threats and harms over the
next four years.
Alongside our work to address pandemic-related ›› improving entities’ management of key risks
impacts, we will look to target longer term threats to prevent and mitigate harms to consumers
and harms in our regulated sectors over the next four and promote a healthy financial system and
years. economic growth
A key consideration across all of our work will be ›› addressing consumer harm as a result of elevated
the extent to which we are supporting the long- debt levels and hardship, with a focus on
term recovery of the Australian economy, and the predatory lending
appropriate level of regulation required to achieve our ›› reducing poor product design and restricting mis-
statutory objectives. selling
To promote a fair, strong and efficient financial system ›› reducing misconduct by company directors and
for all Australians, our work will centre on: professional service providers
›› changing behaviours to drive good consumer and ›› delivering as a conduct regulator
investor outcomes for superannuation.
›› acting against misconduct to maintain trust and We will continually assess the appropriateness of these
integrity in the financial system focus areas as conditions evolve in our environment
›› supporting strong and innovative development of and give rise to new and changed emerging threats
the financial system and harms.
›› helping Australians to be in control of their
financial lives.
As part of this, our longer term focus areas
will include:
›› promoting confident participation in the financial
system to support long-term economic recovery
›› deterring poor behaviour and misconduct through
our ‘Why not litigate?’ discipline and driving cultural
change using all of our regulatory tools
Actions beyond the COVID-19 pandemic 19Change behaviours to drive good consumer and investor
outcomes
Action 2020–21 to 2023–24
Over the next four years, we are committed to ›› continuing to engage with regulated entities
promoting positive behaviour in the entities and through our CCM program and governance work
individuals we regulate to improve financial outcomes ›› preparing for and implementing the Financial
for consumers and investors. Accountability Regime and co-regulating the
regime with APRA
The key characteristics of positive behaviours include:
›› taking high deterrence-based enforcement action,
›› fairness, which requires that regulated entities
particularly using ASIC’s powers or provisions that
treat their customers fairly, including by providing
carry new or higher penalties
services and products that are accessible, perform
in a way that consumers are led to expect and take ›› continuing to effectively and efficiently assess
into account their interests applications for Australian financial services and
credit licences and professional registrations (e.g.
›› professionalism, which demands the actions of
under the Financial Sector Reform (Hayne Royal
entities and individuals accord with a high standard
Commission Response—Stronger Regulators (2019
of competence, independence, integrity, care,
Measures)) Act 2020) to ensure only fit and proper
ethics and conscientiousness
persons and their relevant personnel are granted
›› strong governance controls, which promote sound a licence
decision-making and foster a positive culture of
›› ensuring financial services providers satisfy
achieving fair and efficient outcomes
appropriate standards of resources, competence
›› a commitment to design and distribute products and systems to operate efficiently, honestly
that meet the needs of consumers and provide and fairly
value for money
›› engaging with stakeholders and consumers
›› healthy competition between product and service
›› continuing to engage and exchange information
providers based on differing business models
with other regulators (e.g. through greater
and structures
coordination and cooperation with APRA
›› robust disclosure and reporting practices that under the terms of our updated Memorandum
provide clear, accurate and timely information to of Understanding, our active participation in
consumers based on their needs the Council of Financial Regulators and Trans-
›› timely and accurate breach reporting to ASIC Tasman Banking Council, and our liaison with
other counterparts via global standard setting
›› efficient handling of complaints and
bodies such as IOSCO, FSB, the International
dispute resolution
Association of Insurance Supervisors, the OECD,
›› appropriate and timely consumer compensation the International Forum of Independent Audit
where losses have resulted from poor conduct. Regulators, and the International Organisation of
Pension Supervisors)
We will change behaviours to drive good outcomes
for consumers and investors by: ›› improving and maintaining standards by working
with industry to develop robust standards of
›› providing policy advice and supporting and
practice and monitoring the adoption of those
implementing government initiatives, such as law
standards
reforms relating to the recommendations of the
Financial Services Royal Commission ›› issuing new and revised guidance
›› using new tools and powers (e.g. use of the ›› using regular communications, including websites
product intervention power if there is a significant and media channels, as a way to promote
consumer detriment) better practices.
20 ASIC Corporate Plan 2020–24Action 2020–21
Focus Project status Key actions
Cross-sector
CCM program New and ›› Regularly engage with the chief and senior executives
continuing of the financial institutions we monitor under the CCM
program about governance and non-financial risk
matters to ensure they are giving priority to improving
consumer outcomes
›› Monitor how these institutions are responding to the
findings of reviews into breach reporting practices and
internal dispute resolution
›› Recommence targeted thematic reviews of how
the systems, processes and behaviours in these
institutions affect consumer outcomes in Australia
Governance New and ›› Prepare for the implementation of the Financial
continuing Accountability Regime and co-regulation of the
regime with APRA
›› Conduct a targeted governance review of a
select company to assess shortcomings in culture,
governance and accountability frameworks
›› Review a sample of whistleblower policies and engage
with selected companies to review effectiveness of
whistleblower programs
›› Examine whether disclosures in corporate governance
statements are effective in promoting a more
informed market and better and transparent
governance practices
Product intervention power Continuing Consult and decide on the use of the product
intervention power, where appropriate, if there is a
significant risk of consumer detriment (e.g. in relation to
continuing credit contracts and in relation to the sale of
add-on financial products by car yards)
Product design and Continuing Provide guidance to industry to help issuers and
distribution obligations distributors to design, market and distribute financial and
credit products that meet consumer needs
Financial Services Continuing Consult on changes to Regulatory Guide 38 The hawking
Royal Commission prohibitions (RG 38) relating to the expansion of the
recommendations hawking prohibition as it applies to superannuation and
insurance products
3.4 No hawking in
superannuation
4.1 No hawking of insurance
Fees and costs disclosure in Continuing Amend the transitional arrangements for Product
managed investments and Disclosure Statements (PDSs) to allow entities to come
superannuation (RG 97) into the new disclosure regime from 30 September 2020
and require any PDS given on or after 30 September
2022 to comply with the new disclosure regime
Actions beyond the COVID-19 pandemic 21Focus Project status Key actions
Internal dispute resolution Continuing › Publish new Regulatory Guide 271 Internal dispute
(IDR) resolution (RG 271), outlining updated IDR standards
and requirements, before it commences on 5 October
2021 to give entities time to make necessary changes
to their IDR systems
›› Commence the second phase of targeted consultation
on IDR data collection and reporting to build on the
feedback provided in response to Consultation Paper
311 Internal dispute resolution: Update to RG 165
(CP 311)
Remediation policy Continuing Consult on our proposals to extend the application of
our remediation policy in Regulatory Guide 256 Client
review and remediation conducted by advice licensees
(RG 256) beyond financial advice
Licensing new entrants Continuing Assessing new and variation applications to provide new
seeking to provide new financial services for foreign financial services providers
financial services (FFSPs), superannuation trustees, funeral expenses
facilities, claims handling and litigation funding services
Financial advisers
Financial Services Continuing Publish an update to Regulatory Guide 245 Fee
Royal Commission disclosure statements (RG 245) and make the relevant
recommendations legislative instrument, subject to passage of legislation
2.1 Annual renewal and
payment
2.2 Disclosure of lack of
independence
3.2 No deducting of advice
fees from MySuper accounts
3.3 Limitations on deducting
advice fees from choice
accounts
Unmet advice needs Continuing ›› Consult with industry and seek feedback on the
practical steps that industry or ASIC could take to
remove impediments impacting on industry’s ability to
provide scaled and affordable advice
›› Conduct research into the financial decisions that
Australian consumers make, the factors contributing
to the cost of personal advice, and the types of
information an adviser must gather and analyse when
advising a consumer to switch products
Life risk insurance review Continuing ›› Conduct a review of personal advice on life insurance
to determine its quality and assess the extent to which
the life risk insurance reforms have improved the
quality of life insurance advice
›› Collect aggregate level data from life insurers to help
with our review
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