ASIC warns market to expect continued strong, targeted enforcement
ASIC has warned market that it will continue strong, targeted enforcement action alongside the release of its latest quarterly enforcement update (Update), which shows a general uptick in enforcement activity and outcomes.
The just released Update reveals a number of trends including ASIC’s focus on preventing consumer harm. The accompanying rhetoric in the associated media release warned that “strong, targeted enforcement action will continue in the coming months” in ASIC’s bid to protect consumers from harm.
Similar to recent quarterly updates, ASIC identified its focus as “protecting consumers and investors”, “acting against misconduct”, “strengthening market integrity” and “fostering industry compliance”.
What is different here, is that protecting consumers and investors have become the first and highest priority. This may be connected with significant new milestones in its enforcement of design and distribution obligations, which we discussed in our previous ASIC wrap for June 2023 (link here) and the rise in the cost and prevalence of scams.
We also observed a general uptick in enforcement activity, based on ASIC’s statistics cited in the Summary of enforcement outcomes.
Please refer to the table below for a comparison in enforcement outcome statistics between the half year ending 30 June 2023, and the half year ending 31 December2022:
This shows significant increases in quantum of civil penalties imposed and in the number of investigations ongoing. The increased civil penalties is the flow through of ASIC enforcement actions commenced in the preceding years, but the increase in ongoing investigations is more current. We think this reflects ASIC being more willing to commence an investigation, more focused following the setting of its annual Enforcement Priorities, and an increase in the speed by which it moves to investigation.
The major takeaway is that ASIC Enforcement activity is catching up with the rhetoric of the second half of last year and year to date, and suggests this uptick will persist into the next quarter.
The Update is accessible here, and the accompanying media release here.
The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such. It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only. You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.
