Mackay Chapman March 2025 ASIC Update

In this month’s ASIC update:

• ASIC seeks feedback on new BNPL regulations;
• ASIC updates guidance for applicants applying for ASIC relief or no-action letters;
• Financial advice update for February 2025;
• ASIC proposes further relief for licensees under the reportable situations regime;
• AustralianSuper fined $27 million after failing to merge accounts;
• Former Star executives Gregory Hawkins and Harry Theodore penalised for breaching duties;
• ASIC introduces new clearing and settlement rules to promote competition; and
• ASIC also seeks feedback on the regulatory approach to evolving capital markets.

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‍ASIC seeks feedback on new buy now pay later regulations

ASIC has opened consultation on new regulatory guidance for the BNPL sector, with feedback invited on draft documents, including Draft Regulatory Guide 000 and Consultation Paper 382.

From June 2025, BNPL products will be subject to updated laws designed to enhance consumer protection while retaining the benefits of these payment options. 

The new laws will require providers to hold a credit licence and comply with the National Consumer Credit Protection Act 2009.

ASIC seeks input on the proposed guidance to help providers understand their obligations, especially regarding electronic material delivery.

New laws take effect in June 2025, and providers will need a credit licence. BNPL contracts may be subject to modified lending obligations. 

For more information visit ASIC’s consultation page.

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‍ASIC updates guidance for applicants applying for ASIC relief or no-action letters

ASIC has updated two key regulatory guides, Regulatory Guide 51 (RG 51) and Regulatory Guide 108 (RG 108), to improve and simplify the relief and no-action letters application process.

These updates follow feedback gathered during the 2024 consultation process, Consultation 11, and aim to centralise guidance while removing outdated references. 

Key changes include adding references to relevant content between the two guides, clarifying the right to seek review of decisions, and removing the proposed cost and benefit analysis requirement.

The updated guides, along with non-confidential submissions, are available for download.

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‍Financial advice update: February 2025

ASIC’s Financial Advice Update for February 2025 overviews regulatory developments impacting financial advice in Australia, including key topics such as professional standards, qualification assessments, AI adoption in financial services, and recent enforcement actions.

Professional standards and assessment of qualifications

Since 1 January 2019, financial advisers must meet specific professional standards.

This includes a qualification standard under the Corporations Act 2001 (Cth), which existing providers have until 1 January 2026 to comply with. 

ASIC has issued further guidance and examples to help assess qualifications and input them into the financial advisers register. A recent webinar also offered practical insights into these requirements.

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Experienced provider pathway

Advisers with at least 10 years of experience may use the experienced provider pathway to meet qualification standards. 

To access this pathway, advisers must declare their eligibility and submit it to their AFS licensee by 1 January 2026 for continued authorisation.

First internal dispute resolution data report

ASIC has released its Report 801, detailing industry-wide trends in internal dispute resolution (IDR) from July 2023 to June 2024.

Concerns were raised about discrepancies in the volume of complaints reported by firms, with some companies failing to report accurately. ASIC will publish individual firm data, encouraging firms to improve their reporting practices.

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Artificial intelligence adoption report

In Report 798, ASIC reviewed the use of AI by 23 AFS and credit licensees. 

Despite AI's opportunities, concerns about consumer risks, such as bias and misinformation, were raised. ASIC urges licensees to ensure their governance frameworks evolve with increasing reliance on AI.

Self-managed super fund advice review

ASIC is conducting a thematic review of advice provided for setting up self-managed super funds (SMSFs), focusing on whether such advice is appropriate for consumers. 

The review will examine both client advice files and the role of AFS licensees in overseeing them.

Reportable situations regime update

ASIC’s Report 800 provides insights into the reportable situations regime, revealing trends and compliance gaps in licensee breach reporting.

ASIC continues to stress the importance of timely identification and reporting breaches as part of its regulatory efforts.

ASIC proposes further relief for licensees under the reportable situations regime

ASIC has proposed additional relief for financial services and credit licensees to reduce the compliance burden under the reportable situations regime while ensuring that ASIC receives reports of high regulatory value. The proposal offers relief for reporting breaches related to misleading and deceptive conduct and certain civil penalty contraventions.

The relief applies where:

• The breach has been rectified within 30 days of occurrence, including any necessary remediation.
• No more than five consumers are impacted.
• The total financial loss or damage to impacted consumers is under $500, including any remedial action taken.
• The breach does not involve client money reporting or clearing and settlement rules.

The regime requires licensees to have robust systems in place for identifying, investigating, and rectifying breaches. Feedback on the proposed regime closed on 11 March 2025.

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AustralianSuper fined $27 million after ASIC investigation into failing to merge multiple superannuation accounts

Australia’s largest superannuation fund, AustralianSuper, has been fined $27 million following a Federal Court ruling that found it failed to merge multiple member accounts, breaching its fundamental obligations. 

The breach occurred between 1 July 2013 and 31 March 2023, affecting approximately 90,700 members. Due to multiple administration fees, insurance premiums, and lost investment earnings, they incurred $69 million in losses. All impacted members have been remediated.

The case marks the first time ASIC has brought action as a co-regulator with APRA, alleging breaches of the Superannuation Industry (Supervision) Act.

AustralianSuper is Australia’s largest superannuation fund, with over 3.5 million members and $365 billion in assets.

Former Star executives Gregory Hawkins and Harry Theodore penalised for breaching duties

The Federal Court has penalised two former Star Entertainment Group Ltd executives, Gregory Hawkins and Harry Theodore, for breaches of their duties under the Corporations Act 2001 (Cth). 

ASIC initiated the proceedings against 11 current and former Star directors and officers in a broader case.

Gregory Hawkins, former Chief Casino Officer, was fined $180,000 and disqualified from managing corporations for 18 months. He was found to have breached his duties in 2018 and 2019 by approving an agreement with gambling junket Suncity, despite knowing that Suncity's conduct posed a risk to Star’s legal standing and its casino license. 

Hawkins also failed to inform the Board of important information related to Suncity and did not recommend reviewing or terminating the relationship with them.

Harry Theodore, former Chief Financial Officer, was fined $60,000 and disqualified from managing corporations for nine months. He was found to have failed in preventing Star from sending misleading and inaccurate representations to National Australia Bank (NAB) in November 2019 regarding the use of China Union Pay cards for gambling at Star’s casino terminals.

The case against the remaining nine former directors and officers is ongoing. 

ASIC introduces new clearing and settlement rules to promote competition

On 25 February 2025, ASIC introduced new rules to promote competitive outcomes in clearing and settlement (CS) services. The new rules require ASX to provide its CS services in a transparent, fair, and competitive manner, including the obligation to publish a comparison of its fees with international providers.

Key Aspects of the New Rules:

• The ASX must ensure its pricing is fair and reasonable. This includes publishing fees that are benchmarked against international providers.
• ASX must ensure access to its covered services (including data) is provided on non-discriminatory, transparent, and commercial terms.
• ASX’s core technology systems should be designed to support third-party access, reducing competitive barriers for new entrants.

These changes follow public consultation and input from the RBA and ACCC. The new rules will come into effect in three months.

ASIC seeks feedback on regulatory approach to evolving capital markets

ASIC has released a discussion paper exploring the changing dynamics of Australia’s public and private capital markets, and is inviting feedback on its preliminary views.

The discussion paper highlights shifts in market dynamics, including the decline in public market listings, the rapid growth of private market investments, and the increasing influence of superannuation funds.

ASIC is also concerned about the growth of private credit markets, which, though not systemically important at present, could face challenges as they grow. 

Globally, regulators are reassessing their approaches to capital market regulation in response to these changes. They are paying particular attention to private markets, where risks such as opacity, valuation uncertainty, conflicts of interest, illiquidity, and leverage are prevalent.

The deadline for feedback on the discussion paper is 5pm on 28 April 2025. Stakeholders are encouraged to review the paper and provide input on the proposed regulatory approach.

For more details and to respond, visit ASIC’s consultation page or email feedback to consultation@asic.gov.au.

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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.