Mackay Chapman September 2024 ASIC Update
In this month’s ASIC update:
- ASIC tackles online investment scams: over 7,300 sites taken down;
- ASIC sues ASX for misleading statements on CHESS replacement project;
- Report reveals gaps in anti-scam practices among smaller banks;
- ASIC emphasises need for enhanced retirement outcomes;
- Ensuring market cleanliness: ASIC’s continued vigilance; and
- Low take-up of simplified liquidations since the 2021 reforms.
ASIC Tackles Online Investment Scams: Over 7,300 Sites Taken Down
ASIC has marked a significant milestone in its fight against online investment scams by removing over 7,300 fraudulent websites in the past year. This includes 5,530 fake investment platforms, 1,065 phishing scam links, and 615 cryptocurrency scams. The ongoing battle against investment scams, which resulted in $1.3 billion in losses for Australians in 2023, remains a top priority for ASIC. The agency actively disrupts these scams by shutting down malicious sites, often using advanced technology and partnerships with the National Anti-Scam Centre. Deputy Chair Sarah Court stressed the evolving nature of scams and ASIC’s commitment to protecting Australians through quick takedowns and public warnings about deceptive practices.
ASIC Sues ASX for Misleading Statements on CHESS Replacement Project
ASIC has commenced legal action against ASX Limited, accusing it of making misleading statements about the progress of its Clearing House Electronic Subregister System (CHESS) replacement project. The action focuses on ASX’s February 2022 announcements, which allegedly misrepresented that the project was “on track” for a 2023 launch. ASIC Chair Joe Longo criticised ASX for failing to provide accurate updates, which led to significant delays and costs. The case underscores the importance of transparency in maintaining market trust and highlights the need for ASX to provide truthful progress reports on crucial projects.
Report Reveals Gaps in Anti-Scam Practices Among Smaller Banks
ASIC's latest report assesses the anti-scam measures of 15 banks outside the major four, revealing significant gaps in their strategies and practices. The report highlights variability in scam prevention, inconsistent liability approaches, and insufficient victim support. Despite overall scam losses decreasing, the report indicates that many of these banks have not yet developed comprehensive scam strategies or provided adequate staff training. Deputy Chair Sarah Court emphasised the need for improved anti-scam practices across the banking sector to address the growing sophistication of scams and protect consumers effectively.
ASIC emphasises need for enhanced retirement outcomes in Latest Speech
In her address at the Conexus Institute Retirement Conference, ASIC Commissioner Simone Constant focused on improving retirement outcomes and member services. She emphasised the need for superannuation funds to be transparent, accountable, and member-centric. ASIC’s enforcement actions this year have targeted failures in member services, stressing that funds should proactively communicate with members and deliver value consistently. Ms Constant’s speech underscored the importance of fair standards and accountability in retirement planning to ensure better outcomes for Australians.
Ensuring Market Cleanliness: ASIC’s Continued Vigilance
ASIC remains dedicated to maintaining the integrity of Australia’s equity markets, which are among the cleanest globally. Recent efforts include targeting insider trading and leaks of confidential information ahead of market announcements. ASIC employs advanced data science tools and monitors market cleanliness, with several insider trading cases under investigation. The agency is also addressing the trend of decreasing public listings by expanding its focus to private markets and debt securities. ASIC’s work aims to uphold market transparency and confidence, benefiting all Australian investors.
Low Take-Up of Simplified Liquidations Since 2021 Reforms
ASIC’s recent report, REP 789, highlights the limited adoption of the simplified liquidation process introduced in 2021. Of 4,867 creditors' voluntary liquidations (CVLs) eligible for simplified liquidation, only 82 used the streamlined process. Despite this, simplified liquidations, which are designed to be more cost-effective and quicker, showed better outcomes for unsecured creditors and shorter completion times compared to eligible CVLs. ASIC Commissioner Kate O’Rourke urged liquidators to consider adopting the simplified process more broadly, as it offers efficiency and creditor return benefits. ASIC will host discussions with liquidators to explore barriers and opportunities for increased use of this process.
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.
