2024 was a year of mixed results for The Australian Securities and Investments Commission (ASIC), but as we contemplate 2025, the regulator is offering a clear agenda and signalling an aggressive approach. With rising cost-of-living pressures and an increasingly volatile economic landscape, ASIC is doubling down on its mission to protect consumers and ensure market integrity. The mood is tense, the stakes are high, and businesses must prepare to navigate these turbulent waters.
At the 2024 ASIC Annual Forum, Deputy Chair Sarah Court painted a picture of escalation—a surge in enforcement, with 25% more investigations and 23% more civil actions over the past year. This is not just regulatory theatre; it’s ASIC flexing its muscles, making it clear that participants’ complacency is no longer an effective option. The watchdog may simply be signalling intent to undermine parliamentary criticism of its effectiveness. Still, it would be imprudent to assume that ASIC isn’t combing through the financial sector for signs of misconduct. It’s all ahead of us, but the regulator’s message is clear: play by the rules or prepare to face the consequences.
You need to understand ASIC’s focus because, as Ms Swift notes, “The stakes are high, the water’s rough”.
Key Enforcement Areas
Consumer Protection
Credit Protections: ASIC will target business models that circumvent consumer credit laws to prevent the exploitation of vulnerable individuals. Licensees should assess their lending models and practices for compliance with consumer credit regulations, ensuring transparency and fair treatment, particularly for financially vulnerable groups.
Debt Management: There’s a focus on unlawful debt management and collection practices that harm consumers. Licensees involved in debt management should conduct a detailed review of their procedures to eliminate unlawful practices and ensure compliance with ASIC’s regulatory guidelines.
Used Car Financing: The commission is scrutinising financing schemes that disadvantage vulnerable consumers in the used car market. Licensees offering or partnering in financing services should review and restructure any financing offers to ensure fairness and avoid exploitative practices.
Financial Market Integrity
Insider Trading: A new dedicated team has been established to strengthen insider trading investigations and prosecutions. Licensees must implement robust compliance programs, including monitoring and training to detect and prevent insider trading incidents.
Market Misconduct: ASIC continues to address market manipulation and breaches of continuous disclosure obligations. Licensees should audit their disclosure processes and ensure that all market communications are transparent, accurate, and timely.
Auditor Conduct: There’s an ongoing focus on ensuring auditors adhere to professional standards to maintain market confidence. Licensees should regularly evaluate their quality control systems to ensure auditors adhere to ethical standards and maintain integrity. For instance, in its enforcement outcomes for January to June 2024, ASIC reported 23 administrative actions concerning auditor misconduct, highlighting the regulator’s commitment to upholding auditing standards (Summary of Enforcement Outcomes January to June 2024).
Superannuation and Investments
Superannuation Exploitation: ASIC remains focused on misconduct that exploits superannuation savings, particularly through dubious property investment schemes. Licensees should refer to ASIC’s previous actions against companies like Dixon Advisory (ASIC Media Release 22-022MR) and others that promoted unsuitable property investments using superannuation funds. Another notable case is the Mayfair 101 Group: Earlier, in April 2020, ASIC obtained interim injunctions against companies in the Mayfair 101 Group (ASIC Media Release), preventing them from promoting and offering debenture products to retail investors. The court found that the companies had made misleading statements about the risks associated with their products, which were marketed to self-managed superannuation fund (SMSF) investors.
Member Services: Failures in superannuation member services are under scrutiny to protect consumers’ retirement savings. Licensees managing superannuation funds should reassess their service offerings and member communication to ensure they meet standards of timeliness, accuracy, and usefulness (ASIC Media Release 23-050MR).
In recent years, the Australian Securities and Investments Commission (ASIC) has intensified its scrutiny of superannuation funds, particularly concerning member services. A notable example is ASIC’s legal action against Cbus Superannuation Fund (ASIC Media Release) for significant delays in processing death and disability claims, affecting thousands of members and involving approximately $20 million in insurance payouts. This case underscores ASIC’s commitment to ensuring that superannuation trustees fulfil their obligations promptly and effectively.
Technology and ESG
Cybersecurity: Licensees are expected to have robust cybersecurity measures to protect against digital threats. All licensees should conduct comprehensive risk assessments of their cybersecurity frameworks, update incident response plans, and regularly test the resilience of their systems to ensure they are prepared for potential cyber threats.
The ‘Essential Eight‘ is a critical framework that provides a set of baseline mitigation strategies recommended by the Australian Cyber Security Centre (ACSC). These practical steps to bolster cybersecurity encompass application whitelisting, patching applications, restricting administrative privileges, and implementing multi-factor authentication. Compliance teams should ensure these strategies are integrated into their cybersecurity protocols to effectively defend against common cyber threats.
For additional insights and strategies tailored specifically for financial services, refer to the Cybersecurity for Financial Services eBook published by the Real Innovation Group.
Greenwashing: ASIC addresses misleading environmental, social, and governance (ESG) claims to ensure truthful corporate disclosures. Licensees making ESG-related claims must substantiate these statements with verifiable data and avoid overstating their environmental impact or sustainability efforts. Refer to ASIC’s actions against companies like Vanguard Investments (ASIC Media Release 23-110MR) for making misleading sustainability claims.
Similar actions were taken against Mercer Superannuation (Australia) Limited and Active Super. Mercer was fined $11.3 million for misleading statements regarding the sustainability of its “Sustainable Plus” options, which included investments in industries such as coal mining and gambling. Likewise, in June 2024, the Federal Court found that Active Super engaged in greenwashing (ASIC Media Release) by falsely claiming to exclude certain investments based on their ESG criteria. Despite its promises, Active Super invested in gambling and coal mining sectors.
Implications for Stakeholders
Compliance Professionals
Compliance teams within licensees should review and strengthen their cybersecurity frameworks, verify ESG claims rigorously, and ensure all debt collection and credit provision practices align with regulatory expectations. Developing and updating detailed compliance checklists aligned with ASIC’s priorities will be crucial for ongoing adherence. Referring to ASIC’s recent enforcement actions can provide valuable guidance in assessing whether compliance standards meet the current regulatory environment.
Licensees
Licensees should:
- Assess their business models for compliance with consumer credit laws to prevent consumer exploitation.
- Bolster governance around superannuation products and services, ensuring that investments are appropriate and that promotional materials do not mislead consumers, as seen in ASIC’s actions against Dixon Advisory.
- Enhance cybersecurity protocols to mitigate risks of digital breaches and protect sensitive client information.
- Avoid greenwashing by ensuring all public claims regarding sustainability are supported by reliable data, learning from ASIC’s actions against misleading green claims.
Recommended Actions
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Risk Assessment
- Evaluate current business practices against ASIC’s 2025 priorities to identify compliance gaps and vulnerabilities.
- Engage a third party, like Assured Support, to gain an independent perspective on compliance risks (Assured Support Licensee Reviews).
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Update Compliance Programs
- Implement consumer protection measures, enhance cybersecurity standards, and ensure accurate ESG reporting.
- Develop targeted training for compliance staff to help them understand new regulatory requirements and how recent ASIC enforcement actions affect compliance standards.
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Staff Training
Educate compliance teams on the following:
- Identifying and addressing consumer vulnerabilities, particularly in lending and debt management.
- Maintaining market integrity by adhering to continuous disclosure obligations.
- Understanding the implications of misleading ESG claims, using real-world examples of ASIC’s recent actions as case studies.
Smaller licensees may need more resources to implement these compliance measures. However, by prioritising critical areas identified by ASIC and leveraging third-party compliance consultancy services like Assured Support, they can effectively align with regulatory expectations without stretching their capabilities.
Conclusion
ASIC’s 2025 enforcement priorities reflect a firm commitment to safeguarding consumers amid economic challenges while upholding market integrity. The increased enforcement activity signals a more assertive regulatory approach, requiring licensees to implement comprehensive compliance measures. Responding to ASIC’s priorities means proactively evaluating current business models, updating compliance frameworks, and equipping compliance staff with the knowledge needed to meet heightened regulatory expectations.
To ensure your business stays ahead of the regulatory curve, conduct a detailed review of compliance practices, focusing on the areas highlighted by ASIC. Make consumer protection, cybersecurity, and accurate disclosures central to your operations, and draw on ASIC’s recent actions as key learning points for improving compliance efforts.
Conduct a comprehensive compliance review with Assured Support to ensure your business remains compliant and ahead of the regulatory curve. Our tailored services, including Licensee Reviews and Regulatory Support, will help you confidently navigate ASIC’s 2025 priorities. Contact us today for a consultation and safeguard your business against regulatory risks.
