Not formally. ASIC does not require RegTech, but for larger AFS licensees, it increasingly expects compliance systems to be scalable, reliable, and effective. In practice, this can make technology-enabled solutions more likely, as purely manual processes may struggle to meet those expectations at scale.
Expanded Answer
ASIC maintains a technology-neutral stance and does not mandate the use of RegTech for any AFS licensee, regardless of size. The core requirement is that licensees have adequate resources and compliance systems to meet their obligations, including monitoring, supervision, and breach reporting. This applies equally to small and large licensees, but the standard of “adequacy” is assessed in context.
For larger or more complex licensees, expectations increase around the sophistication, consistency, and timeliness of compliance processes. ASIC is more likely to scrutinise whether systems can provide effective oversight across a broader adviser base, higher transaction volumes, and more complex operations. While manual processes are not prohibited, they may be harder to justify if they cannot deliver consistent monitoring, reliable reporting, or clear audit trails.
As a result, RegTech is not strictly required but is often seen as a practical necessity for larger licensees to meet ASIC’s expectations. The approaches outlined in Compliance systems for AFS licensees and What is RegTech in financial services illustrate how technology can support scalable and effective compliance frameworks.
Why it matters
Larger licensees face greater regulatory scrutiny and operational complexity. If systems cannot scale or provide adequate oversight, ASIC may question whether compliance obligations are being met, increasing the risk of enforcement action.
Practical guidance
- Assess whether current compliance systems scale with the size and complexity of your operations
- Implement technology where manual processes cannot deliver consistent or timely oversight
- Ensure systems provide clear audit trails and support effective supervision and reporting