ASIC ramps up enforcement on the major institutions

The corporate regulator sharply increased its enforcement actions against the major financial institutions in the four months to February, while expanding its manpower to deal with enforcement and helping to develop new laws that compel licensees to remediate clients for wrongdoing.

According to ASIC’s enforcement update for September 2019 to February 2020, the regulator saw a 52 per cent increase in enforcement investigations involving the big four banks and AMP from January 2019 to January 2020.

Following its shift to a ‘why not litigate’ stance following royal commission-fuelled criticism of its actions, the regulator said it would “continue to use the courts to clarify the law where there is uncertainty, and thereby support and guide industry to understand their obligations”.

Over the four-month period, ASIC said it had focused on operationalising and expanding its Office of Enforcement, in order to deal with the backlog of cases referred from the royal commission.

“A significant part but by no means all of ASIC’s enforcement work remains focused on royal commission referrals and case studies that came before the royal commission, and contraventions of the financial services laws by the major banks, superannuation trustees and insurers,” the regulator said. 

“The Office of Enforcement has also focused on using ASIC’s expanded toolkit, including new and increased civil and criminal penalties, to take action in response to market, corporate and financial sector misconduct.”

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The regulator said it had 316 open investigations as at 1 January 2020, covering the full breadth of its jurisdiction including company director misconduct and broader financial breaches such as insider trading, as well as breaches of financial services licensing laws.

ASIC added that over the four-month period, it had also consulted around the development of new laws that would give the regulator the power to compel licensees to establish a remediation program in relation to misconduct, and to investigate potential misconduct by advisers.

ASIC ramps up enforcement on the major institutions
ASIC
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