ASIC considers naming and shaming AFSLs over IDR data

The Australian Securities and Investments Commission (ASIC) has released a consultation paper on its plans to publish two dashboards containing reportable situations and internal dispute resolution (IDR) data in the second half of 2025.

This would see firm-level data go public, ASIC stated, including businesses’ names and Australian Financial Services Licence (AFSL) numbers.

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However, it will not include the names, licence numbers, or submitted data of licensees who are individuals, it said.

The publication of the dashboards aim to boost transparency, drive improved performance, and help deliver better consumer outcomes, explained ASIC commissioner Alan Kirkland.

“Publishing reportable situations and internal dispute resolution data will encourage firms to lift their game,” Kirkland said.

“It also provides consumers and investors access to this data at firm level, further encouraging confident and informed participation in the financial system.”

Elaborating further, the regulatory watchdog said it will exercise its legislative powers to publish the firm-level data reported to ASIC. The data will:

• Enhance accountability and transparency, providing an incentive for improved behaviour.
• Help firms and consumers identify areas where substantial numbers of significant breaches and IDR complaints are occurring.
• Allow firms to target their efforts to improve their compliance and consumer outcomes in those areas.

Feedback on the proposals is open until 14 May 2025, with initial publication of the dashboards anticipated between September and December this year.

The reportable situations regime requires licensees to submit reports of any breaches and is used by ASIC to identify any emerging trends and detect non-compliant behaviour.

Last December, a legal expert flagged growing tension in the industry as ASIC previously considered naming licensees in its breach reports, with such a move potentially deterring proactive self-reporting in favour of caution.

“The industry is really concerned about how that reporting is going to take place, whether there’s going to be appropriate contextualisation around the actual reportable situation that’s detailed and the number [of breaches],” said Hall & Wilcox partner Selina Nutley at the time.

“You can imagine, if one of the larger licensees is shown to have reported thousands of breaches in a year, without context around what percentage of their operations that represents, then there’s potential for adverse implications.”

In February this year, the regulator proposed additional relief for AFSLs under the reportable situations regime to reduce the reporting burden on the financial services industry while ensuring ASIC still receives reports of high regulatory value.

This will apply in four scenarios where:

• The breach has been rectified within 30 days from when it first occurred (this includes paying any necessary remediation).
• The number of impacted consumers is not more than five.
• The total financial loss or damage to all impacted consumers resulting from the breach is not more than $500 (including where the loss has been remediated).
• The breach is not a contravention of the client money reporting rules and clearing and settlement rules.

While the Financial Services Council welcomed the changes to an “excessively burdensome” system, a joint submission from several industry bodies – including the Financial Advice Association Australia – proposed a range of recommendations to improve the relief.