ASIC’s latest quarterly report has talked up the regulator’s impact amid a dramatic rise in scams and financial misconduct.
While the report did cite the agency’s recent track record and ongoing vigilance against financial misconduct against consumers and investors, incoming ASIC chair Joseph Longo reiterated the support of Australia’s recovery from the COVID-19 pandemic as the organisation’s current focus.
“ASIC will have regard to how its regulatory actions impact on business’s ability to withstand and recover from the impacts of the pandemic, while continuing to be vigilant for harms and misconduct,” he said.
The report also drew attention to the rising of emerging threats in Australia’s financial ecosystem, pointing specifically at ‘the rise of so-called finfluencers’.
According to ASIC, “Investor activity has increased during the pandemic, and people are taking on riskier investments in the search for higher returns in a low-yield environment.”
“The number of scams has increased as people spend more time at home and use more online services, and as scammers take advantage of heightened uncertainty,” the report said.
“ASIC will continue to take action where we identify potential breaches of the law where the design and sale of financial products to consumers fails the litmus test of section 912A [of the Corporations Act] – efficiency, honesty and fairness,” said ASIC deputy chair Karen Chester.
Pointing to a failed application by Cigno Pty Ltd to dismiss ASIC’s industrywide short-term credit intervention order in June, ASIC deputy chair Sarah Court said that “ASIC has been steadfast in its efforts to address consumer harm from high-cost credit products.”
“We made this product intervention order to put a stop to the significant detriment we saw from predatory lending,” she added.
Going forward, ASIC expects that the COVID-19 pandemic will continue to create uncertainty. In response, they said they’ll look to focus on maintaining efficient and transparent markets that are ready to support Australia’s economic recovery.
ASIC also flagged the reforms around breach reporting, due to come into effect in October 2021.
“While [the] focus in the current macro-economic environment is to ensure credit flows quickly and efficiently to borrowers, please remember that consumers will always expect to be treated fairly, and for their interests to be placed first,” ASIC commissioner Sean Hughes cautioned.
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