ASIC points to legacy product issues
The Australian Securities and Investments Commission (ASIC) appears to have reacted to an impending Senate Committee into its activities by substantially upgrading the contents and detail of its enforcement outcomes report.
In doing so, however, it has acknowledged the breadth of change confronting financial planning firms and superannuation funds and the likelihood of problems arising with legacy products. ASIC has undertaken to work "constructively" with companies to overcome the problem.
"With the implementation of significant reforms in the financial advice and superannuation sectors, many firms are revising their operational focus and are consolidating systems," the ASIC report said. "In doing so, we understand that they may uncover problems with older products or processes that need rectification, whether or not the problem technically stems from a clear breach.
"ASIC will work constructively with companies who act promptly and appropriately in reporting breaches, to ensure that compliance issues are analysed and resolved and that consumers and investors can feel confident in the financial system," it said.
However, it was the depth of detail and associated commentary in ASIC's current enforcement outcomes report which set it apart from earlier publications, with the regulator not only specifying what breaches had occurred and the actions it took, but also its expectations of those involved in the market.
The bottom line, however, was that between 1 January and 30 June, the regulator received 260 ‘notifications of significant breaches' by AFS licensees.
It said that of this figure, planners, advisers and stockbrokers accounted for 143 reports, managed investment schemes for over 50 reports, insurers and insurance brokers for 37 reports, and superannuation trustees and administrators for 30.
ASIC said it had also received a further 16 reports during the period from responsible entities regarding breaches that may have had a material adverse effect on members.
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