In this Funds Update for 15 November 2024:
- ASIC releases insights from the reportable situations regime
- Penalty unit increased from $313 to $330
- Consultation on draft sustainability reporting regime guidance
- Information Sheet 290 - resignation and removal of auditors of AFSL holders
- Reminder that breach reports must not be false or misleading
- ASIC announces new enforcement priorities for 2025
ASIC releases insights from the reportable situations regime
On 31 October 2024, ASIC released its third publication on Insights into the reportable situations regime: July 2023 to June 2024 (Report) available here. The Report noted that:
- 38% of reports related to false or misleading statements (a decrease of 6 percentage points compared to the previous reporting period, however it remained the most common category of report);
- 60% of reports specified a root cause of staff negligence and/or error (a decrease of 8 percentage points compared to the previous reporting period); and
- staff training on internal policy and procedures continued to be the most common method selected by licensees to rectify a breach (41%).
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Penalty unit increased from $313 to $330
On and from 7 November 2024, the value of a penalty unit as prescribed under the Crimes Act 1914 (Cth) was increased from $313 to $330. Information regarding ASIC’s fines and penalties be found here.
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Consultation on draft sustainability reporting regime guidance
On 7 November 2024, ASIC issued a consultation paper (CP 380) and released a draft Regulatory Guide in relation to sustainability reporting (Draft RG). The Draft RG includes guidance on:
- who must prepare a sustainability report (including responsible entities of registered managed investment schemes who meet an assets under management threshold);
- how the regime will interact with existing legal obligations;
- how ASIC will administer the sustainability reporting requirements;
- ASIC’s approach to granting relief from the regime and use of its new directions power; and
- specific issues in relation to the contents of the sustainability report and sustainability-related financial disclosures outside the sustainability report.
This release follows the introduction of the sustainability reporting bill into parliament (see previous funds update here). Comments on CP 380 close on 19 December 2024.
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Information Sheet 290 - resignation and removal of auditors of AFSL holders
On 24 October 2024, ASIC released Information Sheet 290 (INFO 290) in respect of the resignation and removal of auditors of Australian financial services licensees (AFSL holders). INFO 290 formalises ASIC’s guidance previously included on its website.
INFO 290 provides guidance on:
- how and when to lodge an application to resign as an auditor;
- when ASIC will consent to an auditor’s resignation or removal;
- the procedure following the application for consent;
- when consent is not required; and
- notification of auditor appointments.
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Reminder that breach reports must not be false or misleading
On 12 November 2024, ASIC released a media release in relation to proceedings commenced against an AFSL holder in relation to, amongst other things, an alleged breach of section 1308(5) Corporations Act for failing to take reasonable steps to ensure that a reportable situation report lodged with ASIC was not false or misleading in a material particular.
This serves as a reminder to AFSL holders, when preparing a reportable situation report, to carefully check the report to ensure it is not misleading, including by omission.
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ASIC announces new enforcement priorities for 2025
On 14 November 2024, ASIC announced its enforcement priorities for 2025. Amongst the broader list of 2025 enforcement priorities, those that are relevant to the investment funds space include:
- licensee failures to have adequate cyber-security protections; and
- greenwashing and misleading conduct involving ESG claims.
ASIC's annual enforcement priorities reflect emerging issues and risks that agency prioritises to detect, investigate and prosecute unlawful conduct affecting consumers, businesses and the economy.
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Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.