ASIC happy that breach reports have tripled
The Australian Securities and Investments Commission (ASIC) has admitted that the changes to the financial services breach reporting regime resulted in a more than tripling of the reports it received.
And the regulator has told Parliamentarians that the increase is welcome because it provides ASIC with better intelligence and data information.
Answering questions on notice resulting from Senate Estimates ASIC confirmed that the number of breach reports it received had risen to 14,034 in 2021-22 up from around 4,000 during the previous full year.
It also noted that the number of breach reports it received increased significantly from 2015 not least because of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry from 2017 to 2019 and after ASIC published its Report 594 dealing with compliance with b reach reporting obligations.
“We welcome increased breach reporting as each report adds to our intelligence and data information, and informs our future compliance and enforcement activity. In addition to increased reports flowing from publicity around the Royal Commission, there was an enhanced focus and understanding of the reporting obligations after the publication of Report 594. On 1 October 2021, the new reportable situations regime started. The new legislation lowered the bar for reporting a breach to ASIC. The law reform has led to a significant increase in notifications to ASIC (14,038 in 2021-22, up from approximately 4,000 the previous full year).”
“Over the period, the number of auditor notifications received also increased. These notifications usually duplicate the information reported to ASIC in a breach report.”
“The increase in the NFA rate for reportable situations (previously breach reports), including auditor notifications, is naturally correlated with the increase in reports received. This is because ASIC must direct its resources to taking regulatory actions where we can achieve the most impact on the issues which pose the greatest risk of harm to consumers and markets, and there is a finite number of actions which we can progress with our resources. We do not seek to act on a fixed proportion of reports that we receive,” ASIC said.
ASIC also said that while the number of formal investigations it had commenced had declined since July, 2015, the number of civil and criminal actions it had commenced had actually increased.
“This reflects an increasing proportion of ASIC’s enforcement resources being dedicated to resource-intensive court-based action during this period. In 2021-22, $229 million in civil penalties were imposed by the courts in relation to cases run by ASIC, convictions were secured against 34 persons and companies and over $2 million in criminal penalties was imposed.”
“These enforcement outcomes are materially higher than similar outcomes achieved in 2015,” it said.
Awesome ASIC, triple the complaints / breach reports that you can do nothing with.
How about the lack of ASIC action on many major complaints like:
1) Dixon’s dodgy MIS’s
2) Storm Financial &
3) Banks Fees for No Service
Each time ASIC had up to 10 years of many many warnings and reports and DID NOTHING until after the train wrecks each time.
How about Reports, Breaches that really matter ASIC ?
And ASIC’s lack of Responses ?
Where the breach reports on ASIC ?
Now that’s a set of breach reports that would be of interest !!!!
Don’t forget the lady without a foot. Time to leave
The corrupt/inept ASIC will use these increased breach reports against FP’s in the future when it suits them to yet again misrepresent figures and un-facts to parliament, the media or general public (typically when pushing for their levy increases).
“FP’s are getting worse, look at the increased breaches we have to deal with, we need more money!”
“We welcome increased breach reporting as each report adds to our intelligence and data information, and informs our future compliance and enforcement activity.
Every time ASIC speak there is an implied contempt towards Financial Planners.
I don’t think its implied – its contempt pure and simple!
“This is because ASIC must direct its resources to taking regulatory actions where we can achieve the most impact on the issues which pose the greatest risk of harm to consumers and markets”
So AFCA complaints for advisers is extremely low (all time lows?) but ASIC want to triple the adviser levy and continue to bill advisers for it. I’m sure there are other segments of financial services that deserve much more scrutiny now. Financial advice should be regulated by a separate industry body not ASIC.
And what is the point of breach reporting some aspects which result in ASIC confirming “We do not seek to act on a fixed proportion of reports that we receive,” ASIC said.”
What is the point of reporting these breaches? It sounds like it’s unnecessary red-tape for some of the things that need to be reported.
Well we increased the number of reports as we had to report a breach. Naughty me.
We were 5 days wrong on a date for on an OSA. We had to lodge a breach, we had await response from compliance to have “corrective actions” confirmed. We redid the OSA. We called the client and explained our egregious error. The breach had to compiled and summarised by our licensee and lodged with ASIC.
The clients’ response was WTF, politely though.
They could not believe the crap we had to go through for an error on a date on a document.
Minimum 5 different people involved, possibly more, for a 5 day date error. Took two weeks.
How much wasted time, how much wasted resources?
I know, lets hold a publicly funded enquiry as to why people can’t get planning advice as it’s too expensive.
What on earth could possibly be causing this issue??
It’s tick a box bureaucratic crap and as Far Canal pointed out, it’s a BS self justification and a money grab by keystone cops that are looking for more brown paper bags.
In the very first 5 months alone of this year Australians lost $88 million to investment scams. I met an elderly client some months ago that was scammed and who had lost her life savings. The response received from ASIC was extremely disappointing. The whole “we will add it to the list” approach and nothing more. No interest, and no care. Seems like to me the Gestapo department (ASIC) are just corrupt. More interested in chasing down Financial Planners that gave out a Fee Disclosure Statement on Monday when it should have been provided on Tuesday.