With the end of the year fast approaching, ASIC has announced its enforcement priorities for 2024. While ASIC’s enduring priorities of market integrity, protecting financially vulnerable consumers, investigating misconduct impacting first nations people, investigating and preventing systemic failures and new or emerging conduct risks within the financial system continues to persist into 2024, some new, enduring and 2024-specific priorities have also been flagged.
Building on its work in 2023, ASIC will continue its enforcement action targeting poor distribution of financial products and misleading conduct in relation to sustainable finance (ie greenwashing), however, it has dropped the priority of investigating misconduct involving high risk products including crypto assets in favour of other priorities including predatory lending and the super sector compliance. In fact, ASIC’s super sector enforcement actions have already commenced ahead of 2024, with a strong focus on the best interests of members in the super sector and taking action against super funds where there is a failure to protect the super of members. ASIC notes that the failure to merge duplicate super accounts is a widespread problem across the superannuation sector, and expects to take further action in that space.
Insurance claims handling, compliance with financial hardship obligations and the reportable situations regime have also been identified as new enforcement priorities for 2024. Again, ASIC has already started its enforcement action in relation to some of these priorities, with a recent ASIC enforcement and regulatory update for July to September highlighting court action against large financial institutions for conduct ranging from alleged failures to address financial hardship notices to misleading customers in relation to credit card accounts.
In addition to financial institutions, 2024 will also see ASIC focus on misconduct relating to used car financing to vulnerable consumers which will target brokers, car dealers and finance companies, to name a few. It will also be targeting gatekeepers such as auditors, registered liquidators, and financial services and credit licensees that do not comply with legal obligations where appropriate.
As financial markets continue to become increasingly digitised and automated, the technical and operational risks faced by market participants and market operators have also increased. Thus, a new priority related to technology and operational resilience for market operators and participants in order to maintain market integrity has been announced for the 2024 year by ASIC.
Small businesses also rate a mention with conduct impacting small businesses including small business creditors making it on the list of 2024 priorities. The priority of investigating and preventing governance and directors’ duties failures which previously focused on property schemes that expose investors to significant loss in 2023 has been broadened to include all failures for 2024 and has been elevated to an enduring priority instead of a yearly priority.
In the words of ASIC Deputy Chair, Sarah Court, the regulator is taking matters to court and pursuing higher penalties than ever before, and it is also not deterred from taking challenging cases where legal outcomes are not guaranteed. It will also continue to test the scope of enacted laws that protect market integrity, consumers and investors to ensure the laws have a wide protective application.
Speak to one of our accountants if you have any questions about the changes in tax for 2023.