Australia

ASIC has extended the relief for business introduction services for registered managed investment schemes until 1 April 2025. The relief was due to expire on 1 October 2022. ASIC considers that the relief remains useful for registered managed investment schemes with fewer than 20 members seeking to raise up to $5 million. The extended relief clarifies that the design and distribution obligations (DDO) apply to persons who, but for the relief, would otherwise need to comply with the DDO. ASIC has decided not to extend the same relief to business introduction services for companies on the basis that the crowd-sourced funding regime...

ASIC has signed a Consultation Agreement (Agreement) with the Financial Markets Standards Board (FMSB) to promote global standards for fair and effective wholesale financial markets. The Agreement formalises ASIC’s active interest in the development of global industry standards.   ASIC Chair Joseph Longo said, ‘ASIC welcomes the Agreement between ASIC and the FMSB. This Agreement will help us engage with the FMSB to promote good wholesale market practices.’  ‘ASIC is committed to ensuring Australia’s financial markets are fair and efficient, and those who provide financial services demonstrate fairness, honesty and professionalism,’ concluded Mr Longo.  Fixed income, currencies and commodities (FICC) markets underpin...

The Federal Court has dismissed proceedings brought by ASIC alleging breaches of conflicted remuneration laws, finding Colonial First State Investments Limited (Colonial) did not breach the law when it agreed to pay the Commonwealth Bank of Australia (CBA) to distribute Essential Super. The arrangements between Colonial and CBA regarding the distribution of Essential Super was the subject of a case study by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The conduct was referred to ASIC in the Final Report (Volume 2 - Part 2, p.99). Justice Anderson found that the payments made by Colonial to...

ASIC has made an interim stop order preventing Australasian Property Investments Limited (APIL) from offering or distributing the APIL Essential Retail Income Fund (the Fund) to retail investors because of a non-compliant target market determination (TMD). The interim order stops APIL from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investment in the Fund. The order is valid for 21 days unless revoked earlier. ASIC made the interim stop order to protect retail investors from potentially investing in a fund that may not be suitable for their financial objectives, situation or needs. The...

ASIC has commenced proceedings in the Federal Court against Nuix Limited (ASX:NXL) for alleged continuous disclosure breaches and misleading or deceptive conduct. ASIC has also brought proceedings against members of the Nuix board for breaches of their directors’ duties. ASIC alleges that Nuix made misleading or deceptive statements when reaffirming its Prospectus financial year 2021 forecasts for statutory revenue and for annualised contract value (ACV) in announcements to the ASX on 26 February 2021 and 8 March 2021. ASIC alleges that at the time of these announcements, Nuix was aware that ACV for financial year 2021 was likely to be materially...

In response to requests from stakeholders, ASIC has today released a consultation paper proposing to provide relief in relation to the employee share scheme (ESS) regime in Part 7.12 of the Corporations Act. The ESS regime takes effect on 1 October 2022.    The relief seeks to remove some unintended technical issues that may make it hard for some entities to rely on the regime. In particular, we understand that listed entities may find it difficult to make ESS offers if employees are unable to sell financial products that are in a class that is quoted. Consultation Paper 364 Modifications to the ESS regime...

ASIC has granted relief to exempt insurers from providing certain notifications where doing so creates risks of family violence. The relief is outlined in the legislative instrument, ASIC Corporations (Cash Settlement Fact Sheet and Confirming Transactions) Instrument 2022/809. Since 1 January 2022, insurers have been required to provide a Cash Settlement Fact Sheet (CSFS) and transaction confirmation to joint policyholders when they offer to settle a claim by a cash payment. The ASIC relief seeks to reduce the risk of family violence occurring as a result of insurers providing these notifications to joint policyholders. These notifications may contain information that could...

Over the past six years ASIC has overseen at least $5.6 billion in remediation for an estimated seven million Australian consumers for failures identified across the financial system. Around a further $1.6 billion is yet to be paid to an estimated 2.7 million consumers in remediations ASIC is currently monitoring. To help financial firms remediate their customers quickly and effectively, ASIC has today published updated and expanded regulatory guidance. ASIC Deputy Chair Karen Chester said, ‘Our guidance puts the onus on industry to get on with fair and timely remediations – returning the money they owe to wronged consumers.’ Regulatory Guide 277...

Following inquiries by ASIC, Epsilon Healthcare Limited (Epsilon) and HSC Technology Group Limited (HSC) have made amendments to the financial report, and operating and financial review (OFR), (respectively) for the half-year ended 30 June 2022. Epsilon wrote down the value of goodwill and plant and equipment in its medicinal cannabis business by $6,082,936 in its financial report for the half-year ended 30 June 2022. Following a review of Epsilon’s financial report for the year ended 31 December 2021, ASIC had raised concerns relating to the carrying value of the goodwill, and the free cash flow projections used in its impairment model. Separately, HSC...

Five companies that are or were part of the AMP Limited group (together ‘AMP’) have been ordered by the Federal Court to pay a total $14.5 million in penalties for charging fees for services that were not provided to 1,452 superannuation members. These members had been paying fees in return for access to general financial advice as part of an agreement between their employer and AMP. On leaving their employer, the members continued to be automatically charged the advice fee, despite no longer having access to the advice services for which they were being charged. ASIC Deputy Chair Sarah Court said,...

On 16 September 2022, former financial adviser John Wertheimer, formerly of Canning Vale, Western Australia, pleaded guilty in the Perth Magistrates Court to one charge of providing a financial service on behalf of a person who carries on a financial services business while unauthorised to do so. Mr Wertheimer also pleaded guilty to one charge of engaging in dishonest conduct in relation to a financial service. Mr Wertheimer was a financial adviser under his own company, John Wertheimer & Associates Pty Ltd, before appointing Picture Wealth Advisory Pty Ltd to service a group of clients to provide licenced financial advisory services. Between...

The Federal Court has imposed a $7.2 million penalty on Dixon Advisory and Superannuation Services Limited (Dixon Advisory) after six representatives failed to act in their clients’ best interests and failed to provide advice appropriate to their clients’ circumstances. ASIC Deputy Chair Sarah Court said ‘Licensees need to ensure their representatives are taking into account their clients’ specific needs and circumstances. Advice that fails to reflect client circumstances − or advice models that lead to one-size-fits-all outcomes – are less likely to meet best interest duty obligations and can expose clients to a risk of capital loss.’ The Court found that...