Industry Compliance Training

In its latest update on Australia’s public and private markets, ASIC has called on industry bodies to lift their standards across Australia’s private credit sector following expert observations on better and poorer practices.

ASIC has made an interim stop order against the RELI Capital Mortgage Fund (Fund), a registered managed investment scheme operated by RELI Capital Limited (RELI Capital) to protect consumers and retail investors from acquiring a product that may not be suitable for their financial objectives, situation or needs.

ASIC’s action follows concerns that the target market in the Target Market Determination (TMD) for the Fund:

• the target market potentially includes investors who intend to hold the Fund as a ‘Core Component’ (25-75%) of their portfolio
• the Fund’s risk level ‘Risk level 3 (Low to Medium)” is an incomplete measure of the Fund’s risk
• the TMD states that the Fund is suitable for investors seeking capital preservation, and
• the TMD specifies that no distribution conditions are necessary for the Fund.

APRA and ASIC hosted a joint Superannuation CEO Roundtable on 27 August 2025, attended by 10 superannuation trustee Chief Executive Officers (CEOs) that manage the majority of superannuation platform products.

ASIC has made interim stop orders against the 12 Month Term Account and 2 Year Account products offered under the La Trobe Australian Credit Fund (Fund), a registered managed investment scheme operated by La Trobe Financial Asset Management Limited (La Trobe) due to deficiencies in the target market determination (TMD) for both products.

ASIC has announced an important step in facilitating growth and innovation in the digital assets and payments sectors.

ASIC has granted class relief for intermediaries engaging in the secondary distribution of a stablecoin issued by an Australian financial services (AFS) licensed issuer.

As and when more issuers of eligible stablecoins obtain an AFS licence, ASIC will consider extending the above relief to intermediaries distributing those stablecoins.

ASIC is committed to supporting responsible innovation in the rapidly evolving digital assets space, while ensuring important consumer protections are in place by having eligible stablecoins issued under an AFS licence.

Australia and New Zealand Banking Group Limited (ANZ) has admitted to engaging in unconscionable conduct in services it provided to the Australian Government, incorrectly reporting its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars and to widespread misconduct across products and services impacting nearly 65,000 customers.

ASIC and ANZ will ask the Federal Court to impose penalties of $240 million in relation to four separate proceedings spanning misconduct across ANZ’s Institutional and Retail divisions.

The misconduct occurred over many years and was marked by ANZ’s significant failure to manage non-financial risk across the bank.

The Reserve Bank of Australia (RBA) has published remarks delivered to FINSIA’s The Regulators event by Assistant Governor, Brad Jones.

Compliance in a complex world

Key points

• ASIC’s latest corporate plan reflects how the agency is adapting to a complex and uncertain world and outlines its five strategic priorities.
• One of those priorities is to support better member services and retirement outcomes and ASIC will continue its work to protect Australians’ retirement savings.
• ASIC’s strategic priority to drive integrity and transparency across Australia’s capital markets includes its work on a roadmap for public and private markets. Expect to hear more from ASIC in the next three months.

The Australian Prudential Regulation Authority (APRA) has published remarks delivered to FINSIA’s The Regulators event by Member Therese McCarthy Hockey.

In short, prepared comments ahead of a panel discussion, Ms McCarthy Hockey spoke about the influence of prudential safety, productivity and proportionality on APRA’s efforts to strike the right regulatory balance.

The Federal Court has delivered judgment in ASIC’s proceedings against Money3 Loans Pty Ltd (Money3), a car finance provider that ASIC alleged breached responsible lending laws when it entered into five loans with borrowers who were largely or solely reliant on Centrelink payments.

The Court found Money3 failed to make reasonable inquiries about or verify each borrower’s living expenses based on bank statement transaction data, and in one instance failed to make reasonable inquiries about a borrower’s requirements and objectives. However, it rejected ASIC’s allegations that the car finance provider failed to assess whether the loan contracts were unsuitable for borrowers and entered them into unsuitable loans.

The Court also rejected ASIC’s claims that Money3 failed to take reasonable steps to ensure its representatives complied with credit legislation or that its representatives were not adequately trained and competent.

ASIC Chair Joe Longo said, ‘ASIC took this case after receiving numerous complaints, including from consumer advocates. We were concerned that consumers on social security payments were entering into potentially unsuitable loans. We are currently considering the judgment.

‘Responsible lending laws exist to ensure that credit providers do not enter consumers into loans that will cause them detriment in the long run. These laws are an important part of Australia’s consumer protection framework. Even though we may not ultimately be successful in every case we run, it is important ASIC take action to enforce the law where it is concerned a breach has occurred.’

ASIC and APRA have published notes from two Superannuation CEO Roundtables held on 23 and 30 July 2025.

The roundtables were attended by 16 superannuation CEO representatives from a broad cross-section of the industry.

The themes for discussion were governance and risk oversight, and expenditure practices.

TerraCom Limited (TerraCom) will pay a penalty of $7.5 million for whistleblower victimisation, following Federal Court proceedings brought by ASIC. This is ASIC’s first enforcement outcome for contraventions of whistleblower provisions.

ASIC’s case concerned two ASX announcements made by TerraCom on 14 February 2020 and 3 April 2020, and an open letter it published to shareholders in the Australian Financial Review and The Australian on 12 March 2020. The announcements and open letter stated that allegations made by the whistleblower were false, and that TerraCom had the conduct of its employees independently investigated.

ASIC is consulting on proposed changes to modernise market integrity rules (MIRs) governing market participants’ trading systems and automated trading. The proposed changes aim to keep pace with continued developments in technology, including artificial intelligence (AI).

They also aim to:

• streamline and reduce complexity by applying consistent rules to any trading systems used by participants, irrespective of how orders are generated or submitted, and
• harmonise trading system rules and safeguards across the securities and futures markets and align our rules framework with the International Organisation of Securities Commission principles and international best practice on algorithmic trading.

The Australian Prudential Regulation Authority (APRA) has published its latest Corporate Plan aimed at preserving the safety and stability of banks, insurers, superannuation trustees and the broader financial system.

The plan outlines APRA’s strategic priorities over the next four years as well as its policy, supervision and data priorities for the coming 12 to 18 months.

The 2025-26 Corporate Plan has been built on four key strategic objectives: maintaining financial and operational resilience; responding to significant and emerging risks; getting the regulatory balance right; and improving APRA’s organisational effectiveness.

ASIC is repeating its warning to Australians to make informed investment decisions after new data revealed a sharp rise in the number of complaints affecting retail investors.

Newly released figures highlight ASIC received 7,561 reports of misconduct from 1 January 2025 to 30 June 2025, raising 11,060 issues. Of this, 5,909 reported issues fell into the financial services and retail investor category, which includes credit issues, license obligations, and other conduct related to advice, insurance, and misleading and deceptive or unconscionable behaviour.

High levels of non-compliance by previously grandfathered companies to lodge their financial reports has prompted ASIC to increase its intensity of reviews and launch a broader crackdown.

‘Financial reports provide shareholders, creditors and the public with important information to enable them to make informed decisions when dealing with these companies,’ said ASIC Commissioner Kate O’Rourke.

‘Companies should be lodging their financial reports in a timely manner. Regular and consistent reporting instils confidence and integrity in our financial system.’

In 2022, the financial report lodgement exemption for grandfathered companies was removed. Since then, previously grandfathered companies that remain large proprietary companies have been required to lodge their financial reports with ASIC.

ASIC is calling on life insurance companies to step up their product, sales, and complaints handling practices as they look to expand direct sales to customers.

In a detailed letter to industry outlining concerns and urging action following a review of direct sales practices, ASIC Commissioner Alan Kirkland listed four key recommendations to improve compliance and benefit consumers.

These included strengthening product design, improving sales practices and treating complaints as valuable business intelligence to help improve customer experiences.

One of Australia’s largest superannuation funds failed to tell ASIC about investigations into serious member services issues, including incorrect insurance premium refunds for dead members, the regulator alleges in new proceedings launched today in the Federal Court.

ASIC alleges that between October 2021 and September 2024, Mercer Super had inadequate systems in place to comply with the reportable situations regime, which requires Australian financial services licensees to promptly report ongoing investigations into significant breaches of their core obligations.

The Federal Court has ordered National Australia Bank (NAB) and its subsidiary, AFSH Nominees Pty Ltd (AFSH), to pay a pecuniary penalty of $15.5 million for failing to respond to customers facing hardship.

The Court found that between 2018 and 2023, NAB and AFSH failed to respond to 345 hardship applications within the 21-day timeframe required by law. As a result, those consumers remained unaware of the outcome of their hardship applications.

ASIC Deputy Chair Sarah Court said, ‘This decision highlights the seriousness of the failures of NAB and AFSH to support their customers experiencing financial hardship.

‘These failures likely made an already challenging time in people’s lives far worse.

‘This penalty sends an important message to other financial institutions – customers should be at the centre of what you do.’

The Australian Prudential Regulation Authority (APRA) will make changes to its banking framework to increase proportionality and reduce regulatory burden as part of the Council of Financial Regulators’ (CFR) Review into Small and Medium-sized Banks.

The findings and recommendations of the Review, undertaken by the CFR and the Australian Competition and Consumer Commission, were released by the Treasurer.

As noted in the Treasurer’s media release, the government welcomed all nine actions from regulators and has accepted in-principle eight of the recommendations from the review. Government will seek feedback on the final recommendation from the review, which would involve APRA introducing a lighter touch framework for very small banks, accompanied by adjustments to the Financial Claims Scheme. APRA looks forward to engaging with Government and industry on this.