Risk and Compliance

ASIC has permanently banned the former responsible manager of Brite Advisors Pty Ltd, Mr Gerard Duffy, from providing financial services, after a finding that ASIC has reason to believe that Mr Duffy is not a fit and proper person.

View the full media release.

Good morning,

This is my first time before a parliamentary committee since taking the role of ASIC Chair on Monday. I want to thank and acknowledge my predecessor, Joe Longo, for his stewardship of ASIC over the last five years. Joe made a significant and lasting contribution to ASIC and our work in serving Australian consumers, investors and markets.

I am joined by Commissioners Alan Kirkland, Kate O’Rourke and Simone Constant, CEO Scott Gregson and Executive Director for Regulation and Supervision, Peter Soros.

ASIC has done a range of important work in recent times. We have strengthened our enforcement stance and taken decisive action against serious misconduct, obtaining record penalties and record sentences, while also advancing key regulatory priorities and helping ensure banks return record amounts to vulnerable Australians.

We drove the landmark ASX inquiry, have significantly contributed to the thinking about public and private markets, and made significant progress with regulatory simplification, highlighting ASIC’s role in helping to enhance productivity and support economic growth.

I look forward to building on this work in the coming years.

Given this is a Budget Estimates hearing I want to give a brief update to the committee on a range of matters, including initiatives funded in last month’s federal Budget. This funding goes to core areas critical to ensuring we continue to engage with everyday Australians while delivering on the key requirements of ASIC.

First, the Government is investing to complete Tranche 2 of the RegistryConnect program to stabilise and uplift ASIC’s business registers. This builds on previous funding and will help us improve online services for company registrations, lodgements, annual reviews, and other transactions, link Director IDs to company records, upgrade registry systems, and implement new functions for company deregistration powers. These registers support millions of everyday decisions including extending credit, verifying a company, entering commercial arrangements or assessing risk.

Second, the Government is investing to strengthen oversight of managed investment schemes. This measure invests in ASIC’s digital capability, improving our tools to access existing non-ASIC government data and enhance supervision of this sector.

While we believe there is no ‘silver bullet’ to these complex issues, better access to data will help us respond to existing and emerging threats, including those highlighted by the First Guardian and Shield matters.

The Government has also committed to funding to improve governance arrangements for registered managed investment schemes and enhance ASIC’s supervision of the sector. 

Third, with respect to the First Guardian and Shield matters that we have discussed with the Committee previously, we have continued a range of intensive work with a view to returning money to investors who have lost funds. We are running an extensive communications campaign to ensure that people are alerted to the issues and encouraging AFCA notifications. We currently have 14 proceedings in the Federal Court against 26 defendants relating to these issues. This includes recent action against Equity Trustees for allegedly failing to meet its trustee obligations and not act in members’ best financial interests when onboarding the First Guardian master fund.

This is the second action we have taken against Equity Trustees and the fifth against a super trustee as part of our investigations. It means that ASIC has now commenced proceedings against every super trustee that made Shield or First Guardian available on its platform. This work to date has resulted in the return to investors of more than $400m.

Fourth, this Committee is often interested in ASIC’s criminal work. We have recently seen significant custodial sentences imposed in a number of matters, including the sentence of Anthony Torre to six years in prison for fraud involving the misappropriation of superannuation funds; Remedy Housing officials sentenced for lengthy prison terms for dishonest offences and the misappropriation of customer funds; and Rodney Forrest, sentenced to 5 years and 3 months for insider trading and procuring others to trade in more than $3m of Platinum Asset Management Limited shares. This was the first outcome for our new specialist insider trading team which investigated and finalised the case within 16 months of the offending.

Finally, ASIC has commenced a preliminary investigation into allegations about the conduct of several registered company auditors at KPMG that came to light after whistleblower claims were first aired in the Parliament. Our focus is to determine whether the conduct sanctioned by KPMG may be a breach of the duties of a registered company auditor and whether each of the registered company auditors have maintained their fitness and propriety in accordance with the Corporations Act.

We look forward to taking your questions.

The Australian Prudential Regulation Authority (APRA) has published Chair John Lonsdale’s Opening Statement to the Senate Economics Legislation Committee.

A copy of Mr Lonsdale’s statement is available at: Opening Statement to Senate Economics Legislation Committee – June 2026.

Treasury Secretary Jenny Wilkinson told the Senate Economics Legislation Committee that the ongoing Middle East conflict is creating significant inflationary and growth risks for the global and Australian economies through disruptions to energy supply chains. While Australia’s economy grew by 2.5% over the year to March 2026, Treasury expects growth to slow in 2026-27 as higher fuel costs and broader inflationary pressures weigh on households and businesses. Treasury is closely monitoring the impact on inflation, employment and business conditions, with inflation forecast to peak at around 5% in the June quarter before moderating as supply disruptions ease.

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The Australian Prudential Regulation Authority (APRA) has finalised a new, more accessible pathway for banks to become accredited to use the internal ratings-based (IRB) approach to calculate credit risk-weighted assets.

The new pathway has the potential to boost competition while still supporting financial safety by incentivising banks to invest in advanced risk management capabilities. The IRB approach allows banks to better match capital to their actual risk, which can reduce their capital requirements and enable more competitive pricing.

The IRB method is one of two approaches banks can use to calculate risk-weighted assets, which determines the amount of regulatory capital they need to hold for credit risk. While the vast majority of banks use the standardised approach, APRA has approved six of the largest banks to use the IRB approach.¹

In a letter to industry published today, APRA confirmed its intention to proceed with plans to make IRB accreditation more attainable for medium-sized banks by making the process more flexible and transparent.

The changes deliver on APRA’s commitment to review and streamline the IRB accreditation process in response to Action 2 of the Council of Financial Regulators’ Review of Small and Medium-sized Banks.

The letter, which includes APRA’s response to submissions, is available at: A new pathway to internal ratings-based accreditation | APRA

Footnotes

¹ Banks accredited to use the IRB approach are the four major banks, Macquarie Bank and ING Bank Australia.

ASIC has updated its Internal Dispute Resolution (IDR) data dashboard to include complaints open, received or closed between 1 July and 31 December 2025, reflecting the most recent data reported by financial firms.

The update also introduces a new complainant demographics page, allowing users to explore complaint trends by age group, gender and location. Complainant demographic data is not shown at the firm-level.

In addition, a downloadable data file is now available, enabling users to extract and analyse selected complaint metrics for reporting and research. This allows users to benchmark performance against industry and identify trends across reporting periods, products, issues and outcomes.

These enhancements aim to improve the transparency, accessibility and usability of IDR data, supporting ASIC’s objective to strengthen accountability and drive improved complaint handling across the financial system.

Further information is available from ASIC’s IDR data reporting page.

Interactive dashboard

Internal Dispute Resolution data dashboard

The Australian Prudential Regulation Authority (APRA) has released a letter to Minimum Liquidity Holding authorised deposit-taking institutions on the liquidity treatment of deposits placed with settlement service providers (SSPs).

This letter responds to feedback and finalises the FAQ relating to the treatment of deposits placed with SSPs.

The letter to industry is available on the APRA website at: Finalisation of FAQ on treatment of deposits placed with settlement service providers

The Australian Financial Complaints Authority (AFCA) is opening public consultation on proposed amendments to the rules that govern its work, following changes to genetic testing protections in life insurance.

The consultation, running from 1 June to 26 June, follows a recent legislative change which introduced a ban on life insurers soliciting or using protected genetic information (namely adverse genetic testing results) when offering life insurance.

“These proposed amendments will ensure we can consider complaints about the use of genetic testing in life insurance in line with the new protections for consumers. This will enable AFCA’s Rules to keep pace with changes in the law,” said Michelle Kumarich, Executive General Manager Jurisdiction and Systemic Issues.

AFCA is proposing changes to Rule C.1.4b) and d) to enable it to consider complaints specifically about the use of adverse genetic testing results.

Subject to consultation and regulatory approval, these amendments are expected to take effect from 8 October 2026.

“Engaging with stakeholders through this consultation is essential to ensuring our Rules continue to meet the needs of consumers and financial firms. We encourage all stakeholders, particularly our life insurance members, to have their say during the consultation.”

The Consultation page on the AFCA website provides more information on how to submit a response.

The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on HTFS Nominees Pty Limited (HTFS) to address prudential concerns relating to its investment governance and member outcome frameworks and practices, including oversight of platform investment options made available to super fund members.

HTFS acts as trustee for HUB24 Super Fund which has approximately 165,000 member accounts and over $55 billion in funds under management.

The imposition of additional licence conditions follows APRA’s thematic review of the investment governance, strategic planning and member outcomes practices of superannuation trustees that offer platforms (‘Platform Trustees’). Broadly, the review identified deficiencies in HTFS’s onboarding processes and practices for new investment options, investment option monitoring and reporting, management of conflicts of interest and approach to member outcomes.

Specifically, APRA’s review of HTFS identified concerns in relation to:

• lack of sufficiently rigorous, well-defined and consistently applied investment option selection criteria;
• quality of operational and investment due diligence undertaken for new investment options, including insufficient consideration and management of conflicts of interest and poor documentation;
• design and operational effectiveness of investment option monitoring and reporting frameworks in identifying and responding to performance and risk concerns;
• management of potential conflicts of interest, particularly where key decision-makers hold senior leadership positions within the parent or group, and governance arrangements lack an independent trustee voice; and
• assessment and oversight of member outcomes, including the implementation of controls to minimise potential harm to previously advised members.

Under the additional licence conditions, effective 29 May 2026, HTFS is required to:

• appoint an independent expert to undertake separate reviews of its platform investment menus and frameworks governing investment governance, conflicts management, strategic objectives and member outcomes;
• develop and implement an uplift plan to address identified gaps, and provide APRA with assurance that remediation actions are complete and operating effectively to address those gaps; and
• undertake a further review of its investment menu against the enhanced investment governance requirements to determine ongoing suitability of each investment option.

HTFS must also refrain from onboarding certain new high-risk investment options to its platform until an independent expert confirms the option has gone through an adequate onboarding process and an accountable person attests that all reasonable steps were taken to ensure the option is in members’ best financial interests.

APRA notes HUB24 Limited’s ASX announcement dated 21 April 2026 that it has exercised its option to acquire HTFS from EQT Holdings, subject to regulatory approvals. The licence conditions will apply notwithstanding any change of ownership to HUB24 Limited, which may implement new investment governance and oversight practices for HTFS.

APRA Chair John Lonsdale said: “This is the fifth Platform Trustee that APRA has taken enforcement action against and reflects APRA’s sustained focus on addressing prudential weaknesses identified through our review of Platform Trustees.

“Alongside enforcement action, APRA is closely supervising other in-scope Platform Trustees where improvement is necessary. APRA will continue to oversee the delivery of required actions and will hold trustees to account where they fail to make timely and sustainable improvements to investment governance and member outcomes.

“As part of this ongoing focus, we will also consider whether further enhancements to the relevant prudential standards and guidance are necessary.”

The Australian Prudential Regulation Authority (APRA) will keep its macroprudential policy settings steady following its latest review of domestic and international financial conditions and risks.

APRA’s macroprudential policy tools are aimed at mitigating financial stability risks at a system-wide level to promote a safe and stable financial system that enables households and businesses to confidently borrow, save and invest for the future.

APRA has today confirmed that:

• the mortgage serviceability buffer will remain at 3 percentage points;
• the countercyclical capital buffer will remain at 1 per cent of risk-weighted assets; and,
• high debt-to-income (DTI) lending limits remain unchanged, allowing banks to lend up to 20 per cent of new owner-occupied and investment loans at DTI greater than or equal to six times.

In deciding to keep its settings steady, APRA considered the high degree of uncertainty in the operating environment and the impact that the shift in the economic outlook is having on risks to financial stability.

In particular, APRA noted:

• households remain highly indebted. Housing credit growth for the March quarter was strong for investors and around average for owner-occupiers. However, there are signs of moderation in housing price and credit growth. Business credit growth remains above its historical average;
• pressure on household and business cashflows have increased due to higher inflation and interest rates but non-performing loans remain low. Strong buffers mean that most households and businesses are well placed to weather these pressures. The serviceability buffer helps ensure that recent new borrowers can continue to service their loans in the face of higher expenses and interest rates;
• higher risk forms of mortgage lending are contained and lending standards are sound. Based on preliminary March quarter data, high DTI lending remains well below APRA’s DTI limits and so the limits are not restricting overall bank lending. However, this type of riskier lending had been increasing over the past year and – given the uncertainty in the outlook – it is prudent for the limits to remain in place as guardrails for now; and
• the banking system remains well-capitalised and resilient and is well-positioned to absorb shocks should economic conditions deteriorate significantly.

APRA Chair John Lonsdale said that while existing settings remain appropriate for now, the risk landscape is volatile and could evolve rapidly.

“Since APRA’s last update, there has been a shift in the macroeconomic outlook. Interest rates have increased over recent months amid elevated inflation. The conflict in the Middle East is impacting economic and financial conditions in Australia, as higher oil prices add to cost pressures for households and businesses.

“Consumer sentiment and business confidence have weakened and downside risks to economic growth are heightened. Depending on global developments, these impacts could either ease or become more severe in the period ahead.

“At this stage, arrears and non-performing loans remain low and there is no evidence that the banking system is restricting credit supply to preserve capital positions in response to greater anticipated credit losses.

“APRA’s System Risk Outlook, released last week, highlighted that Australia’s financial system is resilient and well-positioned to support our economy in a potential downturn. APRA will remain alert for any early signs of risks materialising that could negatively impact financial stability and will adjust macroprudential settings if needed,” Mr Lonsdale said.

The Australian Prudential Regulation Authority (APRA) has confirmed plans to formally introduce a three-tiered approach to proportionality in its prudential framework for banking.

The measure is one of a number of reforms APRA moved to introduce as part of its response to the Council of Financial Regulators’ Review into Small and Medium-Sized Banks. The CFR review was undertaken in consultation with the Australian Competition and Consumer Commission (ACCC). It also aligns with APRA’s strategic commitment to get the balance right between its primary mandate for financial safety and stability and other considerations such as competition and efficiency.

Following a consultation that closed earlier this year, APRA today wrote to banks confirming it will proceed with the following proposals aimed at embedding additional proportionality and driving competition in the industry:

• Introducing a third tier of Most Significant Financial Institutions (MSFIs) for banks with total assets greater than $300 billion
• Raising the asset value threshold for banks to qualify as a Significant Financial Institution (SFI) from $20 billion to $30 billion; and
• Automatically providing a 12-month transition period when a regulated institution moves to a higher tier.

APRA also commits to providing non-SFIs with additional time to comply with new and revised prudential requirements when it is appropriate to do so.

APRA Executive Board Member, Therese McCarthy Hockey said: “Today’s changes reflect APRA’s ongoing commitment to building further proportionality into the banking framework and our supervision practices.

“This proportionality will only deepen over time as we look for more opportunities for greater differentiation between each of the banking tiers with each new piece of policy development.”

The changes take effect from 1 July 2026.

The letter formally responding to submissions to the consultation is available on the APRA website at: Formalising a three-tiered approach to proportionality in banking prudential framework