Regulatory news

The times they are a-changin’– but directors’ duties aren’t

Key points

• Don’t get distracted – directors’ obligations have not changed.
• Addressing regulatory complexity, increasing technical expertise on boards, more effective reporting from senior management – are changes that can help address some of the challenges facing directors.
• What hasn’t changed – and won’t change – are the foundational duties and expectations of directors. Directors must still act in good faith, in the best interests of the company, for a proper purpose and with due care and diligence.

ASIC is suing AustralianSuper Pty Ltd, the trustee of Australia’s largest superannuation fund, over delayed processing of nearly 7,000 death benefit claims, according to proceedings filed in the Federal Court.

The Australian Prudential Regulation Authority (APRA) has released eight proposals to strengthen its prudential governance framework for banks, insurers and superannuation trustees.

This represents the first significant update to APRA’s governance standards for more than a decade.

The proposals will ensure that APRA’s governance standards reflect contemporary best practice and establish clear benchmarks for regulated entities. The proposals address current areas of poor practice and will help ensure that all regulated entities are governed by leaders with the skills, experience and character needed for today’s complex risk environment.

Opening statement by ASIC Chair Joe Longo at the Senate Economics Legislation Committee, 2024-2025 Additional Budget Estimates.

ASIC has announced its preliminary views on the opportunities and risks emerging from shifts in public and private capital markets and called for feedback and debate on key questions as part of a discussion paper launch.

Commenting on Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets, ASIC Chair Joe Longo said ASIC’s present data and information gathering powers were inefficient and incomplete, making it difficult to determine whether the current downturn in Australian IPOs and public companies and uptick in private credit were cyclical or a sign of structural changes in Australia’s financial markets warranting regulator intervention.

Feedback on the discussion paper questions is due by 5pm on 28 April 2025.

AUSTRAC recently took action against 13 remittance and digital currency exchange providers with more than 50 others still in its sights.

The anti-money laundering regulator is wrapping up a year-long blitz to target non-reporting and under reporting, issuing another round of alerts to the industry’s potentially non-compliant operators.

AUSTRAC CEO Brendan Thomas said alerts are a precursor to potential regulatory action and identify AUSTRAC’s concerns that operators may not be reporting suspicious matters and transactions to AUSTRAC.

The Australian Prudential Regulation Authority has published remarks delivered by Deputy Chair Margaret Cole to the Conexus Chair Forum.

In her remarks, Ms Cole discusses the importance of strong board governance in super in areas including fund expenditure, investment and operational risk management. Ms Cole also flags APRA’s upcoming engagement with all APRA-regulated industries on a review to update core prudential governance standards.

Her comments included:

• “Funds with robust governance put themselves in a much stronger position to develop effective strategies and respond to challenges. Challenges include reputational risk.”
• “Take the politics out of this. This is a system to be proud of. That pride can’t be allowed to foster complacency or a blind eye to practices that have no place in today’s financial services giants. APRA is not attacking any particular board model but we do take issue with some practices. And frankly so should you.”
• “As Chairs you set the tone from the top in your organisations. You oversee the creation of policy and processes around expenditure. You have oversight of how your businesses are run, including how the executive spend and invest members’ money. Decisions made here have direct implications for members. Your role is critical.”

Small businesses employ approximately half of the private sector workforce and contribute more than $500 billion to the Australian economy each year. They are essential for Australia’s prosperity.

ASIC assists small businesses by providing the information they need to operate lawfully, and by taking enforcement action against directors or companies when the law has been contravened.

In the period 1 October to 31 December 2024 enforcement action was taken by ASIC against:

• four company directors through disqualification – two for the maximum five years
• one director charged for making misleading statements to ASIC
• one director sentenced for making false statements to ASIC, and
• 58 individuals for 107 offences in failing to assist registered liquidators following the collapse of their companies.

ASIC has written to superannuation trustees urging them to strengthen anti-scam practices, or risk exposing members to harm.

The open letter, signed by ASIC Commissioner Simone Constant, outlines our guidance for superannuation trustees in preventing, detecting and responding to scams and fraud activity.

Superannuation trustees have a key role to play in minimising the risk of scam and fraud risks to members, given they are the custodians of the second largest asset for many Australians.

ASIC has appointed Scott Gregson as Chief Executive Officer.

Mr Gregson will join ASIC on 17 March 2025 following a nearly 30 year career with the ACCC and takes over from ASIC’s retiring interim CEO Greg Yanco.

ASIC Chair Joe Longo said Mr Gregson had stood out in an executive search of domestic and international candidates.

‘Scott is an impressive leader and will bring extensive experience to this important role at ASIC,’ Mr Longo said.

‘His commitment to achieving regulatory outcomes that benefit all Australians makes him a strong addition to support ASIC’s commission and head the agency’s executive leadership team.’