ASIC Amendments: ASIC Corporations and Credit (Amendment) Instrument 2023/589

What is ASIC?

The Australian Securities and Investments Commission (ASIC) is an independent Australian Government body that was established under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and operate under the Corporations Act 2001 (Cth) (the Corps Act). Its role is to regulate the conduct of Australian companies, financial markets, financial services organisations and professionals involved in the consumer credit field. This article will concern its role of improving the performance of the financial system and regulating the law efficiently with minimal procedural requirements.

 

Changes to the Regulatory Scheme

Under the ASIC Corporations and Credit (Amendment) Instrument 2023/589, (the Instrument) ASIC have modified the licensees’ obligations under the reportable situations regime, effective from 20 October 2023. These amendments have significantly impacted the obligations of licensees with specific changes in reporting requirements and the time period for reporting.

Amendment 1: Changes in Reporting Requirements

Prior to the amendment, Australian financial services and Australian credit licensees were required to automatically submit notifications to ASIC about ‘significant’ breaches of ‘core obligations.’ The Instrument modifies this requirement to exclude specific breaches of misleading or deceptive conduct provisions contained in section 1041H(1) of the Corps Act or section 12DA(1) of the ASIC Act.

Additionally, section 12DB(1) of the ASIC Act has provisions concerning false or misleading misrepresentations, which were deemed significant breaches of the core obligations. Similarly, these were automatically reportable.

Moving forward, a report will not need to be lodged with ASIC as long as the circumstances:

• Only impact one person or, if it relates to a financial product, credit product, consumer lease, mortgage or guarantee that is, or is proposed to be, held jointly by more than one person, those persons;
• Do not result in, and are unlikely to result in, any financial loss or damage to any persons; and
• Do not give rise, and are unlikely to give rise, to any other reportable situation.

Amending 2: Extended Period for Reporting

Previously, licensees had 30 days from first knowing that, or are reckless with respect to whether, there are reasonable grounds to believe that a reportable situation has occurred, to lodge a report with ASIC. However, from 20 October 2023, this period has extended to 90 days, giving licensees more time to lodge their report with ASIC.

 

How can Chamberlains help?

At Chamberlains Law Firm we can help you to understand the ASIC regulations and assist you to ensure your compliance with the regulations.

*This article was prepared with the assistance of Annabel Randall