ASIC has previously stated it would temporarily change its regulatory work and priorities to allow it and regulated entities to focus on the impact of COVID-19. This will include the deferral of some activities and redeployment of staff to address issues of immediate concern, including maintaining the integrity of markets and protecting vulnerable consumers.
ASIC can now provide details on many of the activities that will be affected (see Details of ASIC’s regulatory work and priorities in response to COVID-19). We will provide further advice on changes to ASIC work implementing the recommendations of the Financial Services Royal Commission in light of changes to the Parliamentary timetable and any future Government decisions on those measures.
ASIC is committed to working constructively and pragmatically with the firms we regulate, mindful that they may encounter difficulties in undertaking their regulatory work due to the impact of COVID-19.
ASIC has delayed a number of activities not immediately necessary in light of these significantly changed circumstances, including consultations, regulatory reports and reviews.
Onsite supervisory work, such as the enhanced approach of ASIC’s Close and Continuous Monitoring Program, is now not possible. However, ASIC will continue to monitor firms remotely, including through close working and information sharing arrangements with APRA. We will also continue to draw on established working arrangements with senior executives to both supervise and support firms.
In response to COVID-19 ASIC:
- has stepped up its markets supervision work to support the fair and orderly operation of markets, ensure investors are appropriately informed, and protect against manipulation and abuse;
- will heighten its support for consumers who may be vulnerable to scams and sharp practices, receive poor advice, or need assistance in finding information and support should they fall into hardship; and
- will identify other actions needed to support firms such as facilitating the timely completion of capital raisings and other urgent transactions, providing regulatory relief, where appropriate, and identifying measures to support small business.
Enforcement action will continue. However, it is recognised that there may be some changes to the timing and process of investigations to take into account the impact of COVID-19. There will also be changes due to, among other things, constraints created by variations to usual court procedures.
Key functions will remain available to those who rely on them, including registry operations and services, receipt of whistleblower, breach and misconduct reports, and general contact points for industry.
ASIC Chair James Shipton said, “ASIC recognises that participants in the Australian financial services sector are under enormous strain due to the effects of COVID-19. We also acknowledge that they are taking special measures to support their customers who are adversely affected. We expect them to continue to act fairly and in the best interest of consumers in these extraordinary times.
“To assist firms, ASIC will limit the regulatory activity that they will need to respond to as much as possible. We are also working with the financial industry to identify other areas where we can provide support.
“However, it is important to note that this is not an abrogation of our regulatory work, but a recognition that some existing activities and new tasks must take precedence over work we would otherwise be doing.
“In fact, COVID-19 has increased the workload of our organisation as there is a heightened risk of significant consumer harm, the possibility of serious breaches of the financial services laws, and challenges in ensuring market integrity and the continued funding of companies and the economy.
“ASIC is being especially vigilant in addressing predatory practices, scams and fraud,” Mr Shipton said.
Despite the challenges posed by COVID-19, ASIC expects entities to treat customers fairly, avoid adding further financial harm or burden to consumers, and act to maintain the integrity and efficiency of markets.
In addition, financial services and credit licensees and participants in financial services markets continue to have legal obligations including, where applicable, to:
- act fairly, honestly and efficiently;
- report material breaches of the law;
- maintain records of the financial services they provide; and
- ensure appropriate supervision of the provision of financial services and credit activities, even where staff are working remotely.
ASIC is committed to working with the regulated population, and representatives of industry and consumers to maintain the proper functioning of markets and financial systems in the best interests of consumers and the Australian economy.
ASIC will provide feedback on specific issues to affected stakeholders and will provide further general updates and sector specific information, including FAQs, on our COVID-19 information page.