The Australian Securities and Investments Commission (ASIC) has issued a consultation paper seeking stakeholder feedback on proposed updates to its draft guidance on reforming breach reporting.
Deputy Chair of ASIC, Karen Chester said the Commission’s draft regulatory guide, Breach reporting by AFS licensees and credit licensees, clarified and strengthened the existing obligation on Australian financial services (AFS) licensees to self-report certain breaches of the law and extended the obligation to credit licensees.
Ms Chester said the reforms, to commence on 1 October, followed the Financial Services Royal Commission and findings from the ASIC Enforcement Review Taskforce.
“We support the reform goals to promote consistent, timely and high-quality reports,” Ms Chester said.
“The Financial Services Royal Commission expressed concern about prolonged and repeated failures by large entities to make breach reports required by the law,” she said.
“Breach reporting is a core component of Australia’s financial services and credit regulatory framework.”
Ms Chester said the reforms would position ASIC to act decisively to disrupt misconduct and escalating harms, as well as identify patterns of non-compliance across industry.
She said ASIC expected a significant increase in the volume of reports it received as a wider range of entities would be required to report, and a wider range of breaches would be subject to reporting.
“Entities are not required to report every instance of non-compliance or trivial breaches, but a targeted set of ‘reportable situations’ defined under the law,” Ms Chester said.
ASIC is also seeking feedback on a draft information sheet, Complying with the notify, investigate and remediate obligations, on the new obligations set to apply to AFS licensees who acting as financial advisers and credit licensees acting as mortgage brokers.
ASIC’s 21-page paper Breach reporting and related obligations can be accessed at this PS News link.
