ASIC reveals breach reporting data
There were almost 900 reports made to the Australian Securities and Investments Commission (ASIC) regarding financial advice activities between 1 October and 30 June, 2022.
In the regulator’s first publication of breach report data, it said it received over 8,000 breach reports.
When broken down by activity, some 878 of these related to advice and 259 were reports which related to financial advice activity that affected multiple consumers.
The top activity was credit which received over 3,000 reports followed by general insurance and deposit taking.
The regulator said the number of breaches reported was significantly smaller than had been expected, leaving it to question whether licensees had the right systems and processes to do so.
Only 6% of the licensee population lodged a report during the first nine months of the regime and 74% of all reports came from the same licensee.
In 18% of the reports received, it took the licensee more than one year to identify and commence an investigation into an issue after it had first occurred.
The total customer financial loss identified to date across the reports received was approximately $368.5 million. Licensees indicated that they did not intend to compensate impacted customers in 4% of reports that had identified customer financial loss.
ASIC commissioner, Sean Hughes, said: “This publication includes significant insights about the implementation of the reportable situations regime. The data ASIC has been receiving under this regime demonstrates how industry is monitoring and responding to non-compliance. It also highlights where compliance with the regime itself requires greater regulatory attention.’
‘As part of its 2022-23 priorities, ASIC is focusing on improving the operation of the reportable situations regime. We will continue to work with stakeholders to address issues that have arisen from implementation of the regime, including by providing additional guidance where needed. Greater alignment of reporting practices by licensees will facilitate the publication of more comparative data at the licensee level in coming years.”
AUTHOR
Laura Dew
Recommended for you
Further details on the government’s next package of advice reforms have been announced.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
I read the report and while it provides high level data it doesn't really give much guidance at a practice level.
How about you put out a paper with the top 20 basic things that caused a breach in layman's terms in a financial practice.
Teach us to improve , don't baffle us with numbers.
It is actually hilarious that the response for low breach report numbers is "well obviously they are not any good at reporting" why not "there are not many breaches to report".