Australian regulator to tighten scrutiny of super funds, sustainable finance
The Australian Securities and Investments Commission (ASIC) has detailed its enforcement priorities for the forthcoming year, with a particular scrutiny on the superannuation, insurance and sustainable finance industries.
ASIC
ASIC's Chairman, Joseph Longo, and Deputy Chair, Sarah Court, provided insight into these matters during their speeches at the ASIC Annual Forum in Melbourne. They communicated a broadened enforcement focus, aiming to meet industry and consumer demand for more transparency.
"Ultimately, regulation and enforcement are about making choices and setting priorities. Resources must be deployed carefully and to maximum effect. Decisions about what action to take are made by focusing on economic conditions, emerging threats and harms, and their impact on Australian consumers and businesses, as well as the operation of our financial and capital markets." said Longo.
Some of the new areas of focus for 2024 include member services failures in the superannuation industry, misconduct relating to the erosion of superannuation balances, as well as insurance claims handling.
GREATER ACCOUNTABILITY
ASIC has made an even stronger commitment to tackling misconduct in the superannuation sector, as previously announced on their site on November 15.
"This year we have taken proceedings against Australian Super, Mercer Australia, Active Super, and Telstra Super," said Court.
Court focused specifically on the Australian Super case, stating, "our action alleges failures across nearly 10 years to identify members with multiple accounts and to consolidate them where such a merger would serve the members' best interests."
ASIC
Addressing ASIC's pursuit of the insurance sector, Court pointed to the high-profile case against IAG.
"The court imposed the largest-ever penalty on an insurer earlier this year, levying $40 million against IAG," she said.
"In 2024, ASIC will enhance its focus on insurance claims handling, concentrating on delays, poor communication and record keeping, and inappropriate use of exclusions."
Longo also highlighted the importance of sustainable finance, drawing attention to the regulator’s focus on governance and directors’ duty failures as an enduring priority, alongside the battle against greenwashing.
"Sustainable finance is a transformational issue for global markets. It's driving significant changes to financial reporting and disclosure standards,” he said.
PRIORITISING MARKET INTEGRITY
Despite the upcoming priorities concentrating on consumer and retail investor issues, Court and Longo emphasised that this does not imply a reduction in the regulator's commitment to market integrity, including technological and operational resilience for market operators and participants.
"We are determined to be a regulator that does what it says. We have done that this year. We will do that next year," said Court, underscoring ASIC's commitment to transparency and accountability.
Longo echoed this commitment describing effective regulation and strong enforcement as being fundamental to navigating disruption.
“To remain effective, regulators must be open to change. Our regulatory approach and the tools we use must continue to evolve and adapt to respond to new risks and new opportunities," he said.