ASIC takes a reasonable approach

ASIC announced last week that it will take a reasonable approach in the early stages of the regulatory reforms coming into effect in October 2021, provided industry participants are using their best efforts to comply.

SAFAA had written to the Chair of ASIC, Joe Longo, asking for such a reasonable approach in light of the significant change to business systems and processes that are required, that need to take effect at the same time industry is facing other challenges including those resulting from COVID-19 and renewed lockdowns.

The new reforms include reference checking, information sharing and breach reporting that come into effect on 1 October as well as the new Design and Distribution Obligations, anti-hawking provisions and internal dispute resolution that come into effect on 5 October.

SAFAA noted that firms are facing resource constraints and have limits to their capacity to expand their technology teams, both financial and human resource-related. The supply of experts in information technology has been impacted by border closures arising from COVID. Firms are competing with other entities across a range of industries and sectors for this talent, plus they are already also implementing system changes to accommodate CHESS replacement.

In its media release, ASIC recognised that there will be a period of transition as industry finalises implementation of additional compliance measures and that it would take into account the context in which firms are operating.

The ASIC Chair stated, ‘ASIC’s initial approach extends to technical or inadvertent breaches, where firms have systems changes underway and act quickly to address problems as they arise. However, where firms are not acting in good faith or where we detect conduct causing actual harm, we will not hesitate to enforce the law’.

SAFAA has welcomed ASIC’s approach to the new laws.