ASIC, financial advice

Licensee breach reporting guide revised

AFS licensees

The regulatory guide governing the reporting of Australian financial services licensee and credit licensee breaches has been updated by ASIC.

The Australian Securities and Investments Commission (ASIC) has updated Regulatory Guide (RG) 78, which provides guidance for Australian financial services (AFS) licensees and credit licensees on reporting breaches of their legal obligations.

The refreshed version of RG 78 “Breach reporting by AFS licensees and credit licensees” has addressed certain key areas, including clarifying the situations where licensees can group multiple reportable situations into a single report to the regulator, specifying the information licensees need to include when describing a reportable situation and communicating ASIC’s expectations when licensees are providing an update to a breach that has previously been reported.

The regulator made the move in response to industry and stakeholder feedback calling for a clarification of the breach reporting obligations for licensees. This included collating responses from a variety of industry bodies representing a wide variety of sectors, including banking, insurance, superannuation, financial advice, markets and credit.

“Our focus is to improve consistency and quality of reporting practices by licensees and reduce regulatory burden where we can. The improved guidance will support industry to meet their obligations and support the regime to meet its policy objectives for ASIC, industry and consumers,” ASIC acting financial services and wealth executive director Suneeta Sidhu said.

“We acknowledged early on that there were some implementation challenges with the regime. Our updated guidance has been developed following consultation with industry on practical solutions to some of these challenges.”

In addition to the RG 78 changes, ASIC is making minor amendments to the prescribed form licensees must lodge when managing reportable situations. These changes will clarify how some questions should be answered and point licensees to the revamped RG 78 guidance. They will come into effect from 5 May.

Further, the regulator confirmed it is aware of other issues raised about the reportable situations regime as a result of the industry consultation process and stated it is continuing to work on these matters.

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