The Australian Securities and Investments Commission (ASIC) has nominated crypto-assets and the design and distribution obligations (DDO) for fund managers as two compliance priorities over the coming four-year period.
The ASIC Corporate Plan 2023-27 has stated it will continue to take action to protect Australian investors from the risks inherent with crypto-assets.
To this end, the regulator identified six distinct areas of action on which it will focus, including consulting with Treasury to develop a framework to protect consumers and scrutinising target market determinations and product disclosure statements with regard to retail clients.
Further, ASIC said it will “taking enforcement action to protect consumers from harms associated with crypto-assets, including those that mimic traditional products but seek to circumvent regulation, and offerings within our jurisdiction that involve misleading promotion of high-risk investments or inadequate risk disclosures”.
In addition, it has committed to monitoring exchange-traded products where crypto-assets are involved and raising public awareness about these types of investments, including decentralised finance, and working with industry peers both domestically and globally in this area.
The ASIC document also declared its commitment to continue surveillance of poor design and distribution of financial products.
“We will monitor compliance with all requirements, increasing our surveillance focus on the ‘reasonable steps’ obligations. We will also apply a design and distribution obligations lens when responding to poor consumer outcomes that we identify,” it noted.
In particular, it stipulated issuers of over-the-counter derivatives and insurance product providers will be subjects of its surveillance actions.
It foreshadowed the type of action it would take when DDO issues were detected as well.
“Our action will include taking disruptive and enforcement action, including by issuing stop orders, to address poor design and distribution of products, including in relation to investment, insurance, superannuation, credit and other financial products,” it said.