The window for advice licensees to provide feedback to the Australian Securities and Investments Commission (ASIC) about its plans to provide relief around breach reporting will close in one week.
The corporate regulator in mid-February announced it was seeking feedback on a proposal to provide additional relief under the reportable situations regime, which requires Australian financial services licensees to submit notifications to ASIC about any breach of the misleading and deceptive conduct (MDC) provisions and certain contraventions of civil penalty provisions (CPP).
ASIC noted breaches of these provisions were considered significant contraventions of core obligations under section 912D(4)(b) and (c) of the Corporations Act that had led to some licensees providing reports to the regulator that had no intelligence value.
In an effort to prevent this, ASIC proposed limited relief from the automatic reporting of certain MDC and CPP breaches when a breach had been rectified within 30 days from when it first occurred, including paying any necessary remediation, the number of impacted consumers did not exceed five and the total financial loss or damage from the breach was not over $500.
“Our proposal seeks to strike a balance between reducing the reporting burden on licensees, while upholding the objectives of the reportable situations regime,” it stated.
“The requirement that the breach is rectified (including any necessary remediation) within 30 days from when it first occurred encourages licensees to have good internal systems that quickly detect and rectify problems.
“Breaches covered by the criteria of our proposal may still be reportable under other circumstances in section 912D of the Corporations Act and section 50A of the National Credit Act,” it added, noting multiple breaches of the same or similar nature would have to be reported.
“This means that licensees should record these breaches in a breach register to ensure that they comply with their obligation to report all reportable situations.”
Licensees have until 11 March to respond to ASIC’s proposals, with the SMSF Association flagging it was a matter of interest for its members.
