ASIC'S 2022-23 annual report: key takeaways

On 13 October 2023, ASIC released its Annual Report for 2022-23 which set out key outcomes across the regulator's enforcement, compliance, regulatory and supervisory functions. We outline our key takeaways.

ASIC's enforcement activity delivers on strategic priorities

During 2022-23, ASIC completed:

• 52 civil actions which resulted in the imposition of over $185 million in civil penalties. These actions covered issues including fees for no service breaches, systemic compliance failures, continuous disclosure contraventions, false and misleading advertising, misleading sale of insurance, financial hardship misconduct, superannuation advice breaches, and failure to comply with the best interests duty; and
• 44 criminal actions which resulted in 35 convictions, including 21 custodial sentences.

During 2022-23, ASIC commenced:

• 62 new civil actions (down from 75 in the previous year); and
• 32 new criminal actions (down from 52 in the previous year).

ASIC's enforcement work covered matters relating to sustainable finance (greenwashing), product design and distribution, directors' duties and disclosure obligations, misleading or deceptive conduct, and insider trading.

Reduced use of information-gathering powers

ASIC's use of significant compulsory information-gathering powers has decreased notably.

In 2022-23, ASIC issued:

• 793 notices to appear for examination under section 19 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) (down from 895 in the previous year);
• 1,544 notices to produce under section 33 of the ASIC Act (down from 1,930 in the previous year) and
• nine notices to produce books under section 266 of the National Consumer Credit Protection Act 2009 (Cth) (down from 70 in the previous year).

Ongoing implementation of the reportable situations regime

ASIC worked with industry throughout 2022-23 to support the implementation of the new breach reporting regime that commenced on 1 October 2021. The regulator has done so by:

• releasing its first publication of information lodged under the new regime on 27 October 2022;
• on 27 April 2023, releasing updates to Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees to support the use of the breach reporting data and reduce the burden on industry; and
• developing an application programming interface for submissions systems to increase efficiencies.

Joint administration of the Financial Accountability Regime (FAR)

ASIC has signalled that it is working with APRA to prepare for the implementation of FAR, which received royal assent on 14 September 2023.

This work has included delivering a comprehensive information package designed to support entities in preparing for compliance with the new regime. ASIC and APRA are also working to ensure alignment on supervisory and enforcement approaches following the regime taking effect in the banking sector in March 2024 and the superannuation and insurance sectors in March 2025.

ASIC's new structure

ASIC has implemented a new structure, following an organisational review in late 2022, designed to improve the timeliness of decision making, strengthen collaboration and enable a "whole-of-ASIC" approach to delivering on strategic priorities, and improve operational flexibility. Notably, ASIC has consolidated its Financial Services Enforcement and Markets Enforcement divisions into a singular Enforcement and Compliance function.

In the lead‑up to the new structure coming into effect on 3 July 2023, ASIC prioritised finalising existing activities to enable a smooth transition, which may partly explain the variances in its investigatory and enforcement activities and outputs identified above.