ASIC’s response to COVID-19
Ironically, COVID-19 may provide breathing space for an industry assailed with frequent and unceasing change.
The Council of Financial Regulators (the main coordinating body for Australia’s financial regulators*) has been meeting frequently to discuss COVID-19 and the challenge it poses to the Australian economy and, as we’ve previously mentioned, expressed reservations about the capacity for financial services businesses to respond to and absorb further regulatory change.
In the current environment, there are concerns that without some respite, businesses are unlikely to recover from depressed economic conditions compounded by fear, uncertainty and apprehension of future change.
Recalibration and refocus
In a recent media release, ASIC confirmed that it had recalibrated its regulatory priorities.
What this means in practice is that, until 30 September 2020, ASIC will suspend a range of current and ongoing activities to focus their resources on matters that involve a risk of significant consumer harm, serious breaches of the law or risks to market integrity and time-critical matters.
To be clear, ASIC have announced that they have suspended:
- Regulatory reports;
- Reviews; and
- On-site supervisory work such as the Close and Continuous Monitoring Program.
Despite this recalibration, ASIC will continue to:
- work with financial institutions to further accelerate the payment of outstanding remediation to customers; and
- maintain its enforcement activities and continue to investigate and take action where the public interest warrants it. However, ASIC will focus on activities necessary to prevent immediate consumer harm, egregious illegal conduct and other time critical matters.
Key BAU functions including registry operations and services, receipt of whistle-blower, breach and misconduct reports and general contact will be maintained
The fine print
Interestingly, unlike ASIC, The Treasury has not committed to a suspension of its consultations. Nor has it declared a commitment to recalibration and refocus.
In this respect, it’s dangerous to assume that the Government’s 2019 Implementation Roadmap will be either paused or revised. Accordingly, it may be prudent to review and respond to Treasury’s Consultation Papers and not presume their regulatory reform agenda will be deferred.
* The Council of Financial Regulators, made up of ASIC, the RBA, APRA and The Treasury, is focused on promoting stability in the Australian financial system and supporting effective and efficient regulation.