Subject to any new matters arising out of the Financial Services Royal Commission Interim Report, ASIC’s Report 585 ASIC enforcement outcomes: January to June 2018 sets out ASIC’s focus for the next 6 months in key areas.

Financial services and advice industry
Over the next six months, ASIC will continue to focus on enforcing higher standards in the financial services and advice industry, paying particular attention to:

• responsible lending practices requiring credit licensees to make reasonable inquiries about a customer’s financial situation, including verifying customer information in the assessment of suitability for a loan;

• the responsibility of AFS licensees to monitor and supervise the advice of their financial advice representatives to ensure that the services covered by the licence are provided efficiently, honestly and fairly;

• the obligation of financial services firms to ensure that clients are provided services for which they are charged; and

• the scope of the conflicted remuneration obligations on financial licensees and authorised representatives when they are providing financial advice.

Corporate governance
ASIC will continue to focus on the conduct of gatekeepers—company directors and officers, auditors, insolvency practitioners and business advisers—to ensure that they meet the standards of conduct required by law.

Over the next six months, it will have a particular focus on:

• companies with poor corporate governance;

• undisclosed associations and substantial holdings in shares in public companies (including beneficial ownership tracing and corporate fraud);

• related party transactions involving public companies;

• poor financial reporting by listed companies and other public interest entities;

• the quality of audits of listed companies and other public interest entities;

• insolvency practitioners and others who facilitate serious illegal phoenix activity and improper transactions in the face of insolvency;

• debenture issuers and other companies exposed to risk as a result of a declining property market; and

• company directors and officers who fail to stop their companies from making illegal payments to officials of overseas governments.

Market integrity

ASIC says it is committed to addressing market abuse (e.g. insider trading and market manipulation) and failures to meet disclosure obligations through enforcement action. Over the next six months, it will continue to focus on conduct risk.

It will also pay particular attention to:

• poor conduct in fixed income, commodities and currency (FICC) markets;

• misconduct in relation to initial coin offerings and cryptocurrency markets;

• serious and organised market misconduct with a focus on cross-border transactions;

• technology-enabled offending, including cyber-related market misconduct; and

• financial benchmark integrity—by making sure the banks adhere to court enforceable undertakings to ensure the adequacy and robustness of the systems and controls in their bank bill trading and foreign exchange businesses.

Small business

ASIC will continue to focus on small business issues that affect the regulatory environment and support compliance programs that inform credit providers of obligations to lodge documents.

It will have a particular focus on:

• unfair contract terms in small business contracts;

• credit lenders who do not lodge annual compliance certificates in accordance with the National Credit Act; and

• illegal phoenix activity—addressing this activity and minimising its effects on companies suffering financial distress.