ASIC has announced a doubling in breach of licence notifications by the financial services industry: in the first nine months of this financial year, ASIC received 690 breach notifications, or between 28 and 50 a fortnight, which is twice the number received before the October 2004 publication of ASIC’s guide to reporting breaches.
Australian financial services licensees are required to report any significant breaches, or likely breaches to ASIC, within five business days of becoming aware of the breach.
Since 1 July 2005, ASIC has received 690 notifications including:
- 258 breach notifications from the general insurance and superannuation sectors
- 35 breach notifications from deposit taking institutions
- 33 breach notifications from life insurers
- 37 breach notifications from stockbrokers.
The most common types of notifications were breaches involving disclosure obligations, financial viability, incorrect fees and charges, statements of advice and unit pricing.
Of the breach notifications received since 1 July 2005:
- licensees ultimately addressed the causes and consequences of the breach in a manner acceptable to ASIC in 431 cases
- ASIC continues to monitor licensees’ progress in properly addressing the causes and consequences of the breach in a further 63 cases
- six licenses have been varied
- 30 licensees remain under surveillance
- formal investigations are underway in the case of 25 breaches.
Since December 2003, ASIC has received more than 1600 breach notifications from licensees.
