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In brief

ASIC Corporations and Credit (Amendment) Instrument 2023/589 (“Instrument“) was registered on 17 October 2023 to amend ASIC Corporations and Credit (Breach Reporting – Reportable Situations) Instrument 2021/716. The amendments modify the current reportable situations regime applicable to Australian financial services (AFS) licensees and Australian credit licensees and apply from 20 October 2023.


Contents

  1. Breaches of misleading and deceptive conduct provisions
  2. Reporting periods for previously reported situations
  3. Next steps

Breaches of misleading and deceptive conduct provisions

Following concerns about the costs of reporting some reportable situations that have limited regulatory benefit, the Instrument exempts licensees from reporting breaches of the misleading and deceptive conduct provisions (i.e., misleading and deceptive conduct or false and misleading representations in section 1041H of the Corporations Act 2001 (Cth) and sections 12DA and 12DB of the Australian Securities and Investment Commissions Act 2001 (Cth)) that:

  • Give rise to a single reportable situation
  • Impacts only one client or, if the product is jointly held, only impacts those clients
  • Causes no financial loss or damage, or likely financial loss or damage
  • Is not otherwise a reportable situation

Prior to the Instrument being registered, any breach of the misleading and deceptive conduct provisions was automatically reportable to ASIC regardless of whether the contravention was significant or insignificant.

Reporting periods for previously reported situations

Additionally, the Instrument gives licensees up to 90 days (instead of the previously required 30 days) to report a reportable situation that has underlying circumstances that are the same as, or substantially similar to, underlying circumstances of an earlier reportable situation that the licensee has reported to ASIC (i.e., a related reportable situation).

Next steps

These modifications are a sensible approach by ASIC and we suggest this is an opportune time for licensees to review and look to update their breach reporting policy accordingly.

Author

Bill Fuggle is a partner in the Sydney office of Baker McKenzie where he is a leading adviser in innovative listed investment products, fintech and neobanks, financial services regulatory advice, fund formation and capital markets.

Author

Trudi is a Partner in Baker McKenzie's Financial Services & Funds team in Brisbane.

Author

Alan is a special counsel in Baker McKenzie's Financial Services & Funds team in Sydney.

Author

Yechiel is a Special Counsel in the Melbourne office. His primary focus is in the regulation of financial services and consumer credit. He has more than 12 years' experience in advising a broad range of clients, ranging from established financial institutions to fintechs, both local and offshore.

Author

Thalia Dardamanis is a special counsel in Baker McKenzie's Funds Transaction Group. Practicing for 17 years, she specializes in superannuation and financial services law.
Prior to joining Baker McKenzie, Thalia was the head of legal advisory for UniSuper, one of Australia's largest superannuation funds and institutional investors with over AUD 110 billion in funds under management. There she led the team of lawyers who provided legal and regulatory advice across the fund's superannuation, administration and financial advice businesses. Before her role at UniSuper, she was a principal at a boutique Melbourne law firm specializing in superannuation and succession planning and, prior to that, worked in the superannuation practice groups at Maurice Blackburn and Hall & Wilcox.

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