Australia: Regulatory update – 24 October 2022

By Jim Bulling and Hugo Chow

ASIC’s crackdown on product disclosures continues

To date, ASIC has issued 11 design and distribution obligations stop orders, with the first stop orders being issued in July this year.

The latest interim stop order prevent a fund management firm (the Firm) from offering or distributing three funds (the Funds) to retail investors due to the Firm not having compliant target market determinations (TMDs).

The Funds in this instance invest in crypto assets which ASIC said are highly volatile, complex, very risky and speculative. Although the Firm disclosed that there was a risk that the assets in the Funds could face a loss in total value, ASIC is concerned that the Firm has not appropriately considered the features and risks of the Funds in determining their target markets. ASIC considers that the Funds are not suited to the wide target market that is defined in the TMDs, which includes investors with medium to high risk and return profiles, and investors intending to use the Funds as either a small component or all of their investment portfolio.

The Government launches DIN campaign

The Government is launching an awareness campaign to remind company directors to apply for their director identification number (DIN) by the 30 November 2022 deadline.

All directors of companies, registered Australian bodies, registered foreign companies under the Corporations Act 2001, or Aboriginal and Torres Strait Islander corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 must have a DIN.

If you have any further questions regarding the DIN application process, please contact us.

Size matters in superannuation, says outgoing APRA chair

In Wayne Byres’ final speech as APRA chair, he noted that superannuation is an “industry where size matters”.

The outgoing APRA chair said that “the evidence is clear that size helps deliver better member outcomes” and that trustees “that cannot compete on that basis need to think very hard about how (and whether) they can deliver in their members’ best financial interests, now and into the future”.

This will further increase pressure for merger discussions amongst superannuation funds.