ASIC Introduced 2023 Enforcement Actions

On Thursday, ASIC deputy chair Sarah Court stated that the regulator's goals in 2023 will include enforcement action on greenwashing and a continuous focus on countering and disrupting investment schemes in her remarks at the ASIC Annual Forum in Sydney.

According to Court, this is the first time ASIC has specified enforcement focus areas, and they will do the same annually. These priorities are to protect consumers from financial loss and maintain the integrity of Australia's financial markets.

Enforcement actions against poorly designed financial products, deceptive behaviour related to sustainable finance, including greenwashing, misconduct involving high-risk products like crypto assets, combating and dismantling investment scams, protecting financially vulnerable consumers, misleading and deceptive behaviour relating to investment products, misconduct in the superannuation sector, and spreading false information through social media are some of the newest priorities for the organization in 2023.

Regarding the subject of greenwashing, ASIC has already started taking legal action against businesses that exaggerate how ethical, sustainable, or environmentally friendly financial products or investment strategies are.

ASIC stated that it has made protecting Australians from investment scams and high-risk investment products like crypto a priority after receiving more than 2,200 reports of misconduct involving crypto-assets and crypto scams in the two years leading up to June. In addition, ASIC's research also shows an alarming result of 40% of Australians owning two or more credit products that could be products of exploitative lending practices. Moreover, ASIC has observed an upsurge in the failure of property investment programmes throughout 2022. ASIC has identified possible violations of directors' obligations and director misconduct when collaborating with liquidators. ASIC will prioritise enforcement action pertaining to the management of these property schemes and will work to hold people accountable for their involvement.

Simultaneously, ASIC will also focus on loopholes in the general insurance market to honour promises to customers and address unfair contract terms. The regulatory body is also imposing strict legal action in the areas of weak governance in the superannuation aspect.

Failings in governance and director duties, poor pricing and distribution of financial products, false information about investment products on social media, manipulation in the energy and commodities derivatives markets, and governance failures will all be on the regulator's radar in the upcoming new year.