Australia: Easing compliance – ASIC’s proposed reporting measures for

ASIC is seeking feedback on their proposal to reduce the reporting burden on Australian financial services and credit licensees in particular circumstances

In brief

On 18 February 2025, ASIC commenced consultation on proposals to:

1. provide additional relief for Australian financial services and credit licensees from reporting certain breaches of the misleading and deceptive conduct (MDC) provisions and certain contraventions of civil penalty provisions (CPPs); and
2. consolidate this additional relief and the relief in ASIC Corporations and Credit (Breach Reporting — Reportable Situations) Instrument 2024/620 (ASIC Instrument 2024/620) into a single instrument.

The proposals, as further described in CS 16, aim to reduce the reporting burden on Australian financial services and credit licensees. ASIC’s rationale for the changes is, under the current reportable situations regime, some reports of MDC and CPP breaches have been of minimal intelligence value to ASIC.

CS 16 was issued on 18 February 2025 and consultation will close on 11 March 2025. The ASIC media release outlining the proposed reportable situations regime relief can be accessed here.

Contents

1. Background
2. In more detail
3. Next steps

Under the reportable situations regime, Australian financial services and credit licensees are required to submit notifications to ASIC about all breaches of MDC provisions or CPPs (subject to certain limited exceptions). Breaches of these provisions are deemed “significant” breaches of “core obligations” under section 912D(4)(b) and (c) of the Corporations Act 2001 (Cth) (“Corporations Act“) and section 50A(4)(b) and (d) of the National Consumer Credit Protection Act 2009 (Cth) (“National Credit Act“).

ASIC notes this automatic reporting requirement has led to reports which are of limited value to ASIC, but still involve a cost for licensees. In light of this situation, ASIC’s proposed relief seeks to strike a balance between reducing the reporting burden on licensees, and upholding the objectives of the reportable situations regime.

The proposed ASIC instrument establishes additional reporting relief for MDC and certain CPP contraventions of the core obligations under section 912D(4) of the Corporations Act 2001 (Corporations Act) and section 50A(4) of the National Consumer Credit Protection Act 2009 (National Credit Act) in the following circumstances:

• The breach has been rectified within 30 days from when it first occurred (and remediation has been paid if required); and
• The number of impacted consumers is less than five; and
• The total financial loss or damage to all impacted customers resulting from the breach does not exceed AUD 500 (including where the loss has been remediated); and
• The breach is not a contravention of clearing and settlement services rules or rules relating to reporting client monies.

Despite this proposed relief,…