Firstmac pays A$8m for DDO failings
Firstmac Limited has been ordered by the Federal Court to pay A$8m ($5.03m) for failing to meet its design and distribution obligations (DDO).
The company was earlier in July 2024 found breaching DDO by not taking reasonable steps to make sure that one of its investment products was consistent with its target market determination.
“Today’s judgment should act as a deterrent to anyone engaged in cross-selling financial products who fails to consider their design and distribution obligations before sending product disclosure statements.”
ASIC Chair Joe Longo
This is ASIC’s first civil penalty action against a distributor involving DDO breaches. It was also ordered to pay ASIC’s costs for the proceeding.
Adviser David Eduardo Cubilla permanently banned – January 24, 2025
The Calamvale-based financial adviser David Eduardo Cubilla has been permanently banned after being convicted of fraud relating to stealing funds from a client’s superannuation account.
ASIC made two orders against Cubilla, who is now permanently banned from providing or performing in, or controlling any financial services as well as within credit activities.
ASIC news weeks 1-4
New CEO
On January 16, Scott Gregson was appointed as the new Chief Executive Officer at ASIC, and will join the Commission after a nearly 30-year career with the Australian Competition and Consumer Commission (ACCC).
Gregson will start on March 17, 2025, taking over from ASIC’s retiring interim CEO Greg Yanco.
“Scott is an impressive leader and will bring extensive experience to this important role at ASIC,” said ASIC Chair Joe Longo. Longo also added that Gregson stood out in an executive search of domestic and international candidates.
New laws for buy-now-pay-later providers
The National Credit Code has been extended to buy-now-pay-later (BNPL) contracts. BNPL products will be subject to stronger regulation with new laws.
Starting June 10, 2025, providers of BNPL contracts will need to have a credit licence to be authorized to engage in credit activities, subject to transitional arrangements. Those providers who do not have a credit licence must therefore:
- apply for a credit licence;
- have ASIC accept the application for lodgement; and
- become a member of the Australian Financial Complaints Authority.
Those who have a credit licence but not authority to engage in credit activities as a credit provider must apply for a variation.
Instrument consultation
ASIC is seeking feedback on the relief on Instrument 2022/805 – ASIC Corporations (Business Introduction Services), which is due to expire on April 1, and if it should:
- be extended in relation to managed investment scheme; and/or
- reinstate the previous relief from Chapter 6D of the Corporations Act 2001 in relation to securities, other than debentures.
Feedback can be submitted until February 5.
Proposed remake of employee incentive scheme instruments
ASIC is proposing to remake two employee incentive scheme class orders that are due to expire on April 1. It proposes to make them into one legislative instrument, and to remake the exemptions five years.
The orders are:
- [CO 14/1000] Employee incentive schemes: Listed bodies; and
- [CO 14/1001] Employee incentive schemes: Unlisted bodies.
Feedback can be submitted until February 22.
Proposal to remake relief for offers of CHESS Depository Interests
ASIC proposing to remake Class Order [CO 14/827] Offers of CHESS Depository Interests, which is due to expire on April 1, for five more years.
The Commission has also suggested minor changes to improve clarity of the Order with the remake, and feedback can be submitted until February 28.
Superannuation CEO Roundtables
ASIC and APRA hosted two joint Superannuation CEO Roundtables on November 25, 2024, and December 5, 2024, where CEOs discussed key issues connected to climate risk.
During the discussions, the CEOs highlighted the challenges of different reporting standards across jurisdictions and industries, and emphasized a need for consistent climate risk disclosure and reporting, including standardized metrics, methods and scenarios.
They also voiced concern about the complexity and cost of mandatory reporting, as well as recognizing the benefits of voluntary disclosure. The participants also stressed the importance of clear and practical regulatory guidance, and how industry bodies can support trustees.
Other topics discussed included the challenges of integrating nature risk with climate risk, and the importance of consistent and accurate disclosures, and the gravity of communicating these things with members.
New Moneysmart financial goals in 2025 research
More than half of Australians plan to set a financial goal for 2025, but only 12% manage to stick to it, new research from ASIC’s Moneysmart shows.
Most likely to plan to set financial resolutions or goals are Gen Z (77%), Millennials (60%) second, then Gen X (51%), and Baby Boomers (35%).
A majority anticipate challenges with their goals (85%), where the most common factor is financial constraints (56%). Other challenging factors include lack of motivation, knowledge, and time.
“One of the ways you can stick to your financial goals in 2025 is to take stock of your spending for the past year. Understanding where your money is going is a good first step,” said ASIC Commissioner Alan Kirkland.
Dr Angel Zhong, RMIT University Professor of Finance, advocates reflecting on the last year’s financial journey to identify what worked and what did not.
“Grasping your financial situation is the initial step towards making positive changes. Whether you’re building an emergency fund, paying off debt, or starting an investment portfolio, it’s crucial to set goals that match your unique financial circumstances.”
Key issues outlook 2025
Within the regulatory remit in 2025, ASIC has identified the most significant current, ongoing and emerging issues, which include, without order:
- changing dynamics between public and private markets;
- superannuation members being let down by their fund and trustee, including unsuitable advice;
- consumer losses from fraud and scams, driven by increasing sophistication and technology;
- cyber-attacks, data breaches, and internal system failures undermining market confidence and causing financial loss;
- poor household outcomes after natural disasters due to deficient claims by general insurers;
- impact of ASX’s CHESS replacement on Australian markets;
- Poor quality climate-related financial disclosures leading to misinformed investment decisions;
- Poor audit quality resulting in declining market confidence and misinformed investment decisions; and
- Banks and lenders exacerbating consumer financial hardship.
