Fentoz Ltd pays fine over two infringement notices for greenwashing – June 25, 2024
The company, an ASX listed entity specialising in fertilizer mining, manufacturing and supply, has paid a A$37,560 ($24,924) fine to comply with two infringement notices issued by ASIC. The notices allege Fentoz made false or misleading statements about its reforestation project in the Philippines.
ASIc alleges the company claimed it would receive funding by the end of 2023, and would begin planting in Q4, 2023. In fact, Fentoz had ended discussions with two prospective partners earlier in the year, not signed any letter of intent, nor secured any funding.
ASIC Deputy Chair Sarah Court said: “This case is another example of ASIC enforcement action where we consider there to be inaccurate or misleading statements made in sustainability-related claims. Greenwashing continues to be in our sights and remains an enforcement priority.”
Reminder about new experienced provider pathway notifications – June 26, 2024
From July 1, 2024, all AFS licensees must lodge a notice with ASIC when they receive a written declaration from a financial adviser who is eligible to access the experienced provider pathway. This must be done within 30 business days. For written declarations received before July 1, 2024, licensees have 30 days from the day of receipt to submit notification.
Market intermediaries told to boost supervision of business communications – June 26, 2024
In Information Sheet 283, ASIC has called on market intermediaries to strengthen supervision of recording and monitoring their representatives’ business communications. The call reflects ASIC’s concerns that use of unmonitored comms channels and encrypted comms apps “significantly increases” the risk of misconduct going undetected.
Practical guidance about managing risks and embedding supervisory arrangements is set out in the sheet. ASIC Commissioner Simone Constant said: “Bankers, dealers and market participants have important roles as gatekeepers to Australia’s financial markets and stewards of market integrity. We expect them to maintain strong and effective supervisory arrangements to manage the risk of harm to clients and to market integrity.
“Rapidly evolving technologies, use of personal devices and wider adoption of remote or hybrid working arrangements present challenges for monitoring and recordkeeping for licensees. We expect market intermediaries to periodically review their arrangements for supervision of business communications so they are working effectively.”
United Global Capital and Global Capital Property Fund assets frozen – June 26, 2024
The regulator has obtained interim orders from the Australian Federal Court to freeze the assets of United Global Capital (UGC) and Global Capital Property Fund (GCPF) in order to protect investor funds while an investigation is ongoing.
Justice O’Callaghan ordered that UGC and GCPF be restrained from removing, selling, charging, mortgaging, dealing with or disposing of property; incurring new liabilities, or withdrawing, transferring, disposing of or dealing with money held in bank accounts or with a financial institution.
New banking code of practice approved – June 27, 2024
ASIC has given the go-ahead to a new version of the Australian Banking Association’s (ABA) Banking Code of Practice, which will come into force on February 28, 2025. The follows an extensive period of consultation, led by the regulator.
The new code is intended to address critical gaps identified by stakeholders, and, among other things, it;
- expands the definition of a small business to bring another 10,000 businesses into eligibility;
- improves customer inclusivity and accessibility;
- broadens the definition of financial difficulty, and
- enhances protection for loan guarantors.
ASIC Chair Joe Longo said: “Banks have a significant impact on our lives and Australians and ASIC rightly have high expectations of them. ASIC’s review has been focused on ensuring this Code can make a difference in the day-to-day practice of the banking sector and through that, good customer outcomes.’
Independent party appointed to verify Shield payments – June 27, 2024
Jason Tracy and Lucica Palaghia of Deloitte have been appointed by the Federal Court to take full control of the bank accounts of Shield Master Fund after Keystone Asset Management was blocked from dealing with Shield’s assets. Investigations into the operations of Shield and potential risks to investors are ongoing.
Payday lender ordered to pay A$16m
Ferratum Australia Pty Ltd, which is in liquidation, has been told it must pay a total of $16m ($10.65m) in penalties by the Federal Court for numerous contraventions of the National Consumer Protection Act and the National Credit Code.
ASIC Deputy Chair Sarah Court said: “Ferratum’s conduct was egregious. It offered short term loans to often vulnerable customers, significantly compounding their hardship by charging fees that it was not legally entitled to charge.”
Cancelled or suspended AFS licenses
Dr Robert Payne of Guildfords Funds Management – June 28, 2024
Managing director of the Guildford group of companies, Dr Robert Payne of Brighton, Victoria, has been banned from providing financial services, performing any function involved in the carrying on of a financial services business and controlling an entity that carries on a financial services business for four years.
The licence of Guildfords Funds Management Pty Ltd has also been cancelled. Payne was found to have “lacked the competence and diligence required of a Responsible Manager” and to have failed to understand the extent of Guildfords’ failure to comply with its licence duties.
Airrails AFS – June 28, 2024
The licence of Airrails Pty Ltd has been suspended for three months after Airrails failed to lodge its annual financial statement, auditor’s report and audit opinion.
ASIC news week 26
Speeches
ASIC Chair Joe Longo spoke at the Australian Banking Association Conference about the new banking code of practice and the importance of putting customers at the centre of banking.
He said that: “Codes help to fill the space between the letter of the law and the mission and values statements of each company”, and have the potential to deliver real benefits to customers. He spent some time emphasizing the benefits of self regulation as a measure that could demonstrate genuine commitment, but said that having the new code approved by an industry-wide body such as ASIC was important in securing consumer confidence.
He drew attention to a number of areas that still needed to be improved.
- lenders not making it easy for the customer to give a hardship notice;
- assessment processes being too difficult for the customer to go through;
- a lack of effective communication with the customer;
- aulnerable customers not being well supported; and
- insufficient focus on the challenges facing customers.
He said this illustrated “why enhancing the definitions of vulnerability and financial difficulty in the new Code is very much a step in the right direction.”
ASIC Commissioner Alan Kirkland gave an opening statement on behalf of the regulator to the Australian Parliamentary Joint Committee on Corporations and Financial Services on 28 June. It addressed the Financial Services Regulatory Framework in Relation to Financial Abuse.
He pointed out that “there are no financial services laws explicitly directed towards how financial firms should treat consumers experiencing financial abuse”, and referenced ASIC’s recent financial hardship report and its Indigenous Outreach program as examples of its work on related issues.